Maxvalue Credits and Investments Unlisted Shares Annual Reports

Maxvalue Credits and Investments Unlisted Shares

Annual Report 2023-24 for Maxvalue Credits and Investments Ltd. **Corporate Information** Maxvalue Credits and Investments Limited, incorporated in 1995, is a non-banking financial company (NBFC) registered with the Reserve Bank of India. The registered office is located in Thrissur, Kerala. The board of directors includes Sri. Manoj VR (Managing Director), Sri. Christo George (Whole-Time Director), several non-executive and independent directors, including Sri. Kottarath Nandakumar, Sri. Parameswaran PN, Smt. Saraladevi M, Sri. Roy Johnson V, Sri. Prathapan KR, Sri. Gireesh K, and Sri. V K Gopinathan. Key managerial persons include Sri. Joy Thomas (CEO), Smt. Salini Narayanan K (CFO), and Sri. Akhil B Vijay (Company Secretary). The statutory auditors are M/s. VKS Narayan & Co. and the debenture trustee is Jokin A Pereira. Link Intime India Private Limited serves as the Registrar & Share Transfer Agents. **From the Managing Director's Desk** The company achieved a net profit of Rs. 10.41 crore for the fiscal year ending March 31, 2024, reversing previous losses. This was due to efficient management of resources, strategic realignment of business portfolios, and prompt repayment of obligations to lenders, with successful repayment of Rs. 372 crore to NCD holders and subordinate debt providers without any delays. Asset portfolios were effectively managed through rigorous credit risk assessments and efficient collection mechanisms, focusing on auto loans, gold loans, and micro-finance. Operating expenses were reduced by relocating to more cost-effective premises and merging unprofitable branches. The company commenced operations in Tamil Nadu and plans for further expansion. **Notice to Shareholders** The 29th Annual General Meeting will be held on September 10, 2024, via video conferencing to transact ordinary and special business. Ordinary business includes approving the audited financial statements for the year ending March 31, 2024, and appointing directors who retire by rotation. Special business includes the issuance of fully secured redeemable non-convertible debentures up to Rs. 150 crore on a private placement basis. The board is authorized to mortgage company assets and ratify the appointment of Mr. Manoj Vellamparambil Raman as Managing Director. There are also resolutions to appoint and ratify the appointments of Independent Directors, including Mr. Sadanandan Prasanna Kumar, Mr. Perinthalakkat Parameswaran Narayanan, and Mrs. Saraladevi Mecheriparambil. **Directors' Report** The financial summary for 2023-24 (with 2022-23 figures in parentheses) includes a total income of Rs. 136.73 crore (Rs. 154.91 crore) and a profit for the year of Rs. 10.41 crore (loss of Rs. 21.54 crore). No dividend has been recommended. The company offers auto loans, gold loans, traders' loans, and microfinance, and also provides investment opportunities via non-convertible debentures and subordinated debts. The company’s portfolio size decreased from Rs.562.26 crore on March 31, 2023, to Rs.437.95 crore on March 31, 2024. The company repaid Rs.19.40 Cr towards redemption of matured NCDs and Rs.353.47 Cr towards matured subordinated debts, raised Rs.20.79 Cr as NCD and Rs.125.28 Cr as subordinate debt. The overall CRAR and Tier-I CRAR of the company stood at 29.79% and 19.64%, respectively. The company plans to improve operational efficiency and profitability, including branch restructuring, expansion into southern and central India, and reviewing loan products. As of March 31, 2024, the company had 76 branches in Kerala, 50 in Karnataka, and 9 in Andhra Pradesh, with plans to expand into Tamil Nadu. The company has transferred Rs. 2,08,24,316.36 to statutory reserves. The Company has not accepted or renewed any deposits covered under chapter V of Companies Act, 2013. There were 13 Board Meetings during the year. The company appointed M/s. Prasanth and Associates as the Secretarial Auditor to make the Secretarial Audit report for the financial year 2023-24. During the year, the Company had issued and allotted 28000000 Equity shares of Rs. 5 each aggregating Rs. 14,00,00,000 on Right issue basis. **Management Discussion and Analysis Report** NBFCs facilitate financial inclusion. The industry is expected to be worth USD 326 billion by 2023. NBFCs can expand operations by leveraging blended finance and employing digital tools. There is increased competition from the banking sector and NBFCs will need to investigate securitization, co-origination, and co-lending, and M&A activity. The company's