Mansi Finance (Chennai) Ltd Directors Report.

Dear Members,

Your Directors have great pleasure in presenting the 24th Annual Report of the business and operations of the Company together with the audited statement of accounts for the year ended 31st March, 2018.

1. STATE OF COMPANYS AFFAIRS: (A) Financial summary or highlights:

(in Rs.)

Particulars

2017-18

2016-17

Total Income

80742839

90335712

Profit before interest, depreciation and tax

51614618

65897640

Finance cost

24897060

37354422

Depreciation

1061796

880551

Profit before Exceptional & Extra-ordinary items and tax

25655762

27662667

Exceptional & Extra-ordinary items

-

-

Profit after Exceptional & Extra-ordinary items & before tax

25655762

27662667

Provision for taxation (Net of deferred tax)

6500000

6011395

Profit after tax

19155762

21651272

Amount available for appropriation

19155762

21651272

Appropriations:
Transfer to Special Reserve u/s 45IC of RBI
Act, 1934

3831152

4330254

Transfer to General reserve

-

-

Proposed dividend

-

-

Tax on proposed dividend

-

-

Balance carried to Balance Sheet

15324610

17321018

(B) Operations:

Your Company has been able to maintain its financial position during the current year. The gross amount of loans provided by the Company stood at Rs.3635.30 Lakhs as on 31st March, 2018 as compared to Rs.4633.48 Lakhs as on 31st March, 2017.

2. EXTRACT OF ANNUAL RETURN (FORM MGT-9):

The extract of Annual Return pursuant to the provisions of sub-section (3) of section 92 read with sub-rule (1) of rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-1 and is attached to this report.

3. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

The Board met nine times during the financial year, the details of which are given hereunder. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

Quarter

Date of Board Meeting

1st April, 2017 to 30th June, 2017

01.04.2017

28.06.2017

1st July, 2017 to 30th September, 2017

12.08.2017

28.09.2017

1st October, 2017 to 31st December, 2017

15.11.2017

29.01.2018

1st January, 2018 to 31st March, 2018

12.02.2018

27.02.2018

31.03.2018

4. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement:

(a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) (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 and loss 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;

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

5. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE STATUTORY AUDITORS:

The Statutory Auditors of the Company in their report and notes forming part of the financial statements for the year ended 31st March, 2018 have stated that:

Auditors Comment:

According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income tax, Wealth tax, Custom Duty, Sales Tax, VAT, Cess and other material statutory dues in arrears / were outstanding as at 31st March, 2018 for a period of more than six months from the date they became payable. However, according to information and explanations given to us, the following dues of Income Tax have not been deposited by the Company on account of Dispute:

Particulars

Amount

Period to which amount relates Forum where the dispute pending

(Rs)

Income Tax

42,087

Financial Year 2003 – 2004 Commissioner of Income Tax (Appeals), Chennai
Income Tax

119,420

Financial Year 2004 – 2005 Commissioner of Income Tax (Appeals), Chennai
Income Tax

371,649

Financial Year 2007 – 2008 Commissioner of Income Tax (Appeals), Chennai
Income Tax

452,270

Financial Year 2011 – 2012 Commissioner of Income Tax (Appeals), Chennai
Income Tax

457,920

Financial Year 2012 – 2013 Commissioner of Income Tax (Appeals), Chennai

Boards Reply:

Your Directors would like to state that the said disputed statutory dues are pending before the Commissioner of Income Tax (Appeals), Chennai. Further, the Directors are of strong opinion that the decision at the appeal stage would be in their favour and accordingly they have not made any provision in the financial statements for the said dues.

The other observations made by the auditors in their report and notes to the accounts referred to in the Auditors Report are self-explanatory.

6. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE SECRETARIAL AUDITORS:

The Secretarial Auditors have made the following observations in their report for the year ended 31st March, 2018:

Secretarial Auditors Comment:

1. Except for general delays up to 85 days, the Company has, prima facie, been regular in filing its returns with the Registrar of Companies. Boards Reply: Your Directors are making all best efforts in filing its due statutory returns within the prescribed time. However, due to various technical difficulties and delays there are certain cases wherein the returns are filed after the due dates. Your Directors would like to assure you that they shall take steps to ensure that the due returns are filed well within the prescribed time.

