Annual Report: 2021
Here is a comprehensive summary of the provided Berar Finance Limited 31st Annual Report 2020-2021.
Overview:
The report presents the 31st Annual Report and audited accounts of Berar Finance Limited for the financial year ended March 31, 2021 ("FY 2020-2021"). It covers financial results, appropriation of profits, funding resources, review of operations, branch network, compliance with Reserve Bank of India (RBI) guidelines, related party transactions, credit rating, and other corporate information.
Financial Results:
Appropriation of Profits:
The Directors proposed appropriations from the net profit (after tax) as follows:
Dividend:
The Directors recommend a dividend of ₹1.00 per Equity Share for FY 2020-2021, compared to ₹0.50 per Equity Share in the previous financial year.
Funding Resources:
Review of Operations:
Financing of two-wheelers remains the core product. The company expanded into agri-equipment, office equipment, car, and personal loans. The Company saw a 34% increase in disbursement and a 28.62% increase in gross income during FY 2020-21.
Branch Network:
The company had 91 branches as of March 31, 2021, which increased to 95 subsequently. The network spans Maharashtra (39), Madhya Pradesh (16), Chhattisgarh (15), Telangana (15), Gujarat (5), and Karnataka (5).
RBI Guidelines:
Berar Finance is classified as Systemically Important Asset Finance Company-Deposit Taking. As of March 31, 2021, the Capital adequacy ratio stood at 20.46%. The company falls under the category of Investment & Credit Company.
Credit Rating:
The company's cash credit facilities, public deposits schemes, and NCDs are rated by ICRA Ltd.
Listing on Stock Exchanges:
The company became a debt-listed company by listing Non-Convertible Debentures (NCDs) on the Wholesale Debt Market Segment of BSE Limited on August 14, 2020.
Statutory Auditors:
M/s Pravin Dhiran & Co. are the Statutory Auditors. The Auditors did not report any fraud during the financial year.
Internal Auditors:
M/s. Somalwar Sahasrabudhe and Associates were appointed as Internal Auditors. Mr. Satish Kumar Gupta was designated as the 'In house' Internal Auditor.
Secretarial Auditors:
M/s. SPZ & Associates are the Secretarial Auditors. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.
Directors:
Changes in the Board composition include appointments of Ms. Rashmi Mitkary, Mr. Avishek Addy, and Mr. Harishchandra Sukhdeve as Additional Directors. Executive Directors Mr. Maroti Jawanjar and Mr. Sandeep Jawanjal were appointed. Resignations from the Board include Mr. Mahesh Parasuraman and Mr. Ashok Ghanshyam Kachore. Mr. Dattatraya Prabhakar Dalal will retire by rotation.
Key Managerial Personnel:
Mr. Sandeep Jawanjal was designated as the Chief Financial Officer (CFO) of the Company.
Performance Evaluation:
The Board of Directors conducted an annual evaluation of its performance, Board Committees, and individual Directors for FY 2020-21.
Corporate Governance:
The company adheres to high standards of Corporate Governance Code.
Directors' Responsibility Statement:
The directors confirm the following: applicable accounting standards have been followed, accounting policies have been applied consistently, proper and sufficient care has been taken for the maintenance of accounting records, the annual accounts have been prepared on a going concern basis, internal financial controls are adequate and operating effectively, and proper systems are in place to ensure compliance with applicable laws.
Remuneration Policy:
The Company has adopted policies on Remuneration of Directors and Key Managerial Personnel and Employees.
Risk Management:
The Company faces credit risk, liquidity risk, interest rate risk, and operational risk. Risk Management Committee and Assets Liability Management Committee monitor these risks.
Internal Financial Controls:
The internal financial controls are commensurate with the size, scale, and complexities of its operations.
Human Resources and Employees Stock Options Plan:
"Berar Employee Stock Option Plan, 2019" ("ESOP, 2019"/"Plan") was introduced. 13,200 options were vested on December 23, 2020.
Conservation of Energy and Technology Upgradation:
The Company is not engaged in any manufacturing activity. The company had assured swiftly processing the loans, accounting facilities at various levels of the organisation, improved Network and Cyber security.
Corporate Social Responsibility (CSR):
The Company pursues CSR programs as per its approved Corporate Social Responsibility Policy. The Annual Report on CSR activities is annexed to the Report. In line with the said amendments, the Board, at its meeting held on 29 June 2021, amended the existing Policy.
Prevention of Sexual Harassment at Workplace Policy:
The Company has a policy for prevention, prohibition and redressal against sexual harassment of women at the workplace.
Secretarial Standards:
The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).
Change in Nature of Business:
There was no change in the nature of business.
Material Changes & Commitments:
No material changes or commitments that could affect the Company's financial position have occurred.
Acknowledgement:
The Board acknowledges the support of members, depositors, debenture holders, banks, financial institutions, and regulators.
Management Discussion and Analysis:
FY 2020-2021 was a challenging year for the economy and financial services. The company finances 2-wheelers with a focus on semi-urban and rural areas. The company expects sustained growth in business and profitability. The Company added 25 branches and 245 sales points during FY 2020-21.
Financial Performance:
Total income increased to ₹13,486.18 lakhs from ₹10,485.43 lakhs, an increase of 28.62%. Total cost increased by 35.08%. Profit before tax increased by 1.60%. Profit after tax increased by 5.00%.
Secretarial Audit Report (Annexure II)
The report provides details of compliance with the Companies Act, Securities Contracts (Regulation) Act, Depositories Act, Foreign Exchange Management Act, and SEBI regulations.
Report on Corporate Governance (Annexure III)
The report covers aspects of the Board of Directors, board meetings, committees (Audit Committee, Risk Management Committee, Asset-Liability Management (ALM) Committee, Nomination and Remuneration Committee, Information Technology (IT) Strategy Committee, Stakeholders Relationship Committee, and Fund Management Committee).
Annual Report on CSR Activities (Annexure IV)
Provides information on the CSR policy, composition of the CSR Committee, CSR projects, and expenditure.
Form AOC-2 (Annexure V(i))
Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties. All transactions entered into by the Company during the year with related parties were on an arm's length basis and not material in nature.
Policy on Related Party Transactions (Annexure V(ii))
Details the policy on related party transactions in accordance with RBI guidelines.
Disclosure under Employee Stock Option Plan (Annexure VI)
Details related to ESOP 2019.
Particulars of Employees (Annexure VII)
Information on employee remuneration, details of which are provided.
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