strengths include a solid history of funding against gold jewelry and technology adoption. Weaknesses/areas for improvement are refinancing, non-flexibility in NPA classification, limited leverage ratio, and lack of education among people. A majority of people in India reside in places where banks are hesitant to offer loans providing an area where NBFCs can intervene and expand their credit delivery. The rate of credit growth accelerated in fiscal 2023 and is now comparable to pre-COVID levels. Systemic retail credit increased by 19.2% while overall credit is estimated to have grown by 13.3%. **Financial Performance and Segment Analysis** Operating revenue has dropped from Rs.149.65 crore to Rs.124.99 crore sand interest income from the loan has decreased from Rs.136.15 crore to Rs.117.24 crore. During FY 2023-2024, the percentage of the vehicle loan segment decreased from 53.90% to 40.55%, and the traders loan decreased from 4.27% to 3.03%. On the other hand, the percentage of gold loans has increased from 27.54% to 32.26%, while the percentage of microfinance has increased from 14.29% to 24.16%. A segment-wise split of income as of March 2024 is provided for vehicle loans, gold loans, micro finance, and traders loans. The company also concentrated on utilising its resources in those geographies that offer better cost efficiency and margins. **Outlook, Risks and Concerns, and Internal Control** The company concentrated on resizing and recasting its loan portfolios, placing a greater emphasis on quick recycling loan products like traders' loans and gold loans. The company collected Rs.3.52 crore during the previous year (2023–24), and efforts are being made to collect the balance NPAs. Key risks include credit risk, interest rate risk, market risk (price of collateral), liquidity risk, and operational risk. A methodical audit plan is in place which will occur 1) in all branches once every 2 months, 2) for gold in branches every month, and 3) for other offices, every quarter. A clear performance management model is in place. **Auditor's Report** An independent auditor's report from V.K.S. Narayan & Co., Chartered Accountants, provides an unqualified opinion on the financial statements as of March 31, 2024. The report states that the financial statements present fairly the financial position, financial performance, and cash flows of Maxvalue Credits and Investments Ltd in accordance with accounting principles generally accepted in India. The report also addresses the responsibilities of management and those charged with governance, the auditor's responsibilities, and compliance with ethical requirements and legal and regulatory requirements, including the Companies Act, 2013. Additionally, the auditors provided a separate report in "Annexure B", expressing an unmodified opinion on the adequacy and operating effectiveness of the company's Internal Financial Control over Financial reporting **Financial Statements** The balance sheet as of March 31, 2024, shows total equity and liabilities of Rs 51,728.99 Lakhs, and total assets of the same amount. Key components include Share capital of Rs 17,875.98 Lakhs, Reserves and surplus of -Rs 7,839.89 Lakhs, and Long term borrowings of Rs 22,507.01 Lakhs. The profit and loss statement for the year ended March 31, 2024, reports a Total Revenue of Rs 13,671.51 Lakhs, Total Expenses of Rs 12,653.00 Lakhs and Profit / (Loss) for the period of Rs 1,041.22 Lakhs. The cash flow statement for the year ended March 31, 2024, provides details of cash flows from operating, investing and financing activities. It is shown that cash flow from operating activities Rs 8,338.05 Lakhs, Cash flows from investing activities of -Rs 53.63 Lakhs, and Cash flows From Financing Activities of -Rs 9,548.53 Lakhs. This resulted in a Net increase/decrease in cash or cash equivalents of -Rs 1,264.11 Lakhs. **Additional Financial Disclosures** * The financial statement notes outline accounting policies, use of estimates, details on property, plant, and equipment, intangible assets, and employee benefits. * Detailed information on provisions, contingencies, foreign exchange transactions, investment, cash flow statement, and specific asset and liability items is also provided. * The financial instruments used, segments reported, events after the balance sheet date, taxation, and earnings per share are also covered. * Ratios such as capital adequacy, liquidity, and profitability, along with an analysis of related party transactions, are disclosed. * Information on gross and net NPAs is presented. * Composition of assets and liabilities in various categories is also provided.

