Kiran Vyapar Ltd Directors Report.

TO THE MEMBERS

Your Directors have pleasure in presenting their 24th Annual Report on the business and operations of the Company and the Audited Financial Statements for the Financial Year ended 31st March, 2020.

1. Financial Performance of the Company

(RS. in Lacs)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Total Income 3137.79 5357.24 5967.00 10150.02
Total Expenses 1455.44 3025.83 4570.14 7658.47
Profit before share of profit in Associates - - 1396.86 2491.55
Share of Profit of Associates(net) - - (1483.75) 250.15
Profit Before Tax 1682.35 2331.41 (86.89) 2741.70
Tax Expenses 727.67 923.39 709.77 371.02
Profit for the year 954.68 1408.02 (796.66) 2370.68
Other Comprehensive Income (3246.65) 350.14 (10968.96) (2251.36)
Total Comprehensive Income (2291.97) 1758.16 (11765.62) 119.32
Appropriations:
Profit for the year 954.68 1408.02 (796.66) 2370.68
Balance brought forward 46397.50 45962.41 64458.41 63344.06
Amount Available for Appropriations 47352.18 47370.43 63661.75 65714.74
Dividend Paid 682.11 648.00 674.53 647.98
Tax on Dividend 1.46 - 140.21 133.62
Transfer to Statutory Reserve 190.94 319.64 156.27 360.30
Impairment Reserve 23.28 - 23.28 -
Minority Interest - - 24.64 106.77
Re-measurement of defined benefit plans (net) 1.69 5.29 3.74 7.66
Balance carried forward 46452.70 46397.50 62640.76 64458.41

a) Consolidated operations

Revenue from the consolidated operations of the Company for the year ended 31st March, 2020, was Rs. 5935.95 Lacs. It is 41.05 per cent lower than Rs. 10070.17 Lacs in the previous year. Overall operational expenses for the year was Rs. 4570.14 Lacs against Rs. 7658.47 Lacs in the previous year. Loss for the year 2019-20 was Rs. 796.66 Lacs as compared to Profit for the year 2018-19 of Rs. 2370.68 Lacs; mainly due to the adverse impact of Covid-19 pandemic on the financial and capital markets thereby impacting the overall performance of the Company during the year 2019-20.

b) Standalone operations

Revenue from the standalone operations of the Company for the year was Rs. 3117.32 Lacs. It is 41.75 percent lower than Rs. 5351.87 Lacs in the previous year. Overall operational expenses for the year was Rs.1455.44 Lacs, against Rs. 3025.83 Lacs in the previous year. Profit after tax for the year 2019-20 stood at Rs. 954.68 Lacs as compared to Profit for the year 2018-19 of Rs.1408.02 Lacs; mainly due to the adverse impact of Covid-19 pandemic on the financial and capital markets thereby impacting the overall performance of the Company during the year 2019-20.

The Capital to Risk Assets Ratio (CRAR) of your Company stood at 82.09 per cent as on March 31, 2020, well above the regulatory minimum level of 15 per cent prescribed by the Reserve Bank of India for Systematically Important Non-Deposit Taking NBFCs (NBFCs- ND-SI). Of this, the Tier I CRAR was 81.81 per cent.

c) Basis of preparations of financial statements

These standalone financial statements has been prepared in accordance with Indian Accounting Standards notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time (‘Ind AS) along with other relevant provisions of the Act; the Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (‘the NBFC Master Directions) issued by RBI (as amended) and the regulatory guidance on implementation of Ind AS as notified by the RBI vide notification dated 13 March 2020.

The Guidance Note on Division III - Schedule III to the Companies Act. 2013 issued by the Institute of Chartered Accountants of India ("ICAI") has been followed insofar as they are not inconsistent with any of these Directions.

These standalone financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these standalone financial statements.

The Company has complied with all the norms prescribed by the Reserve Bank of India (RBI) including the Fair practices, Anti Money Laundering and Know Your Customer (KYC) guidelines.

