Kailash Auto Finance - Bombay Stock Exchange AUTO FINANCE LTDKAILASH AUTO FINANCE LTD II. Travel...

KAILASH AUTO FINANCE LTDKAILASH AUTO FINANCE LTD

KAILASH AUTO FINANCE LTDCIN: L65921UP1984PLC006829

Registered Office: 19, Rollant Complex, 37/17, The Mall, Kanpur - 208001, Uttar PradeshCorporate Office: R. No. 10, Ground Floor, Rajsheela Premises Co. Op. Society Ltd,

Building No. 597, J.S.S. Road, Mumbai - 400002, Maharashtra.Ph: 0512-3012032 • Email: [email protected] • Website www.kailfin.com

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Twenty Ninth Annual General Meeting of the members of Kailash AutoFinance Limited will be held at Mehfil Restaurant, 16/12, Civil Lanes, Near I G Police Residence,Kanpur-208001, Uttar Pradesh on Tuesday, 23rd day of September, 2014 at 11:00 A.M. to transact thefollowing businesses:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2014, the statementof Profit and Loss for the year ended on that date and the Reports of the Directors’ and theAuditors’ thereon.

2. To appoint a Director in place of Mr. Babalu Prasad Keshari (DIN: 06695960), who retires byrotation at this Annual General Meeting and, being eligible, offers himself for re-appointment.

3. To appoint Auditors of the Company to hold office from conclusion of this AGM till the conclusionof the next AGM and Fix their remuneration and in this regard to consider and if thought fit, topass, with or without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provision of section 139 of the Companies Act, 2013 andrules made there under, including any statutory modification(s) or re-enactment thereof forthe time being in force, and pursuant to the recommendations of Audit Committee of theBoard of Directors, Mr. Anil Agarwal, Chartered Accountants, Jabalpur (Membership No:079054), be and is hereby appointed as Statutory Auditors of the Company to hold the officefrom the conclusion of this Annual General Meeting until the conclusion of the next AnnualGeneral Meeting at the remuneration to be fixed by the Board of Directors in consultationwith the Auditors.”

SPECIAL BUSINESS:

4. To consider and, if thought fit, to pass, with or without modification(s), the following resolutionas a Special Resolution:

“RESOLVED THAT in accordance with the provisions of Sections 196, 197 and other applicableprovisions, if any, of the Companies Act, 2013 (“the Act”) read with Schedule V of the Act(including any statutory modification or re-enactment thereof, for the time being in force) andthe Articles of Association of the Company and subject to the approval of the CentralGovernment and any other authorities and in case there is inadequacy or absence of profits,consent of the Company be and is hereby accorded to pay minimum remuneration as statedhereunder to Mr. Babalu Prasad Keshari (DIN: 06695960), Managing Director of the Company,for the remaining period of his tenure commencing from the financial year April 1, 2014.

Basic Salary:Rs. 15,000/- per month

Perquisites/Allowances:

I. Medical Expenses:Reimbursement of actual medical expenses incurred in India including hospitalization, nursinghomes and surgical charges for himself & family including premium on medical insurance.

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II. Travel Concession/Assistance:Travel Concession/Assistance (domestic) in respect of himself and his family.

III. Personal Accident Insurance:Personal Accident Insurance policy as per rules of the Company.

IV. Gratuity:Gratuity as per the rules of the Company.

V. Leave:Leave with full pay or encashment thereof, as per the rules of the Company.

VI. Conveyance Facilities:Company’s car for personal & official purposes, maintenance, running & up-keeping of motorcarincluding the salary and wages of Chauffeur.

VII. Communication Facilities:Telephone, Telefax & other communication facilities at residence.

VII. Other Perquisites:Subject to overall ceiling on remuneration, Mr. Babalu Prasad Keshari may be given otherallowances & expenses including expenses incurred for business of the Company and suchother perquisites and allowances in accordance with the rules of the Company.

The value of such perquisites/allowances shall not exceed in aggregate One Hundred andFifty Percent of the annual basic salary”.

“RESOLVED FURTHER THAT the original term of office of Mr. Babalu Prasad Keshari shallcontinue to be for a period of Three years commencing from September 23, 2013 and in anyfinancial year during his tenure in which there is adequacy of profits, in accordance with theprovisions of Sections 197 and 198 and other applicable provisions, if any, of the CompaniesAct, 2013 (“the Act”) read with Schedule V of the Act (including any statutory modification orre-enactment thereof, for the time being in force), consent of the Company be and is herebyaccorded to pay remuneration to Mr. Babalu Prasad Keshari, Managing Director not exceeding5% of the net profits individually and 10% of the net profits of the Company collectively payableto whole-time directors and/or managing directors with the power of Board of Directors to fixthe remuneration within the aforesaid limits.”

“RESOLVED FURTHER THAT in accordance with the provisions of Sections 196, 197 andany other applicable provisions, if any, of the Companies Act, 2013 and the rules madethereunder (including any statutory modification or re-enactment thereof for the time being inforce), read with Schedule V of the Companies Act, 2013, consent of the Company be and ishereby accorded to pay minimum remuneration by way of salary, perquisites and otherallowances to Mr. Babalu Prasad Keshari, Managing Director, till the approval of CentralGovernment is received.”

5. To consider and, if thought fit, to pass, with or without modification, the following resolution as aSpecial Resolution :

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisions,if any, of the Companies Act, 2013, read with Companies (Incorporation) Rules, 2014 (includingany statutory modification(s) or re-enactment thereof, for the time being in force), the draftregulations contained in the Articles of Association submitted to this meeting be and are herebyapproved and adopted in substitution, and to entire exclusion, of the regulations contained inthe existing Articles of Association of the Company.”

6. To consider and, if thought fit, to pass, with or without modification(s), the following resolutionas an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicableprovisions, if any, of the Companies Act, 2013 and the Rules made there under, (including anystatutory modification(s) or re-enactment thereof for the time being in force), read with Schedule

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IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Mr. Dipan PatelJesingbhai (DIN: 05359769), Director of the Company who retires by rotation at the AnnualGeneral Meeting and in respect of whom the Company has received a notice in writing from amember, proposing his candidature for the office of Director of the Company, be and is herebyappointed as an Independent Director of the Company to hold office for 5 (five) consecutiveyears for a term up to 31st March, 2019, and whose office shall not be liable to retire byrotation.”


“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV andall other applicable provisions, if any, of the Companies Act, 2013 and the Companies(Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s)or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement,Mr. Deepak Kunjbihari Dave (DIN: 06776698), who was appointed as an Additional Directorpursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles ofAssociation of the Company and who holds office up to the date of this Annual General Meetingand in respect of whom the Company has received a notice in writing under Section 160 of theCompanies Act, 2013 from a member proposing his candidature for the office of Director, beand is hereby appointed as an Independent Director of the Company to hold office for 5 (five)consecutive years for a term up to March 31, 2019, and whose office shall not be liable toretire by rotation.”


“RESOLVED THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV andall other applicable provisions, if any, of the Companies Act, 2013 and the Companies(Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s)or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement,Mr. Asamanja Deb (DIN: 02294879), who was appointed as an Additional Director pursuant tothe provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association ofthe Company and who holds office up to the date of this Annual General Meeting and inrespect of whom the Company has received a notice in writing under Section 160 of theCompanies Act, 2013 from a member proposing his candidature for the office of Director, beand is hereby appointed as an Independent Director of the Company to hold office for 5 (five)consecutive years for a term up to March 31, 2019, and whose office shall not be liable toretire by rotation.”

“RESOLVED FURTHER THAT for the purpose of giving effect to all above resolutions, theBoard of Directors and Secretary of the Company be and are hereby severally authorised todo all such acts, deeds, matters and things as are incidental thereto or as may be deemednecessary or desirable and to settle any question or difficulty that may arise in such manneras it may deem fit.”

By order of the Board of DirectorsFor Kailash Auto Finance Limited

Place: Kanpur Anchal GuptaDate: 28th August, 2014 Company Secretary

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NOTES1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING, IS ENTITLED TO APPOINT

A PROXY/PROXIES TO ATTEND AND VOTE, INSTEAD OF HIMSELF/HERSELF AND SUCHPROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BEEFFECTIVE SHOULD BE COMPLETED, STAMPED AND SIGNED AND MUST BE DEPOSITEDAT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORETHE COMMENCEMENT OF THE MEETING. A person can act as proxy on behalf of Membersnot exceeding fifty (50) and holding in the aggregate not more than 10% of the total sharecapital of the Company. In case a proxy is proposed to be appointed by a member holding morethan 10% of the total share capital of the Company carrying voting rights, then such proxy shallnot act as a proxy for any other member.

2. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, relating toSpecial Business to be transacted at the meeting, is annexed hereto.

3. The details of Directors seeking appointment/re-appointment pursuant to Clause 49 of the ListingAgreement are provided in annexure to this Notice & forms part of this Notice.

4. The Register of Members and Share Transfer Books shall remain closed from Thursday, 18thday of September, 2014 to Tuesday, 23rd day of September, 2014 (both days inclusive).

5. Shareholders holding shares in physical form are requested to advice any change of addressimmediately to the Company’s Registrar and Share Transfer Agents, M/s. Maheshwari Datamatics(P) Ltd., 6, Mangoe Lane, 2nd Floor, Kolkata - 700 001 and to their respective DPs in respect ofEquity Shares held in dematerialised form.

6. Corporate Members intending to send their authorised representatives to attend the meetingare requested to send a certified copy of the Board Resolution authorizing their representativeto attend and vote on their behalf at the meeting.

7. Members/Proxies are requested to bring their Attendance Slip for attending the meeting.

8. Members who hold shares in dematerialised form are requested to write their Client ID and DPID and those who hold shares in physical form are requested to write their Folio Number in theattendance slip for attending the meeting. In case of joint holders attending the meeting, onlysuch joint holder who is higher in the order of names will be entitled to vote.

9. Members desirous of obtaining any information concerning the accounts and operations of theCompany are requested to send their queries to the Company at least ten days before themeeting so that the same could be complied in advance.

10. Since the securities of the Company are compulsorily tradable in electronic form, to ensurebetter investor service and elimination of risk of holding securities in physical form, it is requestedthat the members holding shares in physical form to get their shares dematerialised at theearliest.

11. All documents referred to in the Notice will be available for inspection at the Company’s RegisteredOffice during normal business hours on working days upto the date of AGM.

12. Physical copies of the Annual Report for 2014 are being sent in the permitted mode.

13. Rule 18(3)(i) of the Companies (Management and Administration) Rules, 2014 requires aCompany to provide advance opportunity at least once in a financial year, to the Member toregister his email address and any changes therein. In compliance with the same, we requestthe Members who do not have their email id registered with the Company to get the sameregistered with the Company. Members are also requested to intimate to the Company thechanges, if any, in their email address. The Annual Report of the Company, circulated to theMembers of the Company, will also be made available on the Company’s website i.e.www.kailfin.com

14. Physical copies of Notice of the 29th Annual General Meeting of the Company inter alia indicatingthe process and manner of e-voting along with Attendance Slip and Proxy Form is being sent inthe permitted mode.

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15. In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of theCompanies (Management and Administration) Rules, 2014, the members are informed that theCompany is pleased to offer e-voting facility to caste the vote electronically. The Company hasmade necessary arrangement with the Central Depository Services (India) Limited (CDSL) tofacilitate e-voting.The e-voting facility is available at the link www.evotingindia.comThe e-voting facility will be available during the following voting period.

Commencement of e-voting From 10.01 a.m of 17th day of September, 2014

End of E-voting Upto 6.00 p.m of 19th day of September, 2014

E-voting shall not be allowed beyond 6.00 p.m. of 19th day of September, 2014.

The detailed procedure is mentioned below. For the aforesaid purpose the Company hasappointed Ms. Monalisa Datta, Practising Company Secretary, Kolkata (ACS No. 30368, CPNo. 13580) as Scrutinizer for conducting the E-voting process in a fair and transparent manner.

16. e-Voting Procedure

(A) The instructions for members for voting electronically are as under:-(i) Log on to the e-voting website www.evotingindia.com during the voting period.(ii) Click on “Shareholders” tab.(iii) Now, select “KAILASH AUTO FINANCE LIMITED” from the drop down menu and click on

“SUBMIT”(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,c. Members holding shares in Physical Form should enter Folio Number registered with

the Company.(v) Next enter the Image Verification as displayed and Click on Login.(vi) If you are holding shares in demat form and had logged on to www.evotingindia.com and

voted on an earlier voting of any company, then your existing password is to be used.(vii) If you are a first time user follow the steps given below:

(viii) After entering these details appropriately, click on “SUBMIT” tab.

Enter your 10 digit alpha-numeric PAN issued by Income Tax Department(Applicable for both demat shareholders as well as physical shareholders)·

Members who have not updated their PAN with the Company / DepositoryParticipant are requested to enter in capital letters the PAN field of10 characters as First 2 Characters of the First Holder Name followed by 8characters consisting of Folio Number prefix by “0” (or 8 characters fromright of BO-ID). No special characters or space will be taken from the nameand folio number and name shall be excluded of titles like Mr. / Mrs. / Smt. /Miss / Ms. / M/s. etc.Example:

(1) Mr. V. N. Swami and Folio Number is S0245, the PAN will beVN000S0245

(2) M/s. 4Square Company Ltd. and Folio Number is C0052 the PAN willbe 4S000C0052

Enter the Date of Birth as recorded in your demat account with the depositoryor in the company records for your folio in dd/mm/yyyy format.