Maxvalue Credits and Investments Unlisted Shares

ANNUAL REPORT 2022-23 **Corporate Information:** Maxvalue Credits and Investments Limited is an NBFC with its registered office in Thrissur, Kerala. The Board of Directors includes Sri. Kottarath Nandakumar (Managing Director), Sri. Manoj VR (Whole-Time Director), and several Non-Executive and Independent Directors. Smt. Salini Narayanan K is the Chief Financial Officer and Sri. Akhil B Vijay is the Company Secretary. M/s. Unnikrishnan & Co are the Statutory Auditors, and M/s. SKDC Consultants Limited are the Registrar & Share Transfer Agents. **Managing Director's Message:** The Managing Director is pleased to deliver the message for the 28th Annual General Meeting of Maxvalue Credits & Investments Ltd. Operations started in three southern states: Kerala, Karnataka, Andhra Pradesh, and soon Tamil Nadu. Even with the impact of floods and COVID-19, the company managed issues effectively without salary cuts or retrenchment, implementing minimum wages. Sub-Debt Maturity repayment proceeded without delinquency. The company focuses on strengthening operations at the grass-root level to achieve sustainable results, utilizing high-efficiency computer software and networking. The Personal cadre's dedication is an asset. New opportunities are being explored in finance, such as securitization and co-lending, to enhance sustainability, with a focus on profit-making branches and high-yielding portfolios. **Notice to Shareholders:** The 28th Annual General Meeting will be held on Friday, July 28th, 2023, at 11:30 a.m. IST via video conferencing. The ordinary business includes: * Adopting the Audited Balance Sheet as of March 31st, 2023. * Re-appointing Mr. Manoj Vellamparambil Raman and Mr. Christo George as Directors. Special business includes: * Issuing fully Secured Redeemable Non – Convertible Debentures on Private Placement Basis, up to Rs. 150 Cr. * Mortgaging, charging, or hypothecating the assets of the company to secure borrowings. * Ratifying the appointment of Mr. Kottarath Nandakumar as the Managing Director for five years, with a minimum remuneration of Rs. 24,00,000/- per annum if profits are inadequate. The notice details e-voting procedures, including instructions for those holding shares in physical and dematerialized forms. The Register of Members and Share Transfer Books will be closed from July 22nd to July 28th, 2023. **Explanatory Statements:** These statements provide further context for the special resolutions proposed. The issue of NCDs aims to raise capital, while mortgaging assets is intended to secure loan facilities for business purposes. The reappointment of Mr. Kottarath Nandakumar as Managing Director is based on the recommendation of the Nomination & Remuneration Committee. **Board of Directors' Report:** The 28th Annual Report is presented with the Audited Financial Statements for the year ended March 31st, 2023. Key financial figures (in Rupees): * Total Income: 1,54,91,47,096.39 (2022-23) vs. 1,57,08,78,125.69 (2021-22) * Total Expenditure: 1,78,18,37,751.37 (2022-23) vs. 1,94,57,03,297.00 (2021-22) * Loss for the Year: -21,54,38,625.23 (2022-23) vs. -37,17,37,967.00 (2021-22) No dividend is recommended for the Financial Year 2022-23. The company provides vehicle, gold, trader, and micro-finance loans and secured Non-Convertible Redeemable Debentures and Subordinated Debts. The Indian NBFC sector's importance is growing. The NBFC was able to absorb the shocks of the pandemic. Asset quality has improved, and capital buffers have augmented. RBI's stress test reveals that 8% to 13% of NBFCs might fail to meet the minimum capital requirement under various stress scenarios. Credit extended by NBFCs is picking up, with the largest quantum deployed to the industrial sector, followed by retail, services, and agriculture. Due to RBI restrictions imposed in February 2020, the Company's portfolio size reduced to Rs.562 Cr (March 31st, 2023) from Rs.658 Cr (March 31st, 2022). Vehicle and Gold loans form a major portion of the Asset under Management. The company plans to improve branch profitability, close loss-making branches, expand in profitable areas, and review loan products. Liquidity management is a key focus, and the company aims to replace maturing funds with equity and fresh borrowings. Recovery of written-off amounts and branch/product profitability