Secretarial Auditors Comment:

2. The Company has not filed the Resolution for appointment of internal auditor in terms of provisions of sub-section (3) of section 117 read with sub-section (3) of section 179 and other applicable rules made under the Companies Act, 2013.

Boards Reply: Your Directors would also like to state that the Company is in the process of appointing an Internal Auditor of the Company. Your Directors are proposing to make an advertisement in the news papers for fulfilling the position with a suitable candidate.

Secretarial Auditors Comment:

3. One of the Director of the Company, namely, Shri. YUVARAJ A JAIN has been allotted two Director Identification Number (DIN) violating the provisions of section 155 of the Companies Act, 2013. Boards Reply: The above said qualification has been informed to the respective Director and the Board is hopeful that the same shall be corrected in a short span of time.

Secretarial Auditors Comment:

4. The Company has not updated its website with regard to various matters which are statutorily required to be placed on the website of the Company.

Boards Reply: Your Directors would also like to state that the Company has provided all the data to the external technical supporter for the web applications and is expecting the same to be updated shortly.

Secretarial Auditors Comment:

5. In accordance with regulation 6(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is yet to appoint a Company Secretary as its Compliance Officer.

Boards Reply: Your Directors would also like to state that the Company is in the process of appointing a Compliance officer of the Company. Your Directors have already informed the Institute of Company Secretaries of India (ICSI) about such requirement and is also proposing to make an advertisement in the news papers for fulfilling the position with a suitable candidate.

Secretarial Auditors Comment:

6. The Company has delayed in submitting the papers, documents, records, statements and information as required in terms of the listing agreement entered into with the Bombay Stock Exchange Limited.

Boards Reply: Your Directors are making all best efforts in filing its due statutory returns within the prescribed time. However, due to various technical difficulties and delays there are certain cases wherein the returns are filed after the due dates. Your Directors would like to assure you that they shall take steps to ensure that the due returns are filed well within the prescribed time.

Secretarial Auditors Comment:

7. With regard to transfer of shares by Non-Resident Indians, we were unable to verify whether the approval of Reserve Bank of India was obtained for such transfers as the documents relating to transfer of shares were not in the possession of the Company and the same were kept with the Registrar & Share Transfer Agents.

Boards Reply: Your Directors would like to state that they are confident that the Registrar and Share Transfer Agents of the Company would have complied with all the acts applicable in transferring the shares to non-residents.

Secretarial Auditors Comment:

8. The Company having employees, exceeding 20 in number, has not deducted provident fund and ESI and no such amounts were deposited with the prescribed authorities in this regard.

Boards Reply: Your Directors are planning to obtain an advanced legal opinion on the said comment by the secretarial auditor and the reply to the said comment will be provided at the venue of the Annual General Meeting.

Your Directors further assure that they will take all necessary and appropriate steps to make good the above qualifications.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The Company being a Non-Banking Finance Company (NBFC), has in the ordinary course of business made loans or advances or given guarantees or provided securities or made investments in bodies corporate and other persons during the financial year. Your Directors would like to draw your attention to the notes to the financial statements which sets out the details of loans and investments made.

8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis. The Company presents a statement of all related party transactions before the Board of Directors of the Company for their approval. Your Directors would like to draw your attention to the notes to the financial statements which sets out related party disclosures. A statement in Form AOC-2 pursuant to the provisions of clause (h) of sub-section (3) of section 134 of the Act read with sub-rule (2) of rule 8 of the Companies (Accounts) Rules, 2014 is furnished in Annexure-2 and is attached to this report.

9. DETAILS OF AMOUNTS TRANSFERRED TO RESERVES:

The Company has transferred a sum of Rs.3831152/- to statutory reserves u/s 45IC of the RBI Act, 1934 during the financial year. The closing balance of such reserve fund as on 31st March, 2018 was Rs.33843406/-

10. DIVIDEND:

In view of requirement of working capital, your directors do not recommend any dividend for the financial year ended 31st March, 2018.

11. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION

AND PROTECTION FUND:

The Company was not required to transfer any amounts in unpaid dividend account, application money due for refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund.

12. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE

FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT (01/04/ 2018 to 29/05/2018):

There were no material changes and commitments affecting the financial position of the Company between the period 1st April, 2018 to 29th May, 2018.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER SECTION

134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014:

In terms of clause (m) of sub-section (3) of section 134 of the Companies Act, 2013 and the rules framed thereunder, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is given below:

1). CONSERVATION OF ENERGY:

(i) the steps taken or impact on conservation of energy; Your Company is not engaged in any manufacturing activity and thus its operations are not
(ii) the steps taken by the company for utilising alternate sources of energy; energy intensive. However,
adequate measures are always taken to ensure optimum utilization and maximum possible
(iii) the capital investment on energy conservation equipments; saving of energy.

2). TECHNOLOGY ABSORPTION:

(i) the efforts made towards technology absorption;
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution;
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) -
(a) the details of technology imported; The Company has no activity relating to technology absorption.
(b) the year of import;
(c) whether the technology has been fully absorbed;
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof, and
(iv) the expenditure incurred on Research and Development

3). FOREIGN EXCHANGE EARNINGS AND OUTGO:

(Amount in Lakhs)

Particulars

2017-18

2016-17

Value of exports calculated on FOB basis

Value of Imports calculated on CIF basis:
Raw Materials

Components and Spare parts

Capital Goods

Expenditure in Foreign Currency:
Travel

Others

14. DETAILS OF CHANGE IN NATURE OF BUSINESS, IF ANY:

There was no change in the nature of business of the Company during the financial year.

15. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Companys Articles of Association,

Smt. SAJJAN KANWAR BAFNA (DIN: 00007725), retires by rotation at the forthcoming Annual General Meeting, and she being eligible, offers herself for re-appointment. The Board recommends the re-appointment.

16. EVALUATION OF THE BOARDS PERFORMANCE:

In compliance with the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board, its Committees and individual

Directors was carried out during the year under review. Questionnaire approach was adopted for said evaluations.

The Nomination and Remuneration Committee (NRC) at its meeting carried out a separate exercise for evaluating every Directors performance. The evaluation of Independent Directors was carried out without the presence of that Director. A separate meeting of the Independent Directors was convened which reviewed the performance of the Board (as a whole), the Non-Independent Directors and the Chairman.

Some of the key criterias for performance evaluation were as follows:

Performance evaluation of Board and Committees:

1. Degree of fulfillment of key responsibilities;

2. Board structure and composition;

3. Effectiveness of Board processes, information and functioning;

4. Board Culture and Dynamics;

5. Quality of relationship between the Board and the Management;

6. Establishment and delineation of responsibilities to committees.

Performance evaluation of Directors:

1. provide meaningful and constructive contribution and inputs in meetings;

2. display a good degree of understanding of the Company, industry, sector, geography;

3. display independence of judgment.

17. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Independent Directors of the Company are persons of integrity, possessing rich experience and expertise in the field of corporate management, finance, capital market, economic and business information.

The Company has issued appointment letter to the Independent Directors setting out in detail, the terms of appointment, duties, roles & responsibilities and expectations from the appointed Director. The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors / Audit Committee / Nomination & Remuneration Committee / Stakeholders Relationship Committee on various related matters, where Directors have interactive sessions with the Management.

18. SUBSIDIARY:

The Company does not have any subsidiary companies or associate companies or joint ventures.

19. INTERNAL FINANCIAL CONTROLS:

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weaknesses in the design or operation were observed.

20. DEPOSITS:

The Company has neither accepted nor renewed any deposits during the financial year and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

21. MATERIAL ORDERS PASSED BY REGULATORY AUTHORITIES:

There are no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status and Companys operations in future.

22. RISK MANAGEMENT POLICY:

Risks are events, situations or circumstances which may lead to negative consequences on the Companys businesses. Risk Management is a structured approach to manage uncertainty. Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Although the Company does not have a formal risk management policy but a formal enterprise-wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework. The Company has laid down a Comprehensive Risk assessment and minimization procedure which is reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risks through means of a properly defined framework. Key business risks and their mitigation are also considered in the annual / strategic business plans and in periodic management reviews.