Enter the Bank Account Number as recorded in your demat account with thedepository or in the company records for your folio.·Please Enter the DOB or Bank Account Number in order to Login. ·If both the details are not recorded with the depository or company then pleaseenter in the Dividend Bank Details field the Number of Shares Held by you ason Cut off date (Record Date) of 22nd August, 2014.

PAN

DOB

DividendBankDetails

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For Members holding shares in Demat Form and Physical Form


(ix) Members holding shares in physical form will then reach directly to the Company selectionscreen. However, members holding shares in demat form will now reach ‘Password Creation’menu wherein they are required to mandatorily enter their login password in the newpassword field. Kindly note that this password is to be also used by the demat holders forvoting for resolutions of any other company on which they are eligible to vote, provided thatcompany opts for e-voting through CDSL platform. It is strongly recommended not to shareyour password with any other person and take utmost care to keep your passwordconfidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting ontheresolutions contained in this Notice.

(xi) Click on the EVSN for “Kailash Auto Finance Limited” on which you choose to vote.(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the

option “YES/NO” for voting. Select the option YES or NO as desired. The option YES impliesthat you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation

box will be displayed. If you wish to confirm your vote, click on “OK”, else to change yourvote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify yourvote.

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print”option on the Voting page.

(xvii) If Demat account holder has forgotten the changed password then Enter the User ID andthe image verification code and click on Forgot Password & enter the details as promptedby the system.

(xviii) Note for Institutional Shareholders• Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) are required to

log on to https://www.evotingindia.co.in and register themselves as Corporates.• They should submit a scanned copy of the Registration Form bearing the stamp and

sign of the entity to [email protected].• After receiving the login details they have to create a user who would be able to link the

account(s) which they wish to vote on.• The list of accounts should be mailed to [email protected] and on

approval of the accounts they would be able to cast their vote.• They should upload a scanned copy of the Board Resolution and Power of Attorney

(POA) which they have issued in favour of the Custodian, if any, in PDF format in thesystem for the scrutinizer to verify the same.

(B) The voting period begins on 17.09.2014 (10:01 a.m.) and ends on 19.09.2014 (6:00 p.m.).During this period shareholders’ of the Company, holding shares either in physical formor in dematerialized form, as on the cut-off date 22.08.2014, may cast their voteelectronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(C) In case you have any queries or issues regarding e-voting, you may refer the FrequentlyAsked Questions (“FAQs”) and e-voting manual available at www.evotingindia.co.in underhelp section or write an email to [email protected].

(D) The Scrutinizer shall within a period not exceeding three (3) working days from theconclusion of the e-voting period unblock the votes in the presence of at least two (2)witness not in employment of the Company and make a Scrutinizer’s Report of the Votescast in favour or against, if any, forthwith to the Managing Director of the Company.

(E) The results of e-voting shall be declared on or after the AGM of the Company. The resultsdeclared along with the Scrutinizer’s Report shall be placed on the Company website :www.kailfin.com and on the website of CDSL and the same be communicated to the StockExchange(s)

(F) Kindly note that once you have casted your vote, you cannot modify or vote on poll at theAnnual General Meeting. However, you can attend the meeting and participate in thediscussions, if any.

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I

Name of Director Mr. Babalu Prasad Keshari

Date of Birth 19.07.1985

Date of Appointment on the Board 23.09.2013

Expertise in specific functional Area Securities & Finance Market

Qualification B.Com

Directorship in Limited Companies Nil

Membership of Committees in public limited companies Nil

Shareholding of Director in the Company Nil

II

Name of Director Mr. Dipan Patel Jesingbhai



Expertise in specific functional Area Finance & Accounts

Qualification Chartered Accountants (CA)

Directorship in Limited Companies Sunstar Realty Development Limited

Membership of Committees in public limited companies TWO


III

Name of Director Mr. Asamanja Deb



Expertise in specific functional Area Audit, Accounts and Finance

Qualification FCA, B.COM ( HONS)

Directorship in Limited Companies Sunstar Realty Development Limited

Membership of Committees in public limited companies TWO


IV

Name of Director Mr. Deepak Kunjbihari Dave



Expertise in specific functional Area Accounts and Finance

Qualification CA, B.Com

Directorship in Limited Companies Nil

Membership of Committees in public limited companies Nil



Place: Kanpur Anchal GuptaDate: 28th August, 2014 Company Secretary

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Information required to be furnished under Clause 49 of the Listing Agreement for directorsseeking appointment/reappointment in forthcoming Annual General Meeting:


EXPLANATORY STATEMENT UNDER SECTION 102 OF THE COMPANIES ACTS, 2013.

The following Explanatory Statements sets out the material facts relating to the business under 4, 5, 6,7 and 8 of the accompanying Notice:

Item No. 4

The term of office of 3 years of Mr. Babalu Prasad Keshari, Managing Director will be ending onSeptember 22, 2016. The Companies Act, 2013 effective from April 1, 2014 brought about variouschanges in the provisions pertaining to Appointment and Remuneration of Managerial Personnel. Inview of said changes, it is proposed to pass fresh resolution in terms of the Companies Act, 2013 forremuneration of Managing Director for remaining period of his tenure commencing from April 1, 2014.

Pursuant to the provisions of Sections 196, 197, 198 and any other applicable provisions, if any, of theCompanies Act, 2013 and the rules framed there under read with Schedule V of the Companies Act,2013, the appointment and remuneration of Managing Director requires approval of the shareholdersin General meeting by way of a special resolution.

Schedule V of the Companies Act, 2013 provides that where in any financial year during the currencyof tenure of the Managerial Personnel, the Company has no profits or its profits are inadequate, it maypay the remuneration upto the limits prescribed therein provided the minimum remuneration payableto Managerial Personnel is approved by the members of the Company. Further, if the total remunerationto be paid by way of basic salary, perquisites or any other allowances exceeds the ceiling limit specifiedin Clause (A), Section II of Part II of Schedule V of the Companies Act, 2013 (excluding the perquisitesprovided in Section IV of Part II of Schedule V of the Companies Act, 2013 or such other amount andperquisites as may be provided in the said Schedule V), it shall be payable subject to the approval ofCentral Government.

The Board of Directors recommends the resolution at Item No. 4 of the Notice for the approval ofmembers of the Company by way of Special Resolution.

Except Mr. Babalu Prasad Keshari, none of the other Directors/Key Managerial Personnel of theCompany and their relatives are concerned or interested, financially or otherwise, in the said Resolutionon set out at Item No. 4.

Item No. 5

The existing Articles of Association (AOA) of the Company are based on the Companies Act, 1956.Accordingly several regulations in the existing AOA either contain references to specific sections ofthe Companies Act, 1956 or are no longer in conformity with the Companies Act, 2013 (Act).

On 12th September, 2013, the Ministry of Corporate Affairs (“MCA”) had notified 98 Sections forimplementation. Subsequently, on 26th March, 2014, MCA notified most of the remaining Sections(barring those provisions which require sanction/confirmation of the National Company Law Tribunal(“Tribunal”) such as variation of rights of holders of different classes of shares (Section 48), reductionof share capital (Section 66), compromises, arrangements and amalgamations (Chapter XV), preventionof oppression and mismanagement (Chapter XVI), revival and rehabilitation of sick companies (ChapterXIX), winding up (Chapter XX) and certain other provisions including, inter alia, relating to InvestorEducation and Protection Fund (Section 125) and valuation by registered valuers (Section 247)).However, substantive sections of the Act which deal with the general working of companies standnotified. Therefore, the Companies Act, 2013 is now largely in force.

With the coming into force of the 2013 Act, several regulations of the existing AOA of the Companyrequire either alteration or deletions as the case may be. Given this position, it is considered expedientto wholly replace the existing AOA by a new set of Articles so as to align it in accordance with theprovisions of Companies Act, 2013.

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The new AOA to be substituted in place of the existing AOA are based on Table ‘F’ of the Act which setsout the model Articles of Association for a Company limited by shares.

A copy of the draft Articles of Association of the Company is available for inspection by members at theRegistered Office of the Company on any working day during business hours till the date of AnnualGeneral Meeting. The proposed new draft AOA is also being uploaded on the Company’s websitewww.kailfin.com for perusal by the shareholders. The above resolution requires approval of theshareholders in General meeting by way of a special resolution.

The Board of Directors recommends the resolution at Item No. 5 of the Notice for the approval ofmembers of the Company by way of Special Resolution.

None of the Directors/Key Managerial Personnel of the Company and their relatives are concerned orinterested, financially or otherwise, in the said Resolution set out at Item No. 5 of the Notice.

Item No. 6

Mr. Dipan Patel Jesingbhai is a Non-Executive Independent Director of the Company. He joined theBoard of Directors of the Company on 19th November, 2012. Mr. Dipan Patel Jesingbhai does not holdby himself or for any other person on a beneficial basis, any share in the Company.

Mr. Dipan Patel Jesingbhai has given a declaration to the Board that he meets the criteria ofindependence as provided under section 149(6) of the Companies Act, 2013. Under the CompaniesAct, 2013, the Company is required to appoint Independent Directors for a fixed term and their officeshall not be liable to determination by retirement of directors by rotation. Accordingly, in compliance ofSection 149, 152, Schedule IV and any other applicable provisions, if any, of the Companies Act, 2013,and the rules made thereunder, Mr. Dipan Patel Jesingbhai being eligible and offering himself forappointment is proposed to be appointed as an Independent Director upto 31st March, 2019. A noticehas been received from a member proposing Mr. Dipan Patel Jesingbhai as a candidate for the officeof Director of the Company.

In the opinion of the Board, Mr. Dipan Patel Jesingbhai fulfils the conditions specified in the CompaniesAct, 2013 and rules made thereunder for his appointment as an Independent Director of the Companyand is independent of the management. Copy of the draft letter for appointment of Mr. Dipan PatelJesingbhai as an Independent Director setting out the terms and conditions would be available forinspection without any fee by the members at the Registered Office of the Company during normalbusiness hours on any working day, excluding Saturday.

The Board considers that his continued association would be of immense benefit to the Company andit is desirable to continue to avail services of Mr. Dipan Patel Jesingbhai as an Independent Director.Accordingly, the Board recommends the resolution in relation on to appointment of Mr. Dipan PatelJesingbhai as an Independent Director, for the approval by the shareholders of the Company.

Except Mr. Dipan Patel Jesingbhai, being an appointee, none of the other Directors/Key ManagerialPersonnel’s of the Company or their relatives are concerned or interested, financially or otherwise, inthe resolution on set out at Item No. 6.

Item No. 7

The Board of Directors of the Company appointed, pursuant to the provisions of Section 161(1) of theAct and rules made there under and the Articles of Association of the Company, Mr. Deepak KunjbihariDave as an Additional Director of the Company with effect from February 14, 2014.

In terms of the provisions of Section 161(1) of the Act, Mr. Deepak Kunjbihari Dave would hold officeupto the date of the ensuing Annual General Meeting.

The Company has received a notice in writing from a member along with the deposit of requisiteamount under Section 160 of the Act proposing the candidature of Mr. Deepak Kunjbihari Dave for theoffice of Director of the Company.

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Mr. Deepak Kunjbihari Dave is not disqualified from being appointed as a Director in terms of Section164 of the Act and has given his consent to act as a Director.

As per the said Section 149, an independent director can hold office for a term up to 5 (five) consecutiveyears on the Board of a company and he shall not be included in the total number of directors forretirement by rotation.

The Company has received a declaration from Mr. Deepak Kunjbihari Dave that he meets with thecriteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and underClause 49 of the Listing Agreement. Mr. Deepak Kunjbihari Dave possesses appropriate skills,experience and knowledge; inter alia, in the field of accounts and finance.

In the opinion of the Board, Mr. Deepak Kunjbihari Dave fulfills the conditions for his appointment asan Independent Director as specified in the Act and the Listing Agreement. Mr. Deepak KunjbihariDave is independent of the management.

Brief resume of Mr. Deepak Kunjbihari Dave, nature of his expertise in specific functional areas andnames of companies in which he holds directorships and memberships / chairmanships of BoardCommittees, shareholding and relationships between directors inter-se as stipulated under Clause 49of the Listing Agreement with the Stock Exchanges, are provided in the Corporate Governance Reportforming part of the Annual Report.

Keeping in view his vast expertise and knowledge, it will be in the interest of the Company thatMr. Deepak Kunjbihari Dave is appointed as an Independent Director.

Copy of the draft letter for appointment of Mr. Deepak Kunjbihari Dave as an Independent Directorsetting out the terms and conditions would be available for inspection without any fee by the membersat the Registered Office of the Company during normal business hours on any working day, excludingSaturday.

This Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement withthe Stock Exchanges.

The Board commends the Ordinary Resolution set out at Item No. 7 of the Notice for approval by theshareholders.