are prioritized. The company's branch network comprises 81 branches in Kerala, 52 in Karnataka, and 7 in Andhra Pradesh. The company is working towards closing branches that are not profitable. Subordinated Debts and NCDs are the major funding sources. The company repaid Rs.191.56 Cr towards maturity payments of subordinated debt and debentures. The company seeks to obtain loans from commercial banks. Authorized share capital is Rs.500 Cr, and paid-up share capital is Rs.164.75 Cr. The capital adequacy ratio as of March 31st, 2023, was 17.62%. The company has an Internal Audit and Control System, reviewed by the Audit Committee. The board has placed a comprehensive risk management policy and monitors risks through committees. There were 1464 employees as of March 31st, 2023. The company has complied with applicable regulations from the Reserve Bank of India and has a related-party transaction policy displayed on its website. Several directors are liable to retire and are proposed for re-appointment. Mr. Kottarath Nandakumar was appointed as Managing Director in January 2023, and Mr. Paulson Chirayath Varkey resigned from the Board. Independent Directors have submitted declarations of independence. The Board met on 10 occasions during the year. Directors confirmed compliance with accounting standards, maintenance of records, and preparation of accounts on a going concern basis. The Auditors' Report contains no qualifications. No frauds have been reported by the Statutory Auditors. The Company appointed M/s. Unnikrishnan & Co as Statutory Auditors, who are eligible to continue as Auditors. The company isn't required to appoint a Cost Auditor. Secretarial Audit was conducted by M/s. Prasanth and Associates. The company is a Non-Banking Financial Company and has taken measures for energy conservation. No foreign exchange earnings or outgo occurred. The company has no subsidiaries or joint ventures. The company hasn't developed and implemented any Corporate Social Responsibility initiatives. Contracts with related parties are reviewed by the Audit Committee. Particulars of employees who received remuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not stated. The company has constituted Audit Committee. There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and company's operation in future. Material changes and commitments that have occurred after the financial year have ended. The company has not issued shares with differential rights, Employee Stock Options, or Sweat Equity Shares during the year. The Internal Complaints Committee under the Sexual Harassment of Women at Workplace Act, 2013 is in place. Auctions were held during the year (2022-23), with loan principal amounts outstanding at Rs.175,284,266.00 and interest amounts outstanding at Rs. 54,267,083.00, resulting in a total of Rs. 229,551,349.00 and value fetched of Rs.223,223,118.87. **Annexure A:** The Company has received independence certificates from independent directors. **Annexure B:** Details particulars of contracts and the arrangements **Annexure C:** We have audited the internal financial controls of Maxvalue Credits and Investments Limited The company’s financial statement complies with the accounting standards **Management Discussion and Analysis Report:** NBFCs enhance the financial system and promote inclusive growth by providing financial services to the less-banked and unorganized sectors. They play a major role in the country's economic transformation by improving access to credit, supported by digital transformation. NBFCs have a large opportunity to grow. **SWOT Analysis:** * Strengths: Strong track record in financing against gold jewelry, technology adoption, and adequate capitalization. * Weaknesses: Challenges associated with non-gold loan segments, regulatory restrictions. * Opportunities: Untapped potential in gold loans, technology innovations. * Threats: Sharp decline in gold prices, future regulatory changes, financial performance vulnerability to interest rate risk, and credit risk. The table shows the P and L statement for March 2023 (in Lakhs) Additional revenue has reduced over previous financial years due to reversal of collected interest due to increase in NPA’s The company diversified into Gold loan segment **D. Outlook:** The Reserve Bank of India still has the company under supervisory restrictions as of the date