Paragon Finance Ltd Directors Report

To the Members of Paragon Finance Limited

Dear Members,

The Board of Directors hereby presents the 38th Annual Report on the business and operations of your Company for the year ended 31st March, 2024.

FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars	2023-24	2022-23
Total Income	363.24	182.61
Gross Profit	363.24	182.61
Less: Interest	3.30	2.76
Less: other expenses	236.54	203.82
Cash profit	123.4	(23.97)
Less: Depreciation	11.00	14.91
Less: Other non cash expenses	8.19	(29.24)
Profit/loss before tax	104.22	(9.64)
Less: Prov for tax	0.00	0.00
Less: Transfer from prov. For deferred tax	18.32	3.42
Add: Tax of earlier Year	0.00	0.00
Profit after tax	85.90	(13.06)
Add: Other comprehensive Income	222.61	(23.52)
Total Comprehensive Income	308.51	(36.58)
Add: Profit b/f	1615.37	1651.89
Profit available for appropriation	1701.27	1638.83
Less: Transfer to statutory reserves	17.18	0.00
Add: Fair Value Gain through OCI	247.94	(27.76)
Less: Tax Impact of Fair Value Gain through OCI	-25.33	4.24
Balance credited to balance sheet	1906.7	1615.32
Reserve excl. revaluation reserve	644.40	627.22

DIVIDEND

The Board has not recommended any dividend for the year.

STATE OF THE COMPANYS AFFAIRS

Paragon Finance Limited is a company engaged in the business of providing loans against hypothecation of vehicles.

The Income from Operation for the Financial year 2023-24 was Rs. 363.24 