Except Mr. Deepak Kunjbihari Dave, being an appointee, none of the other Directors / Key ManagerialPersonnel of the Company and their relatives are, in any way, concerned or interested, financially orotherwise, in the resolution set out at Item No. 7 of the Notice.

Item No. 8

The Board of Directors of the Company appointed, pursuant to the provisions of Section 161(1) of theAct and rules made thereunder and the Articles of Association of the Company, Mr. Asamanja Deb asan Additional Director of the Company with effect from February 14, 2014.

In terms of the provisions of Section 161(1) of the Act, Mr. Asamanja Deb would hold office upto thedate of the ensuing Annual General Meeting.

The Company has received a notice in writing from a member along with the deposit of requisiteamount under Section 160 of the Act proposing the candidature of Mr. Asamanja Deb for the office ofDirector of the Company.

Mr. Asamanja Deb is not disqualified from being appointed as a Director in terms of Section 164 of theAct and has given his consent to act as a Director.

As per the said Section 149, an independent director can hold office for a term up to 5 (five) consecutiveyears on the Board of a company and he shall not be included in the total number of directors forretirement by rotation.

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The Company has received a declaration from Mr. Asamanja Deb that he meets with the criteria ofindependence as prescribed both under sub-section (6) of Section 149 of the Act and under Clause 49of the Listing Agreement. Mr. Asamanja Deb possesses appropriate skills, experience and knowledge;inter alia, in the field of audit, accounts and finance.

In the opinion of the Board, Mr. Asamanja Deb fulfills the conditions for his appointment as anIndependent Director as specified in the Act and the Listing Agreement. Mr. Asamanja Deb is independentof the management.

Brief resume of Mr. Asamanja Deb, nature of his expertise in specific functional areas and names ofcompanies in which he holds directorships and memberships / chairmanships of Board Committees,shareholding and relationships between directors inter-se as stipulated under Clause 49 of the ListingAgreement with the Stock Exchanges, are provided in the Corporate Governance Report forming partof the Annual Report.

Keeping in view his vast expertise and knowledge, it will be in the interest of the Company thatMr. Asamanja Deb is appointed as an Independent Director.

Copy of the draft letter for appointment of Mr. Asamanja Deb as an Independent Director setting outthe terms and conditions would be available for inspection without any fee by the members at theRegistered Office of the Company during normal business hours on any working day, excluding Saturday.

This Statement may also be regarded as a disclosure under Clause 49 of the Listing Agreement withthe Stock Exchanges.

The Board commends the Ordinary Resolution set out at Item No. 8 of the Notice for approval by theshareholders.

Except Mr. Asamanja Deb, an appointee, none of the other Directors/Key Managerial Personnel of theCompany / their relatives are, in any way, concerned or interested, financially or otherwise, in theresolution set out at Item No. 8 of the Notice.


Place: Kanpur Anchal GuptaDate : 28th August, 2014 Company Secretary

11



Registered Office: 19, Rollant Complex, 37/17, The Mall, Kanpur - 208001, Uttar Pradesh.Corporate Office: R. No. 10, Ground Floor, Rajsheela Premises Co. Op. Society Ltd, Building No. 597, J.S.S. Road,

Mumbai-400002, Maharashtra, Ph: 0512-3012032 Email: [email protected] Website: www.kailfin.com

Name : Serial No.:

Address : Share Holding :

Name(s) of joint Holder(s), if any :

Folio/DP ID & Client ID No. :I/We hereby record my/our presence at the 29th Annual General Meeting held on Tuesday, September 23, 2014 at 11:00 a.m. at MEHFILRESTAURANT, 16/12, CIVIL LANES, NEAR I G POLICE RESIDENCE, KANPUR-208001, UTTAR PRADESH.

……………………………………………………………… ……………………………………………………….Name of Proxy (in BLOCK LETTERS) Signature of Shareholder/Proxy PresentPlease cut here and bring the Attendance Slip duly signed, to the meeting and hand it over at the entrance. Duplicate slips will not be issued at the venueof the Meeting.

ELECTRONIC VOTING PARTICULARSEVSN (E-voting Sequence Number) User ID PAN/Default PAN

As per point No. 16(A) of e-voting instructions

Please refer to the AGM Notice for e-voting instruction


Registered Office: 19, Rollant Complex, 37/17, The Mall, Kanpur - 208001, Uttar Pradesh.Corporate Office: R. No. 10, Ground Floor, Rajsheela Premises Co. Op. Society Ltd, Building No. 597, J.S.S. Road,

Mumbai-400002, Maharashtra, Ph: 0512-3012032 Email: [email protected] Website: www.kailfin.com29TH ANNUAL GENERAL MEETING ON TUESDAY, SEPTEMBER 23, 2014 AT 11:00 A.M.

Name : .......................................................................................................Address : .......................................................................................................................................................................................................................I/We, being the member(s), holding…………………………. shares of Kailash Auto Finance Limited hereby appoint :(1) Name ................................................................................... Address ..........................................................................................................................

E-mail Id .............................................................................. Signature .......................................................................................... or failing him/her(2) Name ................................................................................... Address ..........................................................................................................................

E-mail Id .............................................................................. Signature .......................................................................................... or failing him/her(3) Name ................................................................................... Address ..........................................................................................................................

E-mail Id .............................................................................. Signature .......................................................................................... ...........................as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 29th Annual General Meeting of the Company, to be heldon Tuesday, September 23, 2014 At 11:00 A.M. at MEHFIL RESTAURANT, 16/12, CIVIL LANES, NEAR I G POLICE RESIDENCE, KANPUR-208001, UTTAR PRADESH and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution No. Resolutions Optional *For Against Abstain

Ordinary Business1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31st

March, 2014, the Statement of Profit and Loss for the year ended on that date and thereport of the Auditors & Directors' thereon.

2. To appoint a Director in place of Mr. Babalu Prasad Keshari, who retires by rotation atthis Annual General Meeting and, being eligible, offers himself for re-appointment.

3. Appointment of Mr. Anil Agarwal, Chartered Accountants, as the Statutory Auditors ofthe Company and authorise Board of Directors to fix their remuneration.

Special Business4. Remuneration of Mr. Babalu Prasad Keshari as a Managing Director of the Company.5. Amendment in Articles of Association.6. Appointment of Mr. Dipan Patel Jesingbhai as an Independent Director of the Company.7. Appointment of Mr. Deepak Kunjbihari Dave as an Independent Director of the Company.8. Appointment of Mr. Asamanja Deb as an Independent Director of the Company.

Signed this …………………………………………….day of …………………………………….2014

Member’s Folio /DP ID & Client ID No…………………………………… Signature of Shareholder (s)…………………...………....................

Signature of Proxy holder(s)…………………………………………………………………………………………………………………...................Note : 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48

hours before the commencement of the Meeting.2. For the Resolutions, Explanatory Statement and Notes, please refer to the Notice of the 29th Annual General Meeting.*3. It is optional to put a ‘X’ in the appropriate column against the Resolutions indicated to the Box. If you leave the ‘For’ or ‘Against’ column blank

against any or all ‘Resolution’ your proxy will be entitled to vote in the manner as he/she thinks appropriate.

ATTENDANCE SLIP

PROXY FORM-MGT.11

AffixRevenue

Stamp

�

�

KAILASH KAILASH KAILASH KAILASH KAILASH AUTO FINANCE LAUTO FINANCE LAUTO FINANCE LAUTO FINANCE LAUTO FINANCE LTDTDTDTDTD

KAILASH KAILASH KAILASH KAILASH KAILASH AUTO FINANCE LIMITEDAUTO FINANCE LIMITEDAUTO FINANCE LIMITEDAUTO FINANCE LIMITEDAUTO FINANCE LIMITED

ANNUALANNUALANNUALANNUALANNUAL REPORT REPORT REPORT REPORT REPORT2013-142013-142013-142013-142013-14

SQS

S


BOARD OF DIRECTORSMr. Babalu Prasad KeshariMr. Asamanja DebMr. Dipan Patel JesingbhaiMr. Kailash Chand GuptaMr. Deepak Kunjbihari Dave

COMPANY SECRETARYMs. Anchal Gupta

AUDITORSMr. Anil AgrawalChartered Accountants342 Marahtal, Karamchand ChowkJabalpur - 482002, Madhya Pradesh

BANKERSAxis Bank

REGISTERED OFFICE19, Rollant Complex, 37/17, The MallKanpur - 208001, Uttar Pradesh

CORPORATE OFFICER. No. 10, Ground FloorRajsheela Premises Co. Op. Society Ltd.Building No. 597, J. S. S. RoadMumbai-400002, MaharashtraTel : 022 - 22057729

Website: www.kailfin.comEmail: [email protected]

Contents Page No.

Directors’ Report .............................................................................................................................. 1

Corporate Governance Report ........................................................................................................ 4

Management Discussion & Analysis Report .............................................................................. 16

Auditors’ Report ............................................................................................................................. 18

Balance Sheet .............................................................................................................................. 24

Statement of Profit & Loss ............................................................................................................ 25

Cash Flow Statement .................................................................................................................... 26

Notes To The Accounts ................................................................................................................. 27

29TH ANNUAL GENERAL MEETING

DATE & TIME

Tuesday, 23rd September 2014, at 11:00 A.M.

VENUEMehfil Restaurant, Kanpur16/12 Civil LinesNear I G Police ResidenceKanpur - 208001

BOOK CLOSURE18th September, 2014 to 23rd September, 2014(Both days inclusive)

REGISTRAR & SHARE TRANSFER AGENTSM/s. Maheshwari Datamatics Pvt. Ltd.6, Mangoe Lane, 2nd Floor,Kolkata - 700001, West BengalPh: 033-22435809/5029Fax: 033-22484787

Email: [email protected], [email protected]

COMPANY INFORMATION


1

DIRECTORS’ REPORT

ToThe Members of Kailash Auto Finance LimitedYour Directors have pleasure in presenting the Twenty Ninth Annual Report together with theAudited Accounts of the Company for the year ended 31st March, 2014. The financial Results of theCompany are summarized below:

FINANCIAL RESULTS:

(Rs in Lakhs)PARTICULARS Year ended Year ended

2013-2014 2012-2013Total Income 2574. 90 34. 17Total Expenditure 2442. 60 32. 75Profit before Taxation 132. 30 1. 42Tax Expense 37. 30 0. 28Provision for Standard Assets 11. 47 —-Profit for the Period 83. 53 1. 14

REVIEW OF OPERATIONS

During the year, the India Economy remained disturbed due to global distress and continuousdomestic disturbance. The major obstacles were inflation, high fiscal deficit, lack of liquidity, policyuncertainty, and currency volatility.

The Company will continue to be responsive to changes in market dynamics and consumer behaviorand other key factors influencing the business, and will formulate its strategies accordingly.

DIVIDEND

With a view to conserve resources for future needs and strengthening the financial position of thecompany, the Directors regret their inability to propose any dividend for the year under review.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and as per the Articles of Associationof the Company Mr. Babalu Prasad Keshari (DIN: 06695960), Director, will retire by rotation at theensuing Annual General Meeting and being eligible, offers himself for reappointment.

As per provisions of Sections 149, 152 and any other applicable provisions, if any, of the CompaniesAct, 2013 and the rules made there under read with Schedule IV of the Companies Act, 2013,Mr. Dipan Patel Jesingbhai (DIN: 05359769), Mr. Deepak Kunjbihari Dave (DIN: 06776698) andMr. Asamanja Deb (DIN: 02294879), all existing Independent directors of the Company, have beenappointed as Independent Directors of the Company and shall hold office from the date of this AnnualGeneral Meeting till 31st March, 2019. They shall not, henceforth, be liable to retire by rotation.

Brief resume of the Directors seeking appointment, reappointment as stipulated under Clause 49 ofthe Listing Agreement, are provided in the Report on Corporate Governance forming part of theAnnual Report.

Based on the confirmations received, none of the Directors of the Company are disqualified forappointment under Section 274(1)(g) of the Companies Act, 1956.

COMMITTEES OF DIRECTORS

The Board of Directors have aligned the existing Committees of the Board with the provisions of CompaniesAct, 2013(Act). The existing Shareholder’s / Investor’s Grievance and Share Transfer Committee hasbeen renamed as “Stakeholders Relationship and Shareholders Grievance Committee”.


The scope of Audit Committee has also been widened so as to bring it in accordance with therequirement of the Section 177 of the Companies Act, 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect tothe Directors’ Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March, 2014,the applicable accounting standards had been followed and no material departures havebeen made from the same;

(ii) That the Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of the profit of theCompany for the year under review;

(iii) That Directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(iv) That Directors had prepared the annual accounts for the financial year ended 31st March,2014, on a ‘going concern’ basis.

CORPORATE GOVERNANCE

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement formspart of the Annual Report.

Certificate from the Statutory Auditors Mr. Anil Agarwal, Chartered Accountants regarding compliancewith the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreementwith Stock Exchanges is annexed to the report.

Your Company has taken adequate steps for strict compliance with the Corporate Governanceguidelines, as amended from time to time.

The Company has established a vigil mechanism as required under Section 177 of the CompaniesAct, 2013 and has framed the “Whistle Blower Policy” for implementation thereof.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review, as stipulated under Clause49 of the Listing Agreement with the Stock Exchange, is presented in a separate section forming partof this Annual Report.