of the report. Company emphasizes fast recycling loan products and tries to better the cost efficiency and margins. Company writing off NFA reduces the financial loss **E. Risks and Concerns:** Company risk management is integral to the business , with the key risks being:Credit Risk, Interest Rate Risk, Market Risk (collateral price), Liquidity Risk and Operational Risk. Company has put an adequate internal control system in place and reviews audits A systematic audit plan is in place **G. Discussion on Financial Performance with Respect to Operational Performance:** Revenue from operation has decreased over year with decline in interest income due to NFA Comparison of Interest Income table included To reduce risk company diversified into Gold loan segment Interest Cost data Included. **Maxvalue follows the following processes:** * All the other offices, we put to audit in every quarter. * The audit rectifications are strictly followed up and pending irregularities reviewed in the Audit committee. The Company has begun a transformation of the technology landscape. Loan write offs, as well as other assets are explained. **Independent Auditor’s Report:** Addressed to the members of MAXVALUE CREDITS AND INVESTMENTS LTD Independent audit was conducted following guidelines and report provides the following: * Report on Audited Financial Statements * Opinion * Basis for opinion * Key Audit Matters * Emphasis of Matter * Information other than the financial statements and auditors’ report thereon * Management’s Responsibility for the Financial Statement * Auditor’s Responsibility * Report on Other Legal and Regulatory Requirements * Annexure A,B,C all referenced Includes information on loan amounts Other compliance rules outlined Important financial data included in final financial document for member review and vote.

Maxvalue Credits and Investments Unlisted Shares

The Annual Report 2021-22 for Maxvalue Credits and Investments Ltd. covers a period of significant challenge and adaptation for the company. The company experienced a net loss during the financial year, primarily attributed to a high level of Non-Performing Assets (NPAs) stemming from the economic slowdown related to the COVID-19 pandemic. **Chairman's Overview:** * The Chairman acknowledged the impact of the COVID-19 pandemic, which necessitated holding the Annual General Meeting (AGM) virtually. * He highlighted the company's net loss for the year due to high NPA levels but expressed optimism about improving loan collections and easing NPA pressures. * Expansion plans were announced, including exploring operations in Telengana, Tamil Nadu, Goa, and Maharashtra, building on the profitability of existing branches in Karnataka and Andhra Pradesh. * The company aimed to expand its equity base and replace maturing long-term borrowings with cheaper funding sources. * Efforts to address challenges such as bad debts, low-yielding loan schemes, and loss-making branches were underway. **Notice to Shareholders and Corporate Governance:** * The 27th Annual General Meeting was scheduled for September 16, 2022, to be conducted virtually. * The agenda included adopting the audited financial statements, appointing directors, and special resolutions for issuing Non-Convertible Debentures (NCDs), mortgaging company assets, and increasing the authorized capital. * Details regarding e-voting procedures, participation in virtual meetings, and contact information for inquiries were provided. * Directors retiring by rotation and eligible for re-appointment were Mr. Nandakumar Kottarath and Mr. Gireesh Kumarapanicker. * The authorized share capital was proposed to be increased from Rs. 200,00,00,000 to Rs. 500,00,00,000. * Explanatory statements related to the special business items (issue of NCDs, mortgage, and increasing authorized capital) were included. **Directors' Report:** * The company's financial performance indicated total income of Rs. 1,57,08,39,011 and total expenditure of Rs. 1,94,57,03,297, resulting in a net loss of Rs. 37,17,37,967. No dividend was recommended. * Business operations involved providing various loans and investment opportunities, adhering to Reserve Bank of India (RBI) guidelines. * The report acknowledged the recovery from the pandemic-induced slowdown but also recognized the challenges of rising inflation and policy corrections. * The company