2. BRIEF DESCRIPTION OF THE COMPANYS AFFAIRS

Your Company is a Non-Banking Financial Company - Systematically Important Non-Deposit taking Company registered with the Reserve Bank of India. The Business model of the Company comprises of Lending and Acquisition / Investments in Shares and Securities including Mutual Funds etc.

3. IMPACT OF COVID-19 PANDEMIC

COVID-19, a global pandemic has affected the world economy including India, leading to significant decline and volatility in financial markets and decline in economic activities. The national lockdown announced on 23rd March 2020 affected activities of organizations across the economic ecosystem, impacting earning prospects and valuations of companies and creating huge volatility in the stock markets. As a result, the Companys business is likely to be impacted by lower lending opportunities and decline in carrying value of investments, thereby impacting profitability. The impact of COVID-19 on Companys financial statements remain uncertain and dependent on extent of spread of the pandemic, steps taken by the Government and central bank to mitigate the economic impact, steps taken by the Company and its Investee Companies and the time it takes for economic activities to resume at normal levels as a result of which, actual results may differ. In accordance with the Reserve Bank of India guidelines relating to COVID-19 Regulatory Package dated 27th March 2020 and 17th April 2020, the Company granted moratorium of up to 3 months on repayment of all instalments and/ or interest, as applicable, falling due between 1st March 2020 and 31st May 2020 to all the eligible borrowers as per the Companys policy, however none of the borrowers availed the moratorium. Further, the Company will be extending moratorium to its borrowers as announced by RBI vide its subsequent notification dated 22nd May 2020.

The stock exchanges, banks and financial institutions were permitted to function during the national lockdown and correspondingly the lending and investment activities of the Company remained operational. Basis the relaxations granted post the lockdown period, the Companys registered office have been made operational. The employees are permitted to work in accordance with the guidelines issued by the Ministry of Home Affairs (MHA) and the respective state governments. The Companys capital and liquidity position remains strong and would continue to be the focus area for the Management. There have been no significant changes to the Companys internal financial control other than providing remote access to some of its key employees during the lockdown to facilitate work from home.

Based on the current assessment of the potential impact of the COVID-19 on the Company, management is of the view that the Company is well capitalised with low leverage, widely diversified in terms of its lending and investment activities and has adequate liquidity to service its obligations, sustain its operations and also look at any appropriate investment/lending opportunities.

The Company has maintained adequate provisions on loan assets based on the information available at this point of time including economic forecasts. The extent to which the current pandemic will impact the carrying value of investments and loan receivables is dependent on the future developments, which are highly uncertain at this point in time. The Company believes that it has considered all the possible impact of known events arising out of COVID 19 pandemic in the preparation of these financial statements. The impact assessment of COVID - 19 is a continuing process given its nature and duration. The Company will continue to monitor for any material changes to future economic conditions.

4. DIVIDEND

Your Directors recommend a Dividend of Rs. 0.75 per equity share aggregating to Rs. 204.63 Lacs (approx.) to the Equity shareholders of your Company for the Financial Year 2019-2020.

5. RESERVES

The Board in its meeting held on 15th June, 2020, proposes to carry an amount of Rs. 190.94 Lacs to Statutory Reserve as per the existing provisions of the Companies Act, 2013 and Rules there under read with the Reserve Bank of India Guidelines as applicable to the Company.

6. SHARE CAPITAL

During the year under review, the Authorized Share Capital of the Company stands at Rs. 51,00,00,000/- (Rupees Fifty-One Crores Only) divided into 5,10,00,000 (Five Crores Ten Lacs) Equity Shares of Rs. 10/-. Issued, Subscribed and Paid-up Share Capital of the Company stands at Rs. 27,28,42,110/- (Rupees Twenty Seven Crores Twenty Eight Lacs, Forty Two Thousand One Hundred Ten Only) divided into 2,72,84,211 (Two Crores Seventy Two Lacs Eighty Four Thousand Two Hundred Eleven only) Equity Shares of Rs. 10/-.