AUDITORS

The Statutory Auditors of the Company, Mr. Anil Agarwal, Chartered Accountants will retire at theensuing AGM. As recommended by the Audit Committee, the Board has proposed the re-appointmentof Mr. Anil Agarwal, Chartered Accountants as statutory auditors for financial year 2014-15 on suchremuneration as decided by the Board of Directors.

The Company has received a certificate from the proposed Auditors to the effect that their appointment,if made, would be in accordance with all the conditions prescribed under the Companies Act, 2013and the Companies (Audit and Auditors) Rules, 2014. In respect of observations made by the Auditorsin their Report, your Directors wish to state that the respective notes to the accounts are self-explanatoryand do not call for any further comments.

PUBLIC DEPOSIT

The Company has not accepted any deposits from the public during the year pursuant to the provisionsof Section 58A of the Companies Act, 1956.

2


STOCK EXCHANGE

The Company’s Securities are listed at the BSE Limited. We have paid the annual listing fee andthere are no arrears.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO

The particulars relating to conservation of energy and technology absorption are not applicable to theCompany. However, efforts are being made to conserve and optimize the use of energy, whereverpossible.

During the year under review, your Company has neither earned nor spent any foreign exchange.

PARTICULARS OF EMPLOYEES

There was no employee in respect of whom information is required to be given pursuant to theSection 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees)Rules, 1975 as amended up-to-date.

HUMAN RESOURCES MANAGEMENT

The Company continues to lay emphasis on people, its most valuable resource. In an increasinglycompetitive market for human resources, it seriously focuses on attracting and retaining the righttalent. It provides equal opportunity to employees to deliver results.

NON-DEPOSIT TAKING NON-BANKING FINANCIAL COMPANY (NBFC)

The Company has been registered as a Non-Banking Financial Institution on 12th January, 2009 interms of the provisions of Non-Banking Financial (Non-Deposit Accepting or Holding) CompaniesPrudential Norms (Reserve Bank) Direction, 2007; your Company is categorized as a Non-deposittaking Non-Banking Financial Company.

COMPANY SECRETARY

The Company Secretary Ms. Archana Soni resigned on 27th March, 2014. The Company is in processof recruiting and appointing a wholetime Company Secretary.

APPRECIATION

Your Directors place on record their deep appreciation for the continued, support and co-operationextended to the Company by the Banks, Government departments and other agencies.

Your Directors thanks our esteemed shareholders for your continued support.

Your Directors place on record their appreciation of the dedication and commitment of your Company’semployees and look forward to their support in the future as well.

For and on behalf of the BoardPlace: MumbaiDate: May 30, 2014 (Babalu Prasad Keshari)

Managing Director

3


CORPORATE GOVERNANCE REPORT

1. The Company’s Philosophy on Code of Corporate Governance

In accordance with Clause 49 of the Listing Agreement with BSE Limited (BSE) and some of thebest practices followed internationally on Corporate Governance, the report containing the detailsof corporate governance systems and processes at Kailash Auto Finance Limited (KAFL) is asfollows:

At KAFL, Corporate Governance is all about maintaining a valuable relationship and trust with allstakeholders. At KAFL, we consider stakeholders as partners in our success, and we remaincommitted to maximizing stakeholder value, be it shareholders, employees, suppliers, customers,investors, communities, or policy makers. This approach to value creation emanates from ourbelief that sound governance system, based on relationship and trust, is integral to creatingenduring value for all. We have a defined policy framework for ethical conduct of business. Webelieve that any business conduct can be ethical only when it rests on the nine core values ofHonesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship andCourage.

The essence of Corporate Governance lies in promoting and maintaining integrity, transparencyand accountability in the management’s higher echelons. The demands of corporate governancerequire professionals to raise their competence and capability levels to meet the expectations inmanaging the enterprise and its resources effectively with the highest standards of ethics.

2. Board of Directors

The Board of Directors as on the date consist of Five Directors out of whom 4 (Four) are NonExecutive Directors. The Chairman of the Company is Executive Director. The composition ofBoard is in conformity with Clause 49 of the Listing Agreement entered into with the StockExchanges. The details of the Board of Directors as on 31. 03. 2014 are as under:

Name Category

Mr. Kailash Chand Gupta Non Executive Director

Mr. Dipan Patel Jesingbhai Non-Executive Independent Director

Mr. Asamanja Deb Non-Executive Independent Director

Mr. Deepak Kunjbihari Dave Non-Executive Independent Director

Ms. Kavita Patel Non-Executive Independent Director

Mr. Gopal Bhutra Executive Director

Mr. Babalu Prasad Keshari Chairman & Managing Director

Notes: -Mr. Gopal Bhutra resigned w.e.f. 23rd September, 2013.Mr. Babalu Prasad Keshari was appointed in the Board w.e.f. 23rd September, 2013.Mr. Deepak Kunjbihari Dave was appointed in the Board w.e.f. 14th February, 2014.Mr. Asamanja Deb was appointed in the Board w.e.f. 14th February, 2014.Ms. Kavita Patel resigned w.e.f. 14th February, 2014.

Number of other companies or committees in which he is a director / chairman.

4


The following table gives the number of outside directorships and the committee positions heldby each of the Directors as on 31. 03. 2014.

Name No of outside Directorship(s) No. of Board Committeeheld in Public Limited and position held in otherPrivate Limited Companies Public Limited Companies

Private Public Chairman Member

Mr. Kailash Chand Gupta 8 3 - -

Mr. Dipan Patel Jesingbhai 1 1 - 2

Mr. Asamanja Deb - 1 2 -

Mr. Deepak Kunjbihari Dave - - - -

Ms. Kavita Patel 1 1 - -

Mr. Gopal Bhutra - 1 - -

Mr. Babalu Prasad Keshari - - - -

Notes: -Mr. Gopal Bhutra resigned w.e.f. 23rd September, 2013.Mr. Babalu Prasad Keshari was appointed in the Board w.e.f. 23rd September, 2013.Mr. Deepak Kunjbihari Dave was appointed in the Board w.e.f. 14th February, 2014.Mr. Asamanja Deb was appointed in the Board w.e.f. 14th February, 2014.Ms. Kavita Patel resigned w.e.f. 14th February, 2014

3. Board Meetings

The Board held 11 (Eleven) Meetings during the year 2013-2014 on 29.04.2013, 30.05.2013,10.06.2013, 14.08.2013, 21.08.2013, 23.09.2013, 14.11.2013, 20.01.2014, 23.01.2014,14.02.2014 and 27.03.2014.

Attendance of Directors at Board Meetings and at the Annual General Meeting

Name of the Directors No. of Board Whether AttendedMeetings Attended the Last AGM

Mr. Kailash Chand Gupta 3 No

Mr. Dipan Patel Jesingbhai 11 Yes

Mr. Asamanja Deb 1 No

Mr. Deepak Kunjbihari Dave 1 No

Ms. Kavita Patel 10 Yes

Mr. Gopal Bhutra 6 Yes

Mr. Babalu Prasad Keshari 5 Yes

Notes: -Mr. Gopal Bhutra resigned w.e.f. 23rd September, 2013.Mr. Babalu Prasad Keshari was appointed in the Board w.e.f. 23rd September, 2013.Mr. Deepak Kunjbihari Dave was appointed in the Board w.e.f. 14th February, 2014.Mr. Asamanja Deb was appointed in the Board w.e.f. 14th February, 2014.Ms. Kavita Patel resigned w.e.f. 14th February, 2014

The Board ensures compliance of all laws applicable to the Company and takes steps to rectifynon-compliances, if any.

5


4. Committees of the Board

(a) Audit Committee

Composition and Attendance

During the year 2013-2014, 5 (Five) Meetings of the Audit Committee were held on 30.05.2013,14.08.2013, 14.11.2013, 20.01.2014 and 27.03.2014.

Name of the Members Category Position No. of MeetingsAttended

Mr. Babalu Prasad Keshari Executive Managing Director Member 3

Mr. Dipan Patel Jesingbhai Non Executive Independent Director Chairman 5

Mr. Asamanja Deb Non Executive Independent Director Member 1

Ms. Kavita Patel Non Executive Independent Director Member 4

Mr. Gopal Bhutra Executive Director Member 2

The Members of the Audit Committee have requisite knowledge in the field of Finance,Accounts and Management. Minutes of each Meeting of Audit Committee are placed anddiscussed before the Board of Directors.

The representative of Statutory Auditors attended the meetings of Audit Committee.

Notes: -

Mr. Gopal Bhutra resigned w.e.f. 23rd September, 2013.

Mr. Babalu Prasad Keshari was appointed in the Board w.e.f. 23rd September, 2013.

Mr. Asamanja Deb was appointed in the Board w.e.f. 14th February, 2014.

Ms. Kavita Patel resigned w.e.f. 14th February, 2014.

The Audit Committee of the Board, inter alia, provides reassurance to the Board on the existenceof an effective internal control environment that ensures :

• Efficiency and effectiveness of operations;

• Safeguarding of assets and adequacy of provision for all liabilities;

• Reliability of financial and other management information and adequacy of disclosures;

• Compliance with all relevant statutes.

Powers of the Audit Committee:

• Investigate any activity within its terms of reference.

• To seek any information it requires from any employee.

• Obtain legal or other independent professional advice.

• To secure the attendance of outsiders with relevant experience and expertise, when considerednecessary.

Role of the Audit Committee:

(a) Oversight of the company’s financial reporting process and the disclosure of its financialinformation to ensure that the financial is correct, sufficient and credible;

(b) Recommending to the Board, the appointment, re-appointment and, if required, thereplacement or removal of the statutory auditor and the fixation of audit fees.

(c) Reviewing, with the management, the financial statements before submission to the Board,focusing primarily on:

6


a. Matters required to be included in the Director’s Responsibility Statement to be includedin the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956

b. Changes, if any, in accounting policies and practices and reasons for the same

c. Major accounting entries involving estimates based on exercise of jugdement bymanagement

d. Significant adjustments made in the financial statements arising out of audit findings

e. Compliance with listing and other legal requirements relating to financial statements

f. Disclosure of any related party transactions

g. Qualifications in the draft audit report.

(d) Reviewing, with the management, the quarterly financial statements before submission onthe board for approval

(e) Reviewing, with the management, the statement of uses / application of funds raised throughan issue (public issue, rights issue, preferential issue, etc. ), the statement of funds utilizedfor purposes other than those stated in the offer document/prospectus/notice and the reportsubmitted by the monitoring agency monitoring the utilisation of proceeds of a public orrights issue, and making appropriate recommendations to the Board to take up steps in thismatter.

(f) Reviewing, with the management, performance of statutory and internal auditors, adequacyof the internal control systems.

(g) Reviewing the adequacy of internal audit function, if any, including the structure of the internalaudit department, staffing and seniority of the official heading the department, reportingstructure coverage and frequency of internal audit.

(h) Discussion with internal auditors any significant findings and follow up there on.

(i) Reviewing the findings of any internal investigations by the internal auditors into matterswhere there is suspected fraud or irregularity or a failure of internal control systems of amaterial nature and reporting the matter to the board.

(j) Discussion with statutory auditors before the audit commences, about the nature and scopeof audit as well as post-audit discussion to ascertain any area of concern.

(k) To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non payment of declared dividends) and creditors.

(l) To review the functioning of the Whistle Blower mechanism.

(m) Approval of appointment of CFO (i. e., the whole-time Finance Director or any other personheading the finance function or discharging that function) after assessing the qualifications,experience & background, etc. of the candidate.

(n) Carrying out any other functions as mentioned in the terms of reference of the Audit Committee.

(b) Remuneration Committee

The Company has not formed a remuneration committee which is a part of non-mandatorycode. The remuneration policy of the Company is directed towards rewarding performance,based on review of achievements on a periodic basis. The remuneration policy is inconsonance with the existing industry practices and the requirements of law. The Companydoes not have any stock option plan or performance linked incentives for its directors. TheCompany has not paid any remuneration to any of its directors.

7


5. Stakeholders Relationship and Shareholders Grievance Committee

The ‘Stakeholders Relationship Committee’ (SR Committee) was constituted by the Boardconsequent to the dissolution of the ‘Shareholders’/Investors’ ‘Grievance Committee’ (SIGCommittee). The SR Committee is primarily responsible to review all matters connected with theCompany’s transfer of securities and redressal of shareholders’/investors’/security holders’compalints. The Committee also monitors the implimentation and compliance with the Company’sCode of Conduct for prohibition of Insider Trading.

The SR Committee’s composition and the terms of reference meet with the requirements ofclause 49 of the Lising Agreement and provisions of the Companies Act, 2013.

(a) Terms of Reference of the Committee, inter alia, includes the following:

• Oversee and review all matters connected with the transfer of the Company’s securities

• Approve issue of the Company’s duplicate share/debenture certificates

• Monitor redressal of investors’/shareholders’/security holders’ grievances

• Oversee the performance of the Company’s Registrars and Transfer Agents

• Recommend methods to upgrade the standard of services to investors

• Monitor implimentation of Company’s Code of Conduct for Prohibition of Insider Trading

• Carry out any other function as is referred by the Board from time to time or enforced byany statutory notification/amendment or modificatin as may be applicable.