aimed to improve yield through gold loans and traders' loans, focusing on cost-efficiency in Karnataka and Andhra Pradesh. * An NPA monitoring and recovery mechanism was established to reduce gross NPAs by 50% during 2022-23 and to less than 4% of total assets by 2023-24. * The company repaid Rs. 6.47 Cr towards redemption of matured NCDs and Rs. 11.587 Cr towards matured subordinated debts but did not raise any additional borrowings during the year. * As of March 31, 2022, the company had 71 branches in Kerala, 50 in Karnataka, and 4 in Andhra Pradesh, with plans to open 35 to 40 new branches in 2022-23. * Internal audit and control systems were in place, with a Risk Management Committee to monitor risks. * The company had 1632 employees as of March 31, 2022. * The company is a Systemically Important Non-Deposit taking NBFC registered with the RBI. * A policy on related party transactions is in place. * The Board met on 9 occasions during the year. * Details on directors' attendance at meetings were provided. * The Board confirmed compliance with applicable laws and regulations. * M/s. Unnikrishnan & Co were appointed as Statutory Auditors. * M/s. Prasanth and Associates were appointed as the Secretarial Auditor, and their report was attached. **Secretarial Audit Report:** * The report confirmed compliance with the Companies Act, Depositories Act, and Foreign Exchange Management Act (FEMA). * The report identified the following laws as specifically applicable to the company: All the Rules, Regulations, Guidelines and Circulars applicable to Non-banking Financial Companies under the RBI Act 1934 and The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. **Management Discussion and Analysis Report:** * The report provided an overview of the NBFC industry structure, opportunities, and threats. * The NBFC sector faced severe disruptions in Q1:2020-21 due to the COVID-19 pandemic, followed by a revival aided by policy support. * A SWOT analysis highlighted strengths in financing against gold jewelry, adequate capitalization, and a stable funding profile. Challenges included non-gold loan segments and operational risks. Opportunities included untapped potential in gold loans and technology innovations. Threats included gold price decline, regulatory changes, interest rate risk, and credit risk. * Details on segment-wise (vehicle loan, gold loan, business loan, consumer loan) financial performance for March 2022 were presented. * The company’s outlook emphasized reducing NPAs, managing the company’s portfolio, expansion into other states. * The company has board approved Enterprise Risk Management Policy **Financial Statements & Notes:** * The balance sheet as of March 31, 2022, showed total equity and liabilities of Rs. 84,468.97 Lakhs and total assets of Rs. 84,468.97 Lakhs. * The profit and loss statement for the year ended March 31, 2022, indicated a total revenue of Rs. 15,708.39 Lakhs and a loss before tax of Rs. (3,748.25) Lakhs. * Cash flow statement for the year ended 31st March 2022 show net cash flows from operating activities of Rs. 2,336.13 Lakhs * Detailed notes on share capital, reserves and surplus, long-term borrowings, trade payables, provisions, revenue from operations, deferred tax assets, cash and bank balances, and other financial items were provided. * The audit opinion was unmodified, but vendor confirmations showed a balance of Rs. 73,72,827.31 with most being confirmed. * It was observed that based on the inspection conducted by the RBI during the period September 18 to September 27, 2019, RBI directed that:The Company shall restrict expansion of its risk weighted assets. **Other Key Points:** * The report included information on related party transactions (AOC-2), * Remuneration of Directors. * A report from the independent auditor included information on internal financial controls, emphasizing their effectiveness as of March 31, 2022. In summary, the Maxvalue Credits and Investments Ltd. Annual Report for 2021-22 detailed a year marked by financial losses due to NPA challenges stemming from the COVID-19 pandemic. Despite these challenges, the company outlined plans for expansion, improved efficiency, and strategies to address NPAs and reduce funding costs. The report also detailed the company's adherence to regulatory requirements, corporate governance practices, and risk management protocols.