During the year under review, your Company has neither issued and allotted any fresh equity shares nor has granted sweat equity as on 31st March, 2020.

None of the Directors of the Company hold instruments convertible into equity shares of the Company.

7. KIRAN VYAPAR LIMITED- SHARE INCENTIVE PLAN 2018 ["KVL SIP 2018"]

Members of the Company at their Extra-ordinary General Meeting (EGM) held on 30th March, 2018, have approved the Kiran Vyapar Limited -Share Incentive Plan 2018 ["KVL SIP 2018"] in compliance of the Securities and Exchange Board of India (Share Based and Employee Benefits) Regulations, 2014.

Under the KVL SIP 2018, two types of stock incentives will be awarded to the employees of the Company (and/ or of its subsidiary/holding company) as selected by the Nomination and Remuneration Committee of the Company ("NRC") ("Eligible Employees") being:

(a) An employee stock option scheme ("ESOS") wherein an option will entitle an Eligible Employee to subscribe to the Equity Shares at a predetermined price ("Exercise Price") upon fulfilment of vesting conditions; and

(b) An employee share purchase scheme ("ESPS") wherein an Eligible Employee to whom an offer is made may subscribe to the Equity Shares at a predetermined price ("Subscription Price"). The Equity Shares issued under ESPS will be subject to lock-in.

Further, the maximum number of Equity Shares that may be issued in aggregate either by way of grant of options under ESOS or by way of an offer to subscribe to the Equity Shares under the KVL SIP 2018 shall be within an overall limit of 10% of the total issued, subscribed and paid-up equity share capital of KVL (which is 25,92,000 (Twenty-five lac and ninety-two thousand) Equity Shares) as on the date of the notice of the EGM ("Overall Limit"). Any award of stock incentive under KVL SIP 2018 which may be either by way of grant of options under ESOS or offer to subscribe to the Equity Shares to the Eligible Employees which shall be determined by the NRC as per the terms of the KVL SIP 2018 (i) on a case to case basis in accordance with the terms of KVL SIP 2018; and (ii) shall be within the Overall Limit.

The Nomination and Remuneration Committee of the Company at their meeting held on 28th March, 2019 has considered and approved to make an offer to identified employee(s), subscribe to 13,64,211 (Thirteen Lacs Sixty Four Thousand Two Hundred Eleven) Equity Shares bearing face value of INR 10 each under the Employee Share Purchase Scheme of KVL SIP 2018; pursuant to tranche-I implementation of KVL SIP 2018.

Further, the Board of Directors of the Company at their meeting held on 29th March, 2019 has considered and approved allotment of 13,64,211 (Thirteen Lacs Sixty Four Thousand Two Hundred Eleven) Equity Shares bearing face value of INR 10 each to employee(s) who have accepted the offer to subscribe to the Equity Shares made under the Employee Share Purchase Scheme of KVL SIP 2018; pursuant to tranche-I implementation of KVL SIP 2018 by the Company.

During the Year under review, no allotment were made under the Employee Share Purchase Scheme of KVL SIP 2018, therefore no disclosures are required to be made with respect to Employee Share Purchase Scheme (ESPS) of Kiran Vyapar Limited - Share Incentive Plan 2018 of the Company ("KVL SIP 2018") pursuant to Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in this Report.

The Company has not implemented Employee Stock Option Scheme (ESOS) under Kiran Vyapar Limited - Share Incentive Plan 2018 till date and therefore there are no disclosures are required to be made pursuant to Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in relation to ESOS in this Report.

8. DEPOSITS

Your Company is an NBFC "Non-Deposit Taking Systematically Important Company" registered with Reserve Bank of India. During the year under review, your Company has not accepted any deposits from the public within the meaning under the provisions of the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and Chapter V of the Companies Act, 2013.

9. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there were no changes in the nature of the business of the Company.

10. MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 31st March, 2020 and at the date of report.

11. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

12. EXTRACT OF THE ANNUAL RETURN

Extract of the Annual Return, as at the financial year ended March 31,2020 in Form MGT-9 as per Section 134(3)(a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules, 2014 and Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed hereto and forms part of this report as "Annexure A".

13. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EARNING/OUTGO

As your Company is a Non-Banking Financial Company and does not own any manufacturing unit, there are no particulars with regard to disclosure under Section 134 of the Companies Act, 2013 with regard to conservation of energy, technology absorption etc.

During the year under review, there is no foreign exchange earnings and outgo made by the Company.

14.DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Details of Directors retiring by rotation

In accordance with the provisions of the Companies Act, 2013, Ms. Sheetal Bangur (DIN:00003541) retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Brief profile of Ms. Sheetal Bangur, who is to be re-appointed is furnished in the Notice of the ensuing Annual General Meeting as per Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2. The Board of Directors of your Company recommends the re-appointment of Ms. Sheetal Bangur at the ensuing Annual General Meeting.

b) Appointment/ Re-appointment of Directors

During the year under review, there is no change in the composition of Directors of the Company

c) Appointment/Resignation of Key Managerial Personnel

During the year under review, no Key Managerial Personnel was appointed or has resigned during the financial year 2019-2020.

d) Fit And Proper Policy

Your Company being an NBFC "Non-Deposit Taking Systematically Important Company" registered with Reserve Bank of India has put in place a policy with the approval of the Board of Directors for ascertaining the fit and proper criteria of the directors at the time of appointment, and on a continuing basis. The Company had duly obtained a declaration and undertaking and a Deed of Covenant from the directors.

15. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from the Independent Director(s) of the Company declaring that they meet the criteria of independence both, as under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Based on the declarations, disclosures received from the Independent Directors and on evaluation of the relationships disclosed, the following Non-executive Directors are Independent Directors in terms of the Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013.

i. Mr. Amitav Kothari

ii. Mr. Bhaskar Banerjee

iii. Mr. Rajiv Kapasi

During the financial year 2019-20, all Independent Directors of the Company have registered themselves with the Independent Directors Databank.

16. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the Listing Regulations, 2015 the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board and of the Committees of the Board, by way of individual and collective feedback from Directors.

Pursuant to Para VII of Schedule IV of the Companies Act, 2013 and Regulation 25 (3) of the Listing Regulations, 2015, a separate meeting of the Independent Directors of the Company was convened on 8th February, 2020 to perform the following:

• review the performance of non-independent directors and the Board as a whole;

• review the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors;

• assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Further, the Nomination and Remuneration Committee also evaluated the performance of all the Directors of the Company.

Based on the criteria, the performance of the Board, various Board Committees and Individual Directors (including Independent Directors) was evaluated and found to be satisfactory.

During the year under review, the Independent Directors of your Company reviewed the performance of Non Independent Directors and Chairperson of your Company, taking into account the views of Executive Director and Non-Executive Directors.

Further, the Independent Directors hold a unanimous opinion that the Non- Independent Directors, including the Chairman and Managing Director bring to the Board, abundant knowledge in their respective field and are experts in their areas. The Board as a whole is an integrated, balanced and consistent unit where diverse views are expressed when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative.

17. FAMILIARIZATION PROGRAMME

The Company is required to conduct the Familiarization Programme for Independent Directors (IDs) in terms of Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to familiarize them about the Company, their roles, rights, responsibilities in the Company and various updates and notifications under Companies Act, 2013, Listing Regulations, 2015, Reserve Bank of India Guidelines and other statutes applicable to the Company.

The details of which have been given in the Corporate Governance Report annexed to this Report and also posted on the website of the Company at its web-link http://www.lnbgroup.com/kiran/investors.php

18. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on Companys business policy and strategy apart from other broad business. However, in case of a special and urgent business need, the Boards approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board Meeting.

The notice of Board Meeting is given well in advance to all the Directors. Meetings of the Board are mostly held in Kolkata. The Agenda of the Board / Committee Meetings is circulated at least 7 (seven) days prior to the date of the meeting as per Secretarial Standard on meeting of the Board of Directors (SS-1). The Agenda for the Board and Committee Meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.

The detailed information chart showing the date of the meeting of the Board and its various Committees as well as details of the Directors who attended the meeting is given in the Corporate Governance Report forming part of the Annual Report.

19. COMMITTEES OF THE BOARD

During the financial year ended March 31, 2020 the Company has eight committees as mentioned below:

a. Audit Committee

b. Stakeholders Relationship Committee

c. Nomination and Remuneration Committee

d. Corporate Social Responsibility Committee

e. Risk Management Committee

f. Loan and Investment Committee

g. Asset Liability Management Committee

h. Grievance Redressal Committee

i. IT Strategy Committee

j. IT Steering Committee

Details of the Committees along with their charters, composition and meetings held during the year, are provided in the Corporate Governance Report, forming a part of this Annual Report.

20. AUDIT COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report as annexed hereto. All the recommendations made by the Audit Committee during the year were accepted by the Board.

21. STAKEHOLDERS RELATIONSHIP COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report, forming part of this Annual Report.

22. NOMINATION AND REMUNERATION COMMITTEE

The Composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report, forming part of this Annual Report. The Nomination and Remuneration Policy is annexed hereto and forms part of this report as "Annexure B" and also posted on the website of the Company at its weblink http:// www.lnbgroup.com/kiran/policies.php

23. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The Annual Report on CSR activities including the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year, as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in the "Annexure C" to this Report. The Corporate Social Responsibility Policy has been posted on the website of the Company at its weblink http://www.lnbgroup.com/kiran/policies.php

24. DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

a. Subsidiary Companies

Sl. No. Name of the Company Relation
1 Iota Mtech Ltd. Wholly Owned Subsidiary
2 Anantay Greenview Private Ltd. Subsidiary
3 Sarvadeva Greenpark Private Ltd. Subsidiary
4 Satyawatche Greeneries Private Ltd. Subsidiary
5 Uttaray Greenpark Private Ltd. Subsidiary
6 Sishiray Greenview Private Ltd. Subsidiary
7 Magma Realty Private Ltd. Subsidiary
8 Samay Industries Ltd. Subsidiary
9 Shree Krishna Agency Ltd. Subsidiary
10 Amritpay Greenfield Private Ltd Step down subsidiary
11 Divyay Greeneries Private Ltd Step down subsidiary
12 Sarvay Greenhub Private Ltd. Step down subsidiary
13 Basbay Greenview Private Ltd Step down subsidiary
14 Sukhday Greenview Private Ltd. Step down subsidiary
15 IOTA Mtech Power LLP Step down subsidiary
16 Soul Beauty and Wellness Centre LLP Step down subsidiary

Policy for determining ‘Material Subsidiaries

The Company has adopted a Policy on Material Subsidiaries as approved by the Board. It has been posted on the website of the Company at its weblinkhttp://www.lnbgroup.com/kiran/policies.php. More details are given in the Corporate Governance Report annexed hereto.

During the year under review, there has been no change in the number of subsidiaries or in the nature of business of the subsidiaries.

b. Associate Company

Sl. No. Name of the Company
1 Placid Ltd.
2 Navjyoti Commodity Management Services Ltd.
3 The Kishore Trading Co Limited
4 LNB Renewable Energy Private Ltd

The statement in Form AOC-1 containing the salient features of the aforesaid subsidiaries has been separately annexed hereto, in terms of the first proviso to the Section 129(3) of the Companies Act, 2013, including any subsequent amendment thereto (the ‘Act) read with Rule 5 of the Companies (Accounts) Rules, 2014. Further, the contribution of these subsidiaries to the overall performance of the Company is provided under the Notes to the Consolidated Financial Statements.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013 and Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Annual Report of the Company, along with its Standalone and the Consolidated Financial Statements have been posted on the website of the Company, www.lnbgroup.com/kiran.

Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies and associates may write to the Company Secretary at the Companys registered office. The same is also available on the website of the Company www.lnbgroup.com/kiran.

c. Joint Venture

During the year under review, the Company had no joint ventures.

25. CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements has been prepared in accordance with Indian Accounting Standards notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time (‘Ind AS) along with other relevant provisions of the Act; the Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (‘the NBFC Master Directions) issued by Reserve Bank of India (RBI) and the regulatory guidance on implementation of Ind AS notified by the RBI vide notification dated 13th March 2020.

The Guidance Note on Division III - Schedule III to the Companies Act. 2013 issued by the Institute of Chartered Accountants of India ("ICAI") has been followed insofar as they are not inconsistent with any of these Directions.

These consolidated financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these consolidated financial statements.

26. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board of Directors of the Company has established a Vigil Mechanism for Directors and employees and adopted the Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to report concerns about unethical behavior, wrongful conduct and violation of Companys Code of conduct or ethics policy. The details of which have been given in the Corporate Governance Report annexed to this Report and also posted on the website of the Company at its web link http://www.lnbgroup.com/kiran/policies.php1

27. RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks that may impact key business objectives of your Company.

Your Company has adopted the Risk Management Policy in order to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed, to establish a framework for the companys risk management process and to ensure its wide implementation, to ensure systematic and uniform assessment of risks related with giving loans and making investment, to enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices and to assure business growth with financial stability.

Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed by Risk management Committee and the same is even referred to the Audit Committee and the Board of Directors of the Company, if required.

The composition and other details of the Risk Management Committee forms part of the Corporate Governance Report as annexed hereto.

28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR

The loan given, guarantee given and investment made by the Company during the financial year ended March 31,2020 are within the limits prescribed under Section 186 of the Act. Particulars of the Loans/guarantee/ advances and Investments outstanding during the financial year are fully disclosed in the Note no. 32 attached to the annual accounts which are attached with this report.

29. RELATED PARTY TRANSACTIONS

There were no materially significant related party transactions entered into by the Company which may have potential conflict with the interest of the Company. All contracts or arrangements or transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis and are reviewed by the Audit Committee of the Board.

Further, suitable disclosure as required by the Accounting Standards has been made in the Notes to the Financial Statements.

During the year under review, the Company has not entered into contracts or arrangements or transactions with related parties which comes under the purview of Section 188 of the Companies Act, 2013. Accordingly, no transactions are reported in Form no. AOC - 2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts), Rules, 2014.

The Policy on Related Party Transaction as approved by the Board has been posted on the website of the Company at its web link http://www.lnbgroup.com/kiran/policies.php.

Further, as required by Schedule V of SEBI (LODR) Regulations, 2015, disclosures of transactions with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company in the format prescribed in the relevant Accounting Standards, has been made in the relevant Notes to the Financial Statements.

30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details are annexed as "Annexure D" to the Annual Report.

Further, in accordance with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees in the Company drawing remuneration in excess of the limits set out in the said rules.

31. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Vinod Kothari & Co, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year 2019-2020. The Secretarial Audit Report for the Financial Year 2019-2020 is annexed hereto and forms part of this report as "Annexure E" which is self-explanatory. The said Report does not contain any qualification, reservation or adverse remark.

32. STATUTORY AUDITORS

M/s. Walker Chandiok& Co. LLP, Chartered Accountants, bearing Registration No. 001076N/N500013 will be completing their first term of 5 (five) consecutive years started from the conclusion of the 19th Annual General Meeting till the conclusion of the 24th Annual General Meeting. The consent has been received from M/s. Walker Chandiok & Co. LLP, Chartered Accountants, bearing Registration No. 001076N/N500013 towards appointment as the Statutory Auditors of the Company for a 2nd term of 5 (five) years from the conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting of the Company. The appointment of M/s Walker Chandiok& Co. LLP, will be in accordance with the provisions of the Companies Act, 2013.

The Board on the recommendation of the Audit Committee members recommends the appointment of M/s. Walker Chandiok & Co. LLP, Chartered Accountants, bearing Registration No. 001076N/N500013 as the Statutory Auditors of the Company for a 2nd term of 5 (five) years from the conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting of the Company to be held in calendar year 2025, subject to the approval of members at the 24th Annual General meeting of the Company. The Resolution seeking members approval on this item is included in the Notice convening the 24th Annual General Meeting.