(b) Compliance Officer

Ms. Archana Soni, Company Secretary was compliance officer of the Company. Since sheresigned on 27th March, 2014 the Board has designated Mr. Babalu Prasad Keshari as theCompliance Officer of the Company till the Board appoint a new wholetime Company Secretary.

(c) Stakeholders Relationship and Shareholder’s Grievance Committee:

Composition of Stakeholders Relationship and Shareholder’s Grievance CommitteeName of the Members Category Position

Mr. Babalu Prasad Keshari Executive Managing Director Member

Mr. Dipan Patel Jesingbhai Non Executive Independent Director Chairman

Mr. Asamanja Deb Non Executive Independent Director Member

There are no outstanding complaints and no shares were pending for transfer as on 31st March, 2014.

6. (a) General Body Meetings:

i. The Last three Annual General Meetings were held as per the details given below:

YEAR DATE TIME VENUE

2012-2013 23. 09. 2013 11. 00 A. M 19, Rollant Complex,37/17, The Mall, Kanpur- 208001, (U. P. )

2011-2012 29. 09. 2012 04. 30 P. M. 19, Rollant Complex,37/17, The Mall, Kanpur- 208001, (U. P. ),

2010-2011 30. 09. 2011 03. 00 P. M 19, Rollant Complex,37/17, The Mall, Kanpur- 208001, (U. P. )

ii. There was no Extra Ordinary General Meeting held during the financial year 2013-2014

8


(b) Postal Ballot

During the year ended 31st March, 2014, no resolution was passed by the Company’sshareholders requiring voting by postal ballot. At the ensuing Annual General Meeting also,there is no resolution proposed to be passed through postal ballot.

7. Disclosures

(a) Disclosure on materially significant related party transactions, pecuniary or businessrelationship with the Company

There have been no materially significant related party transactions that may have potentialconflict with the interests of the Company or its associates, with any of its directors or theirrelatives during the year 2013-14.

(b) Details of non-compliance by the Company, penalties, and strictures imposed on theCompany by the Stock Exchange(s) or SEBI or any Statutory Authority on any mattersrelated to Capital Market:

No penalties or strictures have been imposed on the Company by the Stock Exchanges orSEBI or any other statutory authority, on any matter related to capital markets during the last3 years.

(c) Whistle Blower Policy:

The Company has formulated a policy known as ‘Whistle Blower Policy’ to allow and encourageour employees to bring to the Management’s Notice (Audit Committee) directly, withoutnecessarily informing their superiors about suspected unethical behavior, malpractice,wrongful conduct, fraud, violation of the Company’s policies including code of conduct, violationof law or questionable accounting or auditing matters by any employee/director in theCompany without fear of reprisal.

The Company further undertakes that it has not denied any personnel access to the AuditCommittee of the Company in respect of matters involving alleged misconduct/malpractice/unethical behavior and that it has provided protection to ‘Whistle Blowers’ from unfairtermination and other unfair or prejudicial employment practices.

(d) Details of compliance with the mandatory requirements and adoption of non-mandatoryrequirements of Clause 49:

The Company has complied with the mandatory requirements and is in process of adoptingnon-mandatory requirements of Clause 49, wherever feasible.

(e) Risk Management:

The Executive Management controls risk through means of a properly defined framework.

(f) Code of Conduct:

The Board of Directors of your Company has laid down the Code of Conduct for all BoardMembers and Senior Management of the Company, which delineates the principles governingthe conduct of employees including Directors, with all the stakeholders of the Company. Thecode covers transparency, legal compliances, concern of occupational health, safety andenvironment, a gender friendly work place and philosophy of leading by personal examples.

All Board Members and Senior Management of your Company ensure the compliances withthese principles. The Board is responsible for ensuring that these principles arecommunicated to, understood and observed by all employees. Compliance of the code issubject to the review by the Board supported by the Audit Committee of the Board.

9


(g) CEO/CFO Certification

A certificate from the Managing Director on the Financial Statements of the Company wasplaced before the Board.

(h) Meaning of Communication

I. Quarterly results are published in leading newspapers like The Financial Express andJansatta

II. The Company has its own website www. kailfin. com and all vital information relating tothe company and its performance including financial results are posted on the website.

III. Management Discussion and Analysis Report forms part of the Director’s Report.

8. General Shareholder Information

a) Date, Time and Venue of Annual General Meeting:

The Company will hold its Twenty Ninth Annual General Meeting on Tuesday, 23rd day ofSeptember, 2014 at 11:00 A. M. at Mehfil Restaurant, 16/12, Civil Lanes, Near I G PoliceResidence, Kanpur-208001, Uttar Pradesh.

b) (b) Financial Calendar (tentative and subject to change)

The Company expects to announce the quarterly results for the year 2014-2015, as per thefollowing schedule:

Financial Reporting for the Within 45 days from the end ofquarter ending June 30, 2014 the quarter ending June 30, 2014.

Financial Reporting for the Within 45 days from the end ofquarter ending September 30, 2014 the quarter ending September 30, 2014.

Financial Reporting for the Within 45 days from the end ofquarter ending December 31, 2014 the quarter ending December 31, 2014.

Financial Reporting for the Within 60 days from the end ofquarter ending March 31, 2015 the quarter ending March 31, 2015.

c) Date of Book Closure

The Company’s Register of Members and Share Transfer Book will remain closed fromThursday, 18th day of September, 2014 to Tuesday, 23rd day of September, 2014 (both daysinclusive).

d) Dividend Payment Date

The Board of Directors has not recommended any dividend for the financial year 2013-2014.

e) Company Registration Details

The Company is registered in the State of Uttar Pradesh, India. The Corporate IdentificationNo. (CIN) al lotted to the Company by the Ministry of Corporate Affairs (MCA) isCIN: L65921UP1984PLC006829

f) Listing on Stock ExchangesThe Company’s Shares are listed on BSE Limited (BSE). The requisite listing fees for2014-15 has been paid in full to BSE.

g) Stock CodeBSE: 511357 ISIN:INE410O01022

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h) Stock Market DataMarket Price Data- Monthly high/low of Company’s Equity shares during the financial year2013-2014 on the BSE along with performance in comparison to BSE Sensex is given as under:

MONTH KAILASH AUTO FINANCE LIMITED BSE Sensexon BSE

High (Rs.) Low (Rs.) High LowApril, 2013 22. 75 22. 75 19622.68 18144.22May, 2013 44. 55 23. 85 20443.62 19451.26June, 2013 36. 25 36. 25 19860.19 18467.16July, 2013 38. 85 35. 05 20351.06 19126.82August, 2013 39. 00 30. 10 19569.20 17448.71September, 2013 39. 10 37. 75 20739.69 18166.17October, 2013 43. 40 34. 05 21205.44 19264.72November, 2013 48. 00 34. 05 21321.53 20137.67December, 2013 45. 80 33. 50 21483.74 20568.70January, 2014 44. 90 29. 00 21409.66 20343.78February, 2014 40. 00 34. 40 21140.51 19963.12

March, 2014 47. 80 36. 30 22467.21 20920.98

i) Registrar and Transfer Agents for shares held in Physical as well as Depository mode:M/s. Maheshwari Datamatics Pvt Ltd6, Mangoe Lane, 2nd FloorKolkata - 700001West BengalPh: 91-33- 22435029/5809Fax : 91-33- 22484787Email: [email protected], [email protected]

j) Share Transfer SystemThe Board has delegated the power of share transfer to Stakeholders Relationship andShareholders’ Grievance Committee. The Committee holds meeting at regular intervals toconsider all matters concerning transfer and transmission of Shares.

k) Distribution and Shareholding PatternDistribution of shareholding of the Company as on March 31, 2014:

Range of No of % of No. of Shares % toTotalEquity Shares Shareholders total holdersUp to 500 4044 59. 0537 696365 0. 1186

501 - 1000 248 03. 6215 198978 0. 0339

1001 - 2000 84 01. 2266 104100 0. 0177

2001 - 3000 10 00. 1460 26706 0. 0045

3001 - 4000 5 00. 0730 17364 0. 0030

4001 - 5000 12 00. 1752 59800 0. 0102

5001 - 10000 100 01. 4603 883963 0. 1506

10001 - Above 2345 34. 2436 585072807 99. 6615

Total 6848 100. 0000 587060083 100. 0000

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l) Shareholding Pattern of the Company as on March 31, 2014:Category No. of Percentage

Shares held of HoldingA Promoter and Promoter Group

1. Indian Promoters (Bodies Corporate) 600000 0. 102. Foreign Promoters - -Sub Total 600000 0. 10

B Public Shareholding1. Institutional Investors

- Mutual Funds & UTI- Banks, Financial Institutions, Insurance Companies- Central Government/State Government(s)- Foreign Institutional Investors 1975777 0.34

2. Non-Institutional Investors- Bodies Corporate 289993552 49.40- Individuals/ HUFs 291618828 49.67- Any Others 2871926 0.49

Sub Total 586460083 99. 90Total 587060083 100. 00

m) Dematerialization of SecuritiesThe Company’s Shares are available for trading in the Depository System at Central DepositoryServices (India) Limited (CDSL) and National Depository Services Limited (NSDL). TheInternational Security Identification Number (ISIN) allotted to KAILASH AUTO FINANCE LIMITEDis INE410O01022. The market lot is one share. As on 31st March 2014 99. 82% of the totalequity share capital was held in dematerialized form.

n) PAN RequirementSEBI had vide its circulation no. MRD/DOP/Cir - 05/2009 dated 20.05.2009 made the requirementof PAN Card of all Transferee(s) compulsory in case of all Physical Transfer of Shares.

o) Outstanding GDRs/ADRs/Warrants or any other Convertible InstrumentCompany has not issued any GDRs/ ADRs/ Warrants or any other convertible instruments orany issue (public issue, right issue, preferential issue etc.) which likely to have impact onEquity Share Capital of the Company.

p) Plant LocationThe Company is a Non Banking Finance Company, therefore, it does not have anymanufacturing plants

q) Address for CorrespondenceFor any assistance, queries, regarding transfer or transmission of shares, dematerialization,non receipt of dividend on shares, non receipt of share application money, non credit ofshares in demat account and any other queries relating to the shares of the Company andAnnual Report, the investors may please write to the following :

KAILASH AUTO FINANCE LIMITED(i) Registered Office:

19, Rollant Complex,37/17, The Mall,Kanpur - 208001, Uttar PradeshEmail: [email protected]

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(ii) Corporate OfficeR. No. 10, Ground Floor, RajsheelaPremisesCo. Op. Society Ltd,Building No. 597, J. S. S. Road,Mumbai-400002, Maharashtra

(iii) M/s. Maheshwari Datamatics Pvt Ltd6, Mangoe Lane, 2nd Floor,Kolkata - 700001. West BengalPh -91-33- 22435029/5809Fax - 91-33- 22484787Email:- [email protected], [email protected]

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CHIEF EXECUTIVE OFFICER (CEO) CERTIFICATION

I, Babalu Prasad Keshari, Managing Director of Kailash Auto Finance Ltd, to the best of my knowledgeand belief, certify that:

a) I have reviewed financial statements and the cash flow statement for the year ended31st March, 2014 and to the best of my knowledge and belief:

i. These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

ii. These statements together present a true and fair view of the company's affairs and arein compliance with the existing accounting standards, applicable laws and regulations.

b) There are, to the best of my knowledge and belief, no transactions entered into by the companyduring the year which are fraudulent, illegal or violative of the company's code of conduct.

c) I accept responsibility for establishing and maintaining internal controls for financial reportingand that I have evaluated the effectiveness of internal control systems of the companypertaining to financial reporting and I have disclosed to the auditors and the Audit Committee,deficiencies in the design or operation of such internal controls, if any, of which I am awareand the steps I have taken or propose to take to rectify these deficiencies.

d) I have indicated to the auditors and the Audit committee

i. Significant changes in internal control during the year, if any.

ii. Significant changes in accounting policies during the year, if any, have been disclosedin the notes to the financial statements; and

iii. There were no instances of significant fraud of which I have become aware and theinvolvement therein, if any, of the management or an employee having a significantrole in the company's internal control system over financial reporting.

For KAILASH AUTO FINANCE LTD

Place: Mumbai (Babalu Prasad Keshari)

Date: May 30, 2014 Managing Director

COMPLIANCE WITH CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANEGEMENT

Pursuant to the Clause 49 of the Listing Agreement entered into with the stock exchange, we herebydeclare that all the Board members and senior management personnel of the Company have affirmedcompliance with the code of conduct for the year ended March 31, 2014.

For KAILASH AUTO FINANCE LTD

Place: Mumbai (Babalu Prasad Keshari)

Date: May 30, 2014 Managing Director

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AUDITOR’S CERTIFICATION

To,The Shareholders ofKAILASH AUTO FINANCE LIMITED

We have examined the compliance of conditions of Corporate Governance by KAILASH AUTO FINANCELIMITED for the year ended on 31st March, 2014 as stipulated in Clause 49 of the Listing Agreementof the said Company entered into with the Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Ourexamination was limited to procedures and implementation thereof, adopted by the Company forensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor anexpression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, wecertify that the Company has complied with the conditions of Corporate Governance stipulated in theabove mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Companynor the efficiency or effectiveness with which the management has conducted the affairs of theCompany.