Maxvalue Credits and Investments Unlisted Shares

Maxvalue Credits and Investments Limited – PDF Summary **Corporate Information** Maxvalue Credits and Investments Limited is a public limited company (CIN: U65921KL1995PLC009581) with its registered office located at 1st Floor, Ceekay Plaza, Koorkkenchery, Thrissur 680007. The company operates as a Non-Banking Finance Company (NBFC) with a network of 96 branches across Kerala and Karnataka as of March 31, 2021. It is classified as a Systemically Important Non-Deposit taking NBFC. The Board of Directors includes Sri. Paulson CV (Chairman), Sri. Manoj VR, Sri. Roy Johnson V and Sri. Christo George as Non-Executive Directors; Sri. Parameswaran PN and Sri. Saraladevi M as Independent Directors; and Sri. Prathapan KR and Sri. Gireesh KK as Whole-time Directors. Key managerial personnel include Sri. CG Nair (Chief Executive Officer), Sri. Tojo Jose (Chief Financial Officer), and Sri. Akhil B Vijay (Company Secretary). The statutory auditors are M/s. Unnikrishnan & Co, and the Registrar & Share Transfer Agents are M/s.SKDC Consultants Limited. **Chairman's Desk Summary (CV Paulson)** The Chairman's address highlighted the challenges posed by the Covid-19 pandemic in 2020-21. Lockdowns and movement restrictions adversely affected lending and loan collections, leading to higher NPAs. Despite these challenges, the company improved its profits, closing FY 2020-21 with a net profit of Rs. 242 lakhs compared to Rs. 173 lakhs in the previous year. High-cost, loss-making branches in Kerala were eliminated, reducing the branch size from 156 to 71. Karnataka branch operations started yielding a net surplus, and the company plans to expand into Andhra Pradesh and Tamil Nadu in 2021-22 while focusing on business consolidation and cost control. **Notice to Shareholders (26th Annual General Meeting - September 09, 2021)** The 26th Annual General Meeting (AGM) will be held virtually on September 9, 2021, to transact ordinary and special business. Ordinary business includes adopting the audited financial statements for the year ended March 31, 2021, and appointing directors retiring by rotation (Mr. Chirayath Varkey Paulson and Mr. Prathapan Karumanthra Raman). Special business includes: * Issue of fully Secured Redeemable Non-Convertible Debentures (NCDs) on Private Placement Basis, up to an aggregate limit of Rs.50 Cr. * Mortgaging the assets of the company. * Changing the designation of Mr. Christo George and Mr. Manoj Vellamparambil Raman as Whole-Time Directors. * Ratifying/Approving Related Party Transactions. Members are advised to register their email addresses and participate in electronic voting. **Annexure to Notice** Explains the rationale for the special resolutions. The issue of NCDs requires shareholder approval under Section 42 of the Companies Act, 2013. Mortgaging the company's assets requires approval under Section 180(1)(a) of the same act, to secure loans. The change in designation of Mr. Christo George and Mr. Manoj Vellamparambil Raman is proposed due to the resignation of Mr. Prathapan Karumanthra Raman and Mr. Gireesh Kumarapanicker respectively, from the Whole-Time Director post. The ratification of related party transactions pertains to the sale of fixed assets to M/s Maxvalue Consultancy Services Private Limited, exceeding 10% of the company's net worth in FY 2019-20. **Report of the Board of Directors** * **Financial Performance (FY 2020-21):** Total Income decreased from Rs. 185.21 Cr (2019-20) to Rs 154.11 Cr. Total Expenditure decreased from 184.65 Cr to 154.55 Cr. Net profit was Rs.2.42 Cr (compared to Rs.1.39 Cr in the previous year). No dividend recommended. * **Business Operations:** Engaged in providing loans (vehicle, gold, traders, microfinance) and investments (Non-Convertible Debentures). * **Economic Scenario:** The Covid-19 pandemic caused reverses and high NPA levels. Easing restrictions in the second half of the year normalized lending. * **Business Outlook:** Focus is on sustaining and increasing profits. RBI advised to contain business within parameters as of Feb 4, 2020 (no balance sheet increase, no increase in risk-weighted assets, no new business lines). * **Company Performance:** Total loans as of 31.03.2021: Rs 719.08 Cr (0.31% growth). The company is present in Kerala and Karnataka with 96 branches. * **Branch Expansion/Consolidation:** Karnataka operations (25 branches) performed well. Kerala branch network consolidated to 71 branches by September 2020. A target was set for September 2021 to ensure all branches achieve break-even status. * **Resources:** Subordinated Debts and Secured NCDs remained major funding sources. Capital adequacy ratio as of 31.03.2021 was 21.38%. * **Reserves:** Rs.48,41,802.14/- transferred to statutory Reserves. * **Internal Audit/Control:** Proper internal audit and control