Maxvalue Credits and Investments Unlisted Shares

Annual Report Summary

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 2020-21Number 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.