For Anil AgrawalChartered Accountants

Anil AgrawalMembership No. 79054

Place: MumbaiDate: May 30, 2014

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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Global Overview

Global economy witnessed another year of subdued growth in 2013. However, from the second halfof 2013, global economic scenario has started to improve and is expected to strengthen further in2014-15. The impulse has come mainly from advanced Economies, although their recoveries remainuneven. The second half of 2013, growth picked up slightly, mainly on account of a rise in Export.

The changing growth dynamics have brought new uncertainties in global economy. Although, Exportsfrom emerging markets to advanced economies accelerated and the growth differential betweenadvanced economies and emerging markets has been narrowing but the Inflation differential hasbeen widening. Thus the resultant risk-return dynamics is likely to favour advanced economies,thereby increasing the vulnerability of the emerging economies.

Domestic Overview

With the narrowing of the Twin Deficits - both Current Account and Fiscal and replenishment ofForeign Exchange Reserves, adjustment of the exchange rate the risks of near-term macro instabilityhave diminished. However, macro-economic adjustment is far from complete, with persistence ofhigher Inflation amidst growth slowdown. Much more efforts in terms of removing structuralimpediments, building business confidence and creating fiscal space to support investments willbe needed to secure growth.

OUTLOOK

The outlook of the Indian economy largely depends on the outcome of the General Elections. A stablegovernment boost business environment, whereas a fractured or an unstable government may blurthe business outlook, hampering the growth prospects of Indian Economy.

INDUSTRY OVERVIEW

Indian stock markets started the year in a cheer note with significant gains in the month of April andmid -May 2013 and remain volatile for major part of the year. Indian Rupee saw one of the steepestdeclines against the USD and other major currencies. INR touched the lowest level of Rs 68 to aUSD. Gold prices plunged to a low of $1180/ounce at LME towards end of June 14.

During the course of the financial year it was feared that foreign institutional investors may pull out ofIndia as liquidity dry up on QE3 tapering. However, after initial sell offs on the news of tapering, theybought significant in Indian markets whereas the DII's continued to book profit. The FII's primarily beton India as Indian stocks was priced cheaper in USD terms on decline in the value of INR. Alsohopes of a strong and stable incumbent government led them to buy Indian equities. Nevertheless,among the emerging market countries, India was better placed on signs of economic recovery asRussia was embroiled with issues related to Ukraine, Brazil was not a place to be on decliningcommodity prices and China showed no convincing signs of recovery.

OPPORTUNITIES AND THREATS

Opportunities:

• Healthy and sustainable economic growth rate with sound macro-economic fundamentals;

• Low penetration of financial services and products in India;

• Favourable demographics like huge middle class, larger younger population with disposableincome and investible surplus, change in attitude from wealth protection to wealth creationand risk taking abilities of the youth, etc.;


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Threats:• Increased competition from local and global players operating in India;• Technology Advancement;• Regulatory changes impacting the landscape of business;• Unfavourable economic condition.

BUSINESS OVERVIEW

The year has been very good for the company. The company has been successful is doing businessof lending money and trading in shares and securities.

We execute transactions with transparency imbibing knowledge keeping our commitment by buildingpartnerships with our clients and that synchronises our work with our core values. Our approach is'object' oriented and therefore, we work with core purpose of providing solutions.

RISK MANAGEMENT

The objective of risk management is to balance the trade off between risk and return and ensureoptimum risk adjusted return on capital. The Risk Management Policies related to Procurement,Debtors, Financing and Investments are in place and properly documented and reviewed continuously.The processes have been laid down to oversee the implementation of the policies and continuousmonitoring of the same.

Our Board level Committees viz. Audit Committee and Risk Management Committee oversee riskmanagement policies and procedures. It reviews the credit and operational risks, reviews policies inrelation to investment strategy and other risks like interest rate risk, compliance risk and liquidity risk.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

In any industry, the processes and internal control systems play a critical role in the health of theCompany. We have an adequate Internal Audit and Control system across our business. Our internalcontrol systems are adequate and provide, among other things, reasonable assurance of recordingtransactions of operations in all material respects and of providing protection against significantmisuse or loss of company assets. We believes in the conduct of its affairs in a fair and transparentmanner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour.

HUMAN RESOURCES

Human resource is one of the most important key to the success of any company. Your Company'sbusiness critically depends on quality of manpower. The HR function of your Company has beenstructured and aligned in line with the business needs and requirements. The Company's businessesare managed by a team of competent and passionate leaders, capable of enhancing your Company'sstanding in the competitive market. The Company's employees have a defining role in significantlyaccelerating its growth and transformation, thereby enhancing its position as one of the largestcorporate houses. The Company has a structured recruitment process; the focus is on recruitingpeople who have the right mindset for working with us, supported by structured training programmesand internal growth opportunities.

CAUTIONARY STATEMENT

Statements in the Management discussion and analysis, describing the Company's objectives, outlook,opportunities and expectations may constitute "Forward Looking Statements" within the meaning ofapplicable laws and regulations. The Actual result may vary materially from those expressed orimplied in the statement. Several factors make a significant difference to the company's operationsincluding the government regulations, taxation and economic scenario affecting demand and supplycondition and other such factors over which the Company does not have any direct control.


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INDEPENDENT AUDITOR’S REPORT

To,The Members ofKAILASH AUTO FINANCE LIMITED

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of ‘KAILASH AUTO FINANCE LIMITED’ (“theCompany”), which comprise the Balance Sheet as at 31st March, 2014, the statement of Profit &Loss Account and the Cash flow Statement for the year ended, and a summary of significant accountingpolicies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fairview of the financial position, financial performance and cash flows of the company in accordancewith the accounting principles generally accepted in India, including the accounting Standards notifiedunder the Companies Act, 1956 read with the General Circular 08/2014 dated 04th April, 2014,issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementationand maintenance of internal control relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement, whether due tofraud or error.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with the standards on Auditing issued by the Institute of CharteredAccountants of India. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatement of the financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal control relevant tothe company’s preparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of Company’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, thefinancial statements give the information required by the Companies Act,1956(“the Act”) in the mannerso required and give a true and fair view in conformity with the accounting principles generallyaccepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;b) In the case of the statement of Profit and Loss , of the profit of the Company for the year ended

on the date; andc) In the case of the Cash Flow statement, of the cash flow for the year ended on that date.


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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor’s Report ) Order, 2003 (“the Order”) issued by the CentralGovernment of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement onthe matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company sofar as appears from our examination of those books.

c) That Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash FlowStatement comply with the Accounting Standards referred to in sub section (3c) of section 211of the Companies, Act 1956 read with the General Circular 08/2014 dated 04th April 2014,issued by the Ministry of Corporate Affairs.

e) On the basis of written representation received from the directors as on March 31, 2014, andtaken on record by the Board of Directors, none of the directors is disqualified as on March31, 2014, from being appointed as a director in terms of section 274 (1)(g) of the CompaniesAct,1956.

For Anil AgarwalChartered Accountants

Anil AgrawalProprietorMembership No: 79054



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ANNEXURE TO INDEPENDENT AUDITORS’ REPORT

ANNEXURE TO THE AUDITORS’ REPORT (REFERRED TO IN OUR REPORT OF EVEN DATE TOTHE MEMBERS OF KAILASH AUTO FINANCE LIMITED AS AT AND FOR THE YEAR ENDED31ST MARCH, 2014)

1 A The company has maintained proper records showing full particulars, including quantitativedetails and situation of fixed assets.

B The fixed assets have been physically verified by the Management during the year and nomaterial discrepancies were identified on such verification.

C There was no substantial disposal of Fixed assets during the year.

2 A The inventories have been physically verified during the year by the management. In ouropinion, the frequency of verification is reasonable.

B In our opinion and according to the information and explanation given to us, the proceduresof physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.

C The Company has maintained proper records of inventories. As explained to us, there wereno material discrepancies noticed on physical verification of inventories as compared to thebook records.

3 A According to the information and explanations given to us, the company has not grantedloans, secured or unsecured to companies firms or other parties covered in the registermaintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the order are not applicable to the company and hence not commented upon.

B According to the information and explanations given to us, the company has not taken loans,secured or unsecured from companies firms or other parties covered in the register maintainedu/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (e) to (g) of theorder are not applicable to the company and hence not commented upon.

4 In our opinion and according to information and explanation given to us, there are adequateinternal control procedures commensurate with the size of the company and nature of itsbusiness with regards to purchase of inventory and fixed assets and for the sale of inventories.During the course of our audit, we have not observed any continuing failure to correct majorweakness in internal control system of the company.

5 A In respect of the contract or arrangements referred to in Section 301 of the Companies Act,1956, in our opinion and according to the information and explanation given to us, thetransactions made in pursuance of contracts or arrangements that need to be entered in theregister maintained under Section 301 of the Companies Act, 1956 have been so entered.

B In our opinion and according to the information and explanation given to us, the transactionsmade in pursuance of contracts or arrangements entered in the register maintained underSection 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect


21

of each party during the year have been made at prices which appear reasonable as perinformation available with the Company.

6 The Company has not accepted deposits from public within the purview of section 58-A orSection 58-AA of the Companies Act, 1956

7 In our opinion, the Company has an internal audit system commensurate with the size andnature of its business.

8 To the best of our knowledge and as explained, the Central Government has not prescribedmaintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 for theServices rendered by the company.

9 According to the information and explanations given to us and on the basis of our examinationof the records of the company, amounts deducted or accrued in the books of accounts inrespect of undisputed statutory dues including provident fund, Income Tax, Service Tax andother material statutory dues have been generally regularly deposited during the year by thecompany with the appropriate authorities. As explained to us, the company did not have anydues on account of Employees State Insurance, Wealth Tax, Cess and Investor Educationand Protection Fund.According to the information and explanations given to us and the recordsof the company examined by us, the dues of income tax, sales tax, Wealth tax, service tax,custom duty, and excise duty which have not been deposited on account of any dispute are asfollows:

Interest Tax: Assessment Year 1998-99, 1999-2000 and 2000-2001 cases are pending beforeAllahabad High Court by the Income Tax Department against the order of ITAT where in it isheld that the Finance Charges on Hire Purchase is not interest but a profit.

1. Income Tax:

a. Assessment Year 2001-2002 and 2002-2003 are pending before Allahabad High Court(by the Deptt.) against the order of the ITAT wherein depreciation is allowed at the rate of40% on leased vehicles.

b. Assessment Year 1996-1997 is pending before Allahabad High Court against the penaltyorder passed by the ITAT.

c. Assessment Year 2004-05: Case is pending before ITAT (u/s 254) and before HighCourt against the legal ground that case cannot be opened u/s 148 before completionof 12 months in which return of income was originally filed.

d. Assessment Year 2006-07: Case is pending before CIT (Appeals) Kanpur against theorder of the Assessing Officer.

e. Assessment Year 2007-08: Case is pending for assessment before DCIT -6 Kanpur.

f. Assessment Year 1995-96: We have filed a Writ Petition before Lucknow High Courtunder the KAR VIVAD SAMADHAN SCHEME and matter is pending before Lucknow HighCourt.


22

g. Assessment Year 1992-93: Application is pending for appeal effect to be given beforethe Assessing Officer.

The quantification of above liabilities has not been done on account of cases pending beforethe authority.

2. Legal Cases:

a. Disputed Case of Bhubaneswar Branch for recovery of Rs. 4.45/- Lacs deposited incourt.

b. Disputed Case of Citi Corp for recovery of Rs. 3.04/- Lacs of Alwar Branch.c.Disputed Case liabilities of Rs 3.08/- Lacs repayable if claimed by the customer

10 The Company has accumulated losses as at the end of financial year which is less than fiftypercent of its net worth and it has neither incurred cash losses in the current financial yearand nor there was cash loss in the immediately preceding financial year.

11 The company did not have outstanding dues in respect of financial institution, bank ordebenture holders during the year. .

12 According to the information and explanations given to us and based on the documents andrecords produced before us, the Company has not granted loans and advances on the basisof security by way of pledge of shares, debentures and other securities.

13 In our opinion, the company is not a chit fund or nidhi/mutual benefit fund/ Society. Accordingly,the provisions of clause 4(xiii) of the order are not applicable to the company and hence notcommented upon.

14 The Company has maintained proper records of the transactions and contracts of its tradingor dealing in shares, securities, debentures and other investments and timely entries havebeen made therein. All shares, securities, debentures and other investments have been heldby the company in its own name.

15 According to the information and explanations given to us, the Company has not givenguarantee for loan taken by others from banks or financial institutions.

16 The Company did not have any term loans outstanding during the year.

17 According to the information and explanations given to us, and on the basis of an Overallexamination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment.

18 The company has not made preferential allotment of shares during the year to parties orcompanies covered in the register maintained under section 301 of the Companies Act,1956.

19 The company does not have any outstanding debentures during the year.

20 The Company has not raised any money by public issue during the year.


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21 Based upon the audit procedures performed for the purpose of reporting the true and fairview of the financial statements and as per the information and explanations given by themanagement, we report that no fraud on or by the company has been noticed or reportedduring the year.