system in place with an experienced professional overseeing it. * **Risk Management:** A comprehensive risk management policy is in place. * **Human Resources:** 1045 employees as of 31st March 2021, with a training department. * **Deposits:** The company has not accepted or renewed any public deposits. * **Related Party Transactions:** Policy on related party transactions is displayed on the company website. * **Directors:** Mr. Chirayath Varkey Paulson and Mr. Prathapan Karumanthra Raman are retiring by rotation and proposed to be reappointed. * **Declaration from Independent Directors:** Received. * **Policy on appointment and remuneration of Directors:** Policy formulated as required. * **Board Meetings:** 6 board meetings held during 2020-21. * **Director's Responsibility Statement:** Confirms compliance with Section 134(5) of the Companies Act 2013. * **Extract of Annual Return:** Will be uploaded to the company website. * **Auditor’s Remarks:** Auditor's Report contains observations on unreconciled bank balances of Rs. 396,405.00, and sale of fixed asset of M/s Maxvalue Consultancy Services Pvt Ltd. * **Board's Reply:** Efforts are on to reconcile the unreconciled bank balance with an unreconciled balance as per the Auditors finding. The sale of fixed assets, approval of the General Body should have been obtained for the sale. * **Secretarial Audit:** Secretarial audit conducted by M/s. Prasanth and Associates. * **Conservation of Energy, Technology Absorption, Foreign Exchange Outgo:** Adequate measures taken for conservation of energy. The company does not have any foreign exchange earnings and outgo. * **Business Continuity during Pandemic:** Digitalisation initiatives beneficial. * **Corporate Social Responsibility Policy:** Not implemented. * **Particulars of contracts or arrangements made with related parties** Particulars of contracts/arrangements/transactions entered by the Company with related parties are: Hykon India Limited, Maxvalue, Maxvalue Consultancy Services. * **Particulars of employees:** Not applicable as no employee received remuneration exceeding the limit. * **Constitution of Audit Committee:** Applicable to the company. * **Details of significant and material orders passed by regulators or courts or tribunal:** Not applicable. * **Material changes and commitments:** Not applicable. * **Disclosure regarding issue of equity shares with differential rights:** Not applicable. * **Disclosure regarding issue of Employee Stock Options:** Not applicable. * **Disclosure regarding issue of Sweat Equity Shares:** Not applicable. * **Details of Auctions Held During the Year 2020-21**Number of Loan Accounts:56.Principal amount outstanding at the dates of auction(A) Rs.4,37,647. Interest amount outstanding at the dates of auction (B) 1,97,926. Total (A + B) Rs. 6,35,573. Value fetched (Rs.)7,83,797. * **Acknowledgement:** Thanks stakeholders and employees. **Annexures to Report:** * Declaration regarding receipt of Certificate of Independence * Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arm's length transaction under third proviso thereto. * Secretarial Audit Report * Details of Board Meetings and attendance of the Directors **Independent Auditor's Report** * **Opinion:** The financial statements provide a true and fair view of the company's affairs as of March 31, 2021, in accordance with accounting principles generally accepted in India. * **Basis for Opinion:** The audit was conducted in accordance with the Standards on Auditing. * **Other Matters:** A few issues were highlighted: unreconciled bank balances and vendor confirmations in view of the Covid 19 pandemic. * **Management's Responsibility:** Management is responsible for preparing financial statements that provide a true and fair view. * **Auditor's Responsibility:** Express an opinion based on the audit. * **Report on other Legal and Regulatory Requirements:** Includes a statement on matters specified in paragraphs 3 and 4 of the Order, and confirms compliance with Section 143(3) of the Act. **Annexure B** Reports on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 * Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. * Our opinion the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these financial statements and such internal financial controls over financial reporting were operating effectively as at 31 March 2021 **Financial Statements** The document presents the Balance Sheet as at 31st March 2021, the Profit and Loss Statement for the year ended 31st March 2021, the Cash Flow Statement for the year ended 31st March 2021, and notes forming part of the financial statements. Notes detail Share Capital, Reserves & Surplus, Long Term Borrowings, Other Long Term Borrowings, Fixed Assets, Loans and Advances, Current Assets, Current Liabilities, and various revenue and expense items.