33. AUDITORS REPORT

The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 forms part of the Annual Report.

35. CORPORATE GOVERNANCE

The Company is committed to maintaining the premier standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India and Reserve Bank of India. The Report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 forms part of the Annual Report.

The Certificate from the Statutory Auditors M/s. Walker Chandiok & Co. LLP, Chartered Accountants confirming compliance with the Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 of Corporate Governance also forms part of this Annual Report.

Further, declaration by Mr. Shreeyash Bangur, Managing Director stating that the members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct of the board of Directors and Senior Management are annexed with this Report.

36. PREVENTION OF INSIDER TRADING

During the year under review, the Board of Directors of the Company has revised the existing Code of Conduct for prevention of Insider T rading and Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information (UPSI) in view to make it in line with the amended provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information is also available on the website of the Company viz., http://www.lnbgroup.com/kiran/investors.php

37. CEO & CFO CERTIFICATION

Certificate from Mr. Shreeyash Bangur, Managing Director and Mr. Ajay Sonthalia, Chief Financial Officer, pursuant to Regulation 17(8) read with Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year under review forms part of this Annual Report.

38. ANNUAL SECRETARIAL AUDIT UNDER LISTING REGULATIONS

In line with the SEBI Circular dated February 08, 2019, an Annual Secretarial Compliance Report confirming compliance of all applicable SEBI Regulations, Circulars and Guidelines by the Company was issued by appointed M/s Vinod Kothari & Company, Practicing Company Secretaries and was filed with the Stock Exchanges.

39. DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provisions on the Directors Responsibility Statement referred in Section 134(3)(c) and 134 (5) of the Companies Act, 2013, your Directors confirm that -

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

40. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls procedures to be followed by the Company which ensure compliance with various policies, practices and statutes in keeping with the organizations pace of growth and increasing complexity of operations for orderly and efficient conduct of its business. The Audit Committee of the Board, from time to time, evaluated the internal financial control of the Company with regard to-

a. Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorization. There are well laid manuals for such general or specific authorization.

b. Systems and procedures exist to ensure that all transactions are recorded as is necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information.

c. Access to assets is permitted only in accordance with managements general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

d. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any.

e. Proper Systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Companys policies.

Based on the above, your Board is of the view that adequate internal financial controls exist in the Company.

41. SECRETARIAL STANDARD

The Company complies with all the applicable Secretarial Standard.

42. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place policy on Sexual Harassment of Women at workplace in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Committee has not received any compliant from any employee during the financial year 2019-20.

43. FRAUD REPORTING

There have been no frauds reported by the auditors of the Company under sub-section (12) of section 143 of the Companies Act, 2013 and to Central Government as per Companies Amendment Act, 2015.

44. RBI GUIDELINES - COMPLIANCE

Your Company continues to carry on its business of Non-Banking Financial Company as a Non-Deposit taking Company and follows prudent financial management norms as applicable. Your Company appends a Statement containing particulars as required in terms of Paragraph 19 of Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 alongwith the Statement of Balance Sheet disclosures for NBFCs with Assets Size of Rs. 500 crores as required in terms of Master Direction - Non-Banking Financial Company - Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.

45. MAINTENANCE OF COST RECORDS

The provisions of Section 148 of the Companies Act, 2013, with respect to maintenance of Cost records are not applicable on the Company.

46. ACKNOWLEDGEMENTS

Your Directors would like to record their appreciation of the hard work and commitment of the Company employees and are grateful for the co-operation and support extended to the Company by the Bankers, Statutory Authorities, Financial Institutions(s) and all other establishments connected with the business of the Company.

For and on behalf of the Board of Directors

Lakshmi Niwas Bangur Shreeyash Bangur
(DIN : 00012617) (DIN : 00012825)
Place : Kolkata Chairman Managing Director
Date : 15.06.2020