For Anil AgarwalChartered Accountants

Anil AgrawalProprietorMembership No: 79054



BALANCE SHEET AS AT 31ST MARCH, 2014Amount in Rs.

Note 31st March 2014 31st March 2013

EQUITY AND LIABILITIESShareholders’ Funds

Share Capital 3 587,060,083 587,060,083Reserves and Surplus 4 (5,686,067) (14,038,736)

581,374,016 573,021,347

Non Current LiabilitiesLong Term Borrowings 5 1,447,099 4,268,384

1,447,099 4,268,384Current Liabilities

Other Current Liabilities 6 26,455,112 365,416Short-Term Provisions 7 6,185,950 2,177,749

32,641,062 2,543,165

TOTAL 615,462,177 579,832,896

ASSETS

Non-Current AssetsFixed Assets

Tangible Asset 8 20,652 34,421

Non-Current Investments 9 72,451,622 314,273,897Deferred Tax Assets (Net) 366,833 368,317

72,839,107 314,676,635Current Assets

Inventories 10 53,334,533 -Cash and Bank Balances 11 12,540,539 1,078,666Short Term Loans and Advances 12 476,747,998 264,077,595

542,623,070 265,156,261

TOTAL 615,462,177 579,832,896

Summary of Significant Accounting Policies 2

The accompanying notes are an integral part of the Financial StatementsAs per our Report of even date

For Anil Agarwal For and On behalf of the Board of DirectiorsChartered Accountants

CA Anil AgarwalProperitor Babalu Prasad Keshari Deepak Kunjbihari DaveMembership No: 79054 Managing Diretor Director

Place : MumbaiDate : May 30, 2014

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STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2014Amount in Rs.

Note 31st March 2014 31st March 2013

IncomeRevenue from Operations 13 204,098,732 3,383,749

Other Income 14 57,519 33,686

Increase/(Decrease) in Inventories 15 53,334,533 -

Total 257,490,784 3,417,435

Expense

Purchases 237,148,786 -

Employee Benefit Expenses 16 446,950 199,000

Finance Cost 17 498,734 -

Depreciation 13,769 15,395

Other Expenses 18 6,151,729 3,060,785

Total 244,259,968 3,275,180

Profit Before Tax 13,230,816 142,255

Provision for Standard Assets 1,146,937 -

Tax ExpenseCurrent Tax 3,729,726 27,107

Deferred Tax 1,484 1,072

Profit for the year 8,352,668 114,076

Earnings per share of Re 1/- eachComputed on the basis of total profit from continuing operations

Basic 0.01 0.03

Diluted 0.01 0.00

Summary of Significant Accounting Policies



CA Anil AgarwalProperitor Babalu Prasad Keshari Deepak Kunjbihari DaveMembership No: 79054 Managing Diretor Director


25


26

Cash Flow Statement for the year ended 31st March 2014Amount in Rs.

Particulars 2013-2014 2012-2013

A Cash Flow from Operating Activities :Net Profit after tax, Prior Period and Extraordinary Items : 8,352,668 114,076

Adjustments for :Depreciation on fixed assets 13,769 15,395Operating Profit before Changes in Operating Assets 8,366,437 129,471Adjustments for net change in :

Short Term Loans and Advances (212,670,403) (256,281,261)Increase / (Repayment) of Long Term Borrowings (2,821,285) (15,276,083)Other Current Liabilities 26,089,696 135,666Inventories (53,334,533) -Provision for Standard Assets 1,146,937 -Provision for taxation and adjustment for earlier year taxes 2,861,264 46,647Provision For Deffered Tax 1,484 1,072Cash Flow before Prior Period and Extraordinary Items (230,360,402) (271,244,488)Net Income tax Paid and Refunds -

Net Cash Flow from Operating Activities ---------------(A) (230,360,402) (271,244,488)

B Cash Flow from Investing Activities :Procurement of Fixed Assets - (49,816)Investments in Non-Current Investments 241,822,275 (314,273,897)

Net Cash Flow from Investing Activities ---------------(B) 241,822,275 (314,323,713)

C Cash Flow from Financing Activities :Issue of Equity Shares - 582,397,150Receipt on Amalgamation

Securities Premium - 11,413,040Reserves & Surplus - (7,207,283)

Net Cash Flow from Financing Activities ---------------(C) - 586,602,907

Net Increase in Cash and Cash Equivalents (A) + (B) + ( C) 11,461,873 1,034,706

Cash & Cash Equivalents at the beginning of the period 1,078,666 43,960

Cash & Cash Equivalents at the end of the period 12,540,539 1,078,666

Cash in Hand 193,176 485,492Balances with Banks 12,347,363 593,174Total 12,540,539 1,078,666


CA Anil Agarwal Babalu Prasad Keshari Deepak Kunjbehari DaveProperitor Managing Diretor DirectorMembership No: 79054


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27

Notes to Financial Statements:

1 General Information:

Kailash Auto Finance Ltd. Is a public company domiciled in India and incorporated under theprovisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India.The company is engaged in the business of NBFC activities. The company caters to domesticmarket only.

2 Significant Accounting Policies:

2.1 Basis of preparation of Financial Statements:

The Financial Statements have been prepared in accordance with the generally acceptedaccounting principles (‘GAAP’) applicable in India under the historical cost convention on accrualbasis. These financial statements have been prepared to comply in all material aspects with theaccounting standards notified under Section 211 (3C), Companies (Accounting Standard) Rules,2006, as amended from time to time and the other relevant provisions of the Companies Act,1956 read with General Circular 8/2014 dated 04.04.204 issued by the Ministry of CorporateAffairs and the directives as prescribed by the Reserve Bank of India.

All Assets and Liabilities have been classified as current or non-current as per the Company’snormal operating cycle and other criteria set out in Schedule VI of the Companies Act, 1956.

2.2 Investments

Investments which are readily realizable and intended to be held for not more than one year fromthe date on which such investments are made are classified as current investments in accordancewith the RBI guidelines and Accounting Standard 13 on ‘Accounting for Investments’ as notifiedunder the companies (Accounting Standards) Rules, 2006.Current investments also includecurrent maturities of long-term investments. All other investments are classified as non-currentinvestments. Current investments are carried at lower of cost and market price determinedcategorywise. All non-current investments are carried at cost. However, provision for diminutionin value, other than temporary in nature, is made to recognize a decline, on an individual basis.

Investment in Venture Capital is valued at cost.

2.3 Use of Estimates:

The preparation of Financial Statements in conformity with GAAP requires that the managementof the Company makes estimates and assumptions that affect the reported amounts of incomeand expenses of the period, the reported balances of assets and liabilities and the disclosuresrelating to contingent liabilities as of the date of the financial statements. Actual results coulddiffer from these estimates. Difference between the actual results and estimates are recognizedin the period in which the results are known / materialized. Management believes that theestimates used in preparation of financial statements are prudent and reasonable.

2.4 Inventories

Stock in trade are valued at cost.

2.5 Cash Flow Statement:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition),highly liquid investments that are readily convertible into known amounts of cash and which aresubject to insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinaryitems and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or

27


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accruals of past or future cash receipts or payments. The cash flows from operating, investingand financing activities of the Company are segregated based on the available information.

2.6 Tangible Assets:

Tangible Assets are stated at cost (or revalued amount as the case may be) less accumulateddepreciation and accumulated impairment losses if any. Cost Comprises purchase price andany other attributable cost of bringing the asset to its working condition for its intended use.Subsequent expenditure related to an item of fixed asset are added to its book value only if theyincrease the future benefits from the existing asset beyond its previously assessed standard ofperformance.

Gain or loss arising from de-recognition of assets are measured as the difference between thenet disposal proceeds and the carrying amount of the assets and are recognized in the statementof profit and loss when the asset is derecognized.

Depreciation on fixed assets is provided on written down value method (WDV) at the rates and inthe manner prescribed in Schedule XIV of the Companies Act, 1956 over their useful life.Depreciation of asset sold / discarded during the period is proportionately charged. Individuallow cost assets (acquired for less than Rs 5000/-) are depreciated within a year of acquisition.Intangible assets are amortized over their estimated useful life on a straight line basis.

2.7 Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets arecapitalized as part of the cost of such assets. A qualifying asset is one that takes necessarilysubstantial period of time to get ready for its intended use. All other borrowing costs are chargedto revenue.

2.8 Impairment of assets :

As on Balance Sheet date, the Company reviews the carrying amount of Fixed Assets to determinewhether there are any indications that those assets have suffered “Impairment Loss”. Impairmentloss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverableamount. Recoverable amount is higher of an asset’s net selling price and its value in use. Valuein use is the present value of estimated future cash flows expected to arise from continuing useof an asset and from its disposal at the end of its useful life.

2.9 Revenue Recognition:

Income and expenditure are recognized and accounted on accrual basis as and when they areearned or incurred. Revenue from sales transaction is recognized as and when the significantrisk and reward attached to ownership in goods is transferred to the buyer. However leave withwages and bonus is accounted on cash basis.

Profit on sale of investments is recorded on transfer of title from the company and is determinedas the difference between the sale price and the carrying value of the investment. Interest incomeis accounted on accrual basis. Dividend income is accounted for when the right to receive it isestablished.

Hire purchase and Lease Income is accounted by using the internal rate of return (IRR) implicitin contracts to provide a constant periodic rate of return on the net outstanding on those contracts.

Prompt payment rebate and overdue charges are determined and accounted for on terminationof the contracts.

The company follows prudential norms for recognition of Income of Non Performing Assets asper the directions prescribed by Reserve bank of India for NBFC.


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2.10 Employee Benefits:

Short term benefits and post employment benefits are accounted in the period during which theservices have been rendered.

2.11 Foreign Exchange Transactions:

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of therespective transactions.

Foreign Exchange monetary items in the Balance Sheet are translated at the year-end rates.Exchange differences on settlement / conversion are adjusted to Profit and Loss Account.

2.12 Tax Expense:

Tax expenses for the year comprise of current tax and deferred tax. Current tax is measured aftertaking into consideration the deductions and exemptions admissible under the provision ofIncome Tax Act, 1961 and in accordance with Accounting Standard 22 on “Accounting for Taxes onIncome”.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economicbenefits in the form of adjustment to future income tax liability, is considered as an asset if thereis convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognisedas an asset in the Balance Sheet when it is probable that future economic benefit associatedwith it will flow to the Company.

Deferred Tax represents the tax effect of timing differences between taxable income andaccounting income for the reporting period and is capable of reversal in one or more subsequentperiods. Deferred tax are quantified using the tax rates and laws enacted or substantively enactedas on the Balance Sheet Date.

Deferred Tax Assets are recognized and carried forward only to the extent that there is reasonablecertainty that sufficient future taxable income will be available against which such deferred taxassets can be realized. Deferred tax asset on unabsorbed depreciation and carry forward oflosses are not recognized unless there is virtual certainty that sufficient future taxable income willbe available against which such deferred tax assets can be realized.

2.13 Contingent Liabilities and Provisions:

Provisions are recognized only when there is a present obligation as a result of past events andwhen a reliable estimate of the amount of obligation can be made.

Contingent Liability is disclosed for

a. Possible obligation which will be confirmed only by future events not wholly within the controlof the company or

b. Present obligations arising from the past events where it is not probable that an outflow ofresources will be required to settle the obligation or a reliable estimate of the amount of theobligation cannot be made.

c. Contingent Assets are not recognized in the financial statements since this may result in therecognition of income that may never be realized.

2.14 Earnings per Share:

In determining the Earnings Per share, the company considers the net profit after tax includingany post tax effect of any extraordinary / exceptional item. The number of shares used in computingbasic earnings per share is the weighted average number of shares outstanding during theperiod.


The number of shares used in computing Diluted earnings per share comprises the weightedaverage number of shares considered for computing Basic Earnings per share and also theweighted number of equity shares that would have been issued on conversion of all potentiallydilutive shares.

In the event of issue of bonus shares, or share split the number of equity shares outstanding isincreased without an increase in the resources. The number of Equity shares outstanding beforethe event is adjusted for the proportionate change in the number of equity shares outstanding asif the event had occurred at the beginning of the earliest period reported.

2.15 Provisioning For Standard Assets

The Reserve Bank of India (RBI) vide Notification no. DNBS 223/CGM/(US)-2011 dated January17, 2011 has issued direction to all NBFCs to make provision of 0.25% on standard assets.Accordingly, the company has made provision @0.25% on standard assets in accordance withRBI directions.

2.16 Segment Reporting:

The generally accepted accounting principles used in the preparation of the financial statementsare applied to record revenue and expenditure in individual segments.

Segment revenue and segment results include transfers between business segments. Suchtransfers are accounted for at the agreed transaction value and such transfers are eliminated inthe consolidation of the segments.

Expenses that are directly identifiable to segments are considered for determining the segmentresult. Expenses, which relate to the company as a whole and are not allocable to segments, areincluded under unallocated corporate expenses.

Segment assets and liabilities include those directly identifiable with the respective segments.Unallocated corporate assets and liabilities represent the assets and liabilities that relate to thecompany as a whole and not allocable to any segment.

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Notes to the Financial Statements as at and for the year ended 31st March 2014 Amount in Rs.

Particulars 31st March 2014 31st March 2014 31st March 2014 31st March 2014(No. of Shares) (No. of Shares)

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Note - 3 : Share Capital

(a) Authorised

Ordinary Shares of Rs 10/- each 10,000,000 100,000,000 10,000,000 100,000,000

Ordinary Shares of Re 1/- each 600,000,000 600,000,000 600,000,000 600,000,000

Preference Shares of Rs100/- each 500,000 50,000,000 500,000 50,000,000

610,500,000 750,000,000 610,500,000 750,000,000

(b) Issued , Subscribed and Fully Paid up

Ordinary shares of Re 1/- each 587,060,083 587,060,083 1,149,283 1,149,283fully paid up

Share Capital Suspense Account - - 585,910,800 585,910,800

587,060,083 587,060,083 587,060,083 587,060,083

Notes:

(A) Reconciliation of the number of shares and amount outstanding at the beginning and at theend of the reporting period:

Particulars As at As at31st March 2014 31st March 2013

(No of Shares) (No of Shares)

Equity Shares of Re1/- (Rs10) each at the 1149283 3805900beginning of the year

Share Capital Suspense Shares issued 585910800 -to the Shareholders

Conversion of Equity Shares Rs10 each into - 3805900Equity Shares of Re1 each

Less Cancellation of Shares as a result of cross - 1328259holding in Careful Projects Advisory Ltd

Less Cancellation of Shares as a result of cross - 1328358holding in Panchshul Marketing Ltd

587060083 1149283

(B) Details of shares held by each shareholder holding more than 5% shares:

31st March 2014 31st March 2013

Class of shares/ Number of shares % holding in that Number of shares % holding in thatName of shareholder held class of shares held class of shares

Equity shares with - - - -voting rights

(C) Rights, preference and restrictions attached to the Ordinary Shares

The Ordinary Shares of the Company , having par value of Re1 per share, rank paripassu in allrespects including voting rights and entitlement to dividend


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31st March 2014 31st March 2013Note - 4 Reserves & Surplus

Profit & Loss AccountAt the Begining of the year (46,641,318) (72,944,178)Add For The Year 8,352,668 114,076Less Adjusted on Capital Reduction - (34,253,100)Less Loss on Amalgamation - 8,103,051Add Transfer on Amalgamation ofCareful Projects Advisory Ltd - 19,403Transfer on Amalgamation of PanchshulMarketing Ltd - 19,332At the end of the year (38,288,649) (46,641,318)

General ReserveAt the Begining and at the end of the year 8,955,000 8,955,000Securities Premium AccountAt the Begining of the year 19,262,549 7,849,509Add Transfer on Amalgamation of Careful Projects Advisory Ltd - 6,135,123 Transfer on Amalgamation of Panchshul Marketing Ltd - 5,277,917At the end of the year 19,262,549 19,262,549Statutory ReserveAt the Begining and at the end of the year 3,528,000 3,528,000Capital ReserveAt the Begining of the year 857,033 -Add During the year - 857,033At the end of the year 857,033 857,033

(5,686,067) (14,038,736)Note - 5 Long Term BorrowingsFixed Deposit with Public 270,000 270,000Add Interest Accrued and Due on Fixed Deposits 19,280 19,280Less Amount Deposited in SBI Escrow Account 321,590 (32,310) 321,590 (32,310)Other Liabilities 1,479,409 4,300,694

1,447,099 4,268,384

Note - 6 Other Current LiabilitiesLiabilities For Expenses 252,113 365,416Trade Payables 26,059,820 -Statutory Dues 143,179 -

26,455,112 365,416

Note - 7 Short Term ProvisionsProvision for Standard Assets 1,146,937 -Provision for Tax 5,039,013 2,177,749

6,185,950 2,177,749


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Note - 9 Non Current InvestmentsInvestments (at Cost):Investments in Quoted Equity Shares 1,978,121 4,781,024Investment In Venture Capital Fund 5,180,000 -Other Investments 65,293,501 309,492,873

72,451,622 314,273,897

Market Value of Quoted Investments 2,195,077 5,164,400

Note - 10 InventoriesClosing Stock of Shares 53,334,533 -

53,334,533 -

Note - 11 Cash and Cash BalancesCash on hand 193,176 485,492Balance with Scheduled Banks - In current account 12,346,741 592,552Escrow Account 622 622

12,540,539 1,078,666

Note - 12 Short Term Loans and Advances(Unsecured, considered good unless otherwise stated)Loans & Advances 458,774,861 255,984,255Advance against Land 9,000,000 -Advance recoverable in cash or in kind or value to be received 217,972 -Security Deposit with Court 445,000 445,000Balance with Revenue Authorities 8,310,165 7,648,340

476,747,998 264,077,595

Note - 13 Revenue From OperationsSales 183,983,939 -Interest Income 14,196,414 3,113,999Interest On Fixed Deposit - 10,822Profit on sale of Mutual Fund - 258,928Other Operating Income 5,918,379 -

204,098,732 3,383,749

Note - 14 Other IncomeShort Term Capital Gain 12,350 -Miscellaneous income 45,169 33,686

57,519 33,686




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Note - 15 Increase /(Decrease in Inventories)Closing Stock of Shares 53,334,533 -Opening Stock of Shares - -

53,334,533 -

Note - 16 Employees Benefit ExpensesSalaries 446,950 199,000

446,950 199,000

Note - 17 Finance CostInterest Paid 498,734 -

498,734 -Note - 18 Other expensesAdvertisement 88,375 497,125Printing & stationery 48,350 122,029Sebi Expenses - 125,000Domain Registration Expenses 45,618 -Demat Expenses 4,299 1,220Rent paid 78,000 452,424Travelling & Conveyance 629,482 225,325Miscellaneous expenses 959,018 77,755General Expenses 76,000 -Staff Welfare 57,946 -Postage & Courier Charges 96,712 231,743Bank Charges 51,529 24,071Auditors RemunerationAudit Fees 35,000 25,000Tax Audit Fees 10,000 -Other Services - 16,500Registrar Expenses 64,608 154,294Professional Fees 3,476,678 776,649Depository Charges 227,754 111,650Listing Fees 112,360 -Legal Fees 90,000 220,000

6,151,729 3,060,785Auditors’ RemunerationAs Audit Fees 35,000 25,000Tax Audit Fees 10,000 -Other Services - 16,500

45000 41,500




Notes to the Financial Statements as at and for the year ended 31st March 2014

19 Impairment of Assets:Assets of the Company are being tested for impairment. Considering the internal and externalsources of information, there was no indication of potential impairment loss, and henceestimation of recoverable amount does not arise.

20 Related Party Transactions Nature of Relationship Name of the Related Party Key Managerial Personnel Mr. Babalu Prasad Keshari

Mr. Dipan Patel JesinghbhaiMr. Kailash Chand GuptaMr. Asmanja DebMr. Deepak Kunjbihari DaveMr. Gopal Bhutra(Ceased to be related party w.e.f 23.09.2013)

21 Earnings per Share as per Accounting Standard 20: Particulars Year Ending Year Ending

March 31, 2014 March 31, 2013 Profit after Tax 83,52,668 1,14,076 Weighted Average number of Equity Shares used as denominator for calculating EPS 58,70,60,083 37,98,622 Basic Earnings Per Share of Re1/- each 0.01 0.03 Potentially dilutive shares 58,70,60,083 58,97,09,422 Diluted Earnings per share 0.01 0.00

22 Deferred Tax Asset Particulars Year Ending Year Ending

March 31, 2014 March 31, 2013 Fixed Asset as per Income Tax Act 12,380 30,950 Fixed Asset as per Companies Act 20,652 34,421 Deferred Tax Liability 8,272 3,471 Tax on above 2,556 1,072

23 Contingent Liabilities:a. Contingent Liabilities not provided for

Particulars Year Ending Year EndingMarch 31, 2014 March 31, 2013

Income Tax & Interest Tax demands disputed by the 58,37,482 58,37,482 company (Amount already paid Rs 57,98,482/-)

Service Tax on Hire Purchase and Lease Amount not Amount nottransaction not realized and paid in view of interim ascertained ascertainedstay of Hon’ble Madras High Court.

Disputed penalty liabilities in legal cases 7,00,213 7,00,213(Amount already paid Rs 3,55,000/-)

Income Tax Demand for the F.Y.2003-04 4,45,727 4,45,727(Matter pending with ITAT)

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b. Stock in hire repossessed include 14 cases amounting to Rs 18,17,000/- which arelegally disputed and their recovery is pending before the legal authorities.

c. The Contingent liabilities as mentioned in point no a & b above except disputed liabilitieson account of income tax and other statutory taxes had been assigned to M/s KailashMotors Finance Pvt Ltd, Jabalpur vide assignment deed executed on 13.02.2012.

24 Fixed Deposit repayment due within one year is Rs. 2,89,280/- (Previous year Rs. 2,89,280/-) anall due amount deposited in SBI Escrow Account.

25 The Company is engaged primarily in the business of Non Banking Financial Activities andaccordingly there are no separate reportable segments as per Accounting Standard AS-17-Segment Reporting issued by ICAI.

26 Certain Balances of parties under sundry debtors, creditors, loans and advances areunder confirmations/reconciliation.

27 The Current Assets, Loans and Advances have a value on realization in the ordinary course ofbusiness atleast equal to the amount at which they are stated in the Balance Sheet.

28 Information as required in terms of paragraph 9BB of NBFC Prudential Norms (ReserveBank) Direction 1998 is attached.

29 There was no expenditure/earning in Foreign Currency during the year.

30 As informed there are no dues to Micro Small and Medium Enterprises as on 31.3.2014.

31 The Non Banking business of the company under category “A” of Reserve Bank of India hasbeen converted to category “B” i.e. non deposit acceptance company w.e.f 12th Jan 2009.

32 The Previous year’s figures have been regrouped, reclassified or rearranged wherevernecessary.



CA Anil Agarwal Babalu Prasad Keshari Deepak Kunjbehari DaveProperitor Diretor DirectorMembership No: 79054



Information as required in terms of Paragraph 9BB of Non Banking Financial Prudential Norms(Reserve Bank) Direction 1998 :-

ParticularsLiabilities Side:1 Loans & Advances availed by the NBFC’s inclusive

of interest accrued thereon but not paid Amount Outstanding Amount Overdue(a) Debentures : Secured - -

Unsecured - -(Other than falling within the meaning of public deposits)

(b) Deferred Credits - -(c) Term Loans - -(d) Intercorporate Loans & Borrowings 1,450,000 -(e) Commercial Papers - -(f) Public Deposits - -(g) Other Loans (specify nature) - -

2 Break up of (1) (f) above (Outstanding public depositsinclusive of interest accrued thereon but not paid)

(a) In the form of Unsecured debentures -(b) In the form of partly secured debentures i.e. debentures

where there is a shortfall in the value of security(c) Other Public Deposits -

Assets side:3 Break-up of Loans & Advances including bills receivables

(other than those include in para (4) below)(a) Secured -(b) Unsecured 467,774,861

4 Break-up of Leased Assets and stock on hire andhypothecation loans counting towards EL/HP activities.

(i) Lease assets including lease rentals under sundry debtors(a) Financial lease -(b) Operating lease -

(ii) Stock on hire including hire charges under sundry debtors :(a) Assets on hire -(b) Repossessed Assets -

(iii) Hypothecation loans counting towards EL/HP activities(a) Loans where assets have been repossessed -(b) Loans other than (a) above (Nos) -

5 Break-up of InvestmentCurrent Investments

1 Quoted(I) Shares (a) Equity -

(b) Preference -(ii) Debentures & Bonds -(iii) Units of mutual funds -(iv) Government Securities -(v) Others ( please specify) -

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2 - Unquoted (i) Shares (a) Equity -

(b) Preference - (ii) Debentures & Bonds - (iii) Units of mutual funds - (iv) Government Securities - (v) Others ( please specify) -

Long Term Investments

1 - Quoted (I) Shares (a) Equity 1,978,121

(b) Preference - (ii) Debentures & Bonds - (iii) Units of mutual funds - (iv) Government Securities - (v) Others ( please specify) -

2 - Unquoted (I) Shares (a) Equity 59,914,723

(b) Preference - (ii) Debentures & Bonds - (iii) Units of mutual funds - (iv) Government Securities - (v) Others 5,378,778

6 Borrower group wise classification of all leased assets stockon hire and loans and advancesCategory Amount Net of Provisions

Secured Unsecured Total1 Related Parties

(a) Subsidiaries - - -(b) Companies in the same group - - -(c) Other Related Parties - - -

2 Other than Related Parties - 467,774,861 467,774,861Total - 467,774,861 467,774,861

7 Investor group wise classification of all investments (Currentand long term) in shares & securities (both quoted & unquoted)

Category Market Value / Book Value (Net ofBreak up or Provisions)

fair value or NAV1 Related Parties

(a) Subsidiaries - -(b) Companies in the same group - -(c) Other Related Parties -

2 Other than Related Parties 72,668,578 72,451,622Total 72,668,578 72,451,622


8 Other Information

Particulars

1 Gross Non Performing Assets(a) Related Parties -(b) other than Related Parties -

2 Net Non Performing Assets(a) Related Parties -(b) other than Related Parties -

3 Assets acquired in satisfaction on debts -

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