23. DETAILS OF REVISION OF FINANCIAL STATEMENTS:

There was no revision of the financial statements of the Company during the financial year.

24. SHARES AND SHARE CAPITAL:

a. CAPITAL STRUCTURE:

The Authorised Share Capital of your Company is Rs.55000000/-comprising of 5500000 Equity Shares of Rs.10/- each and the Paid-up Share Capital is Rs.35349000/- comprising of 3534900 Equity Shares of Rs.10/- each.

b. BUY-BACK OF SHARES:

The Company has not bought back any of its securities during the financial year.

c. SWEAT EQUITY:

The Company has not issued any Sweat Equity Shares during the financial year.

d. BONUS SHARES:

No Bonus Shares were issued during the financial year.

e. EMPLOYEES STOCK OPTION PLAN:

The Company has not provided any Stock Option Scheme to the employees during the financial year.

25. STATUTORY AUDITORS:

Pursuant to the provisions of section 139 of the Act and the rules framed thereafter, M/s. PEMMASANI & CO (FRN: 002630S), Chartered Accountants, Chennai, were appointed as statutory auditors of the Company from the conclusion of 23rd Annual General Meeting (AGM) of the Company held on 30th September, 2017 till the conclusion of the 27th AGM to be held in the year 2022, subject to ratication of their appointment at every AGM. The Company has also received confirmation from the firm that their appointment will be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013.

26. SECRETARIAL AUDITORS:

In accordance with the provisions of section 204 of the Companies Act, 2013, the Board has appointed M/s. MUNDHARA & CO, Company Secretaries in Whole-time Practice, Chennai as the Secretarial Auditor for the financial year 2017-18. The report of the Secretarial Auditor is annexed to this report.

27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Companys premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has adequate measures including checks and corrections in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

The following is a summary of sexual harassment complaints received and disposed off during the financial year:

- No. of Complaints received :

NIL

- No. of Complaints disposed off :

NIL

- No. of cases pending for more than 90 days :

NIL

- No. of workshops / awareness programmes carried out:

ONE

- Nature of action taken by the employer / DO :

Not Applicable

28. RESERVE BANK OF INDIA REGULATIONS:

Your Company is generally complying with the directions of the Reserve Bank of India regarding prudential norms of accounting, capital adequacy ratio, provisions for bad and doubtful debts and other requirements as per the directions issued from time to time.

29. CORPORATE GOVERNANCE:

Report of Corporate Governance for the financial year and Management Discussion and Analysis are forming part of this Annual report.

30. COMPOSITION OF AUDIT COMMITTEE:

The Board has constituted the Audit Committee, which comprises of Shri. MAHESH TATED as Chairman and Shri. YUVARAJ A JAIN and Smt. SAJJAN KANWAR BAFNA as the members. More details on the committee are given in the Corporate Governance Report.

31. LISTING AT STOCK EXCHANGE:

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange Limited. The annual listing fee for the year 2018-2019 has been paid to the Exchange.

32. CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF

CORPORATE GOVERNANCE UNDER THE LISTING AGREEMENT AND THE SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS, 2015:

A certificate from the Statutory Auditors of the Company regarding compliance with the Code of Corporate Governance is forming part of this annual report.

33. MANAGEMENTS DISCUSSION AND ANALYSIS:

In terms of the provisions of regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the required Managements Discussion and Analysis is set out in this Annual Report.

34. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

35. EMPLOYEE REMUNERATION:

The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of sub-section 12 of section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report and are annexed as Annexure-3 to this report.

36. CORPORATE SOCIAL RESPONSIBILITY:

The provisions of section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company.

37. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the dedicated and untiring hard work put by the employees at all levels. Your Directors would like to thank the banks, consultants, auditors and above all the shareholders and valued customers for their continued support and patronage.

For and on behalf of the Board

(SURESH BAFNA)

(MAHESH TATED)

Chairman & Managing Director

Director

DIN: 00056152

DIN: 00488121

Old No. 22, New No. 45,

No.10/33,

Mulla Sahib Street,

Arumugam Street,

Sowcarpet,

Chennai–600 001.

Chennai–600 079.

Place: CHENNAI Date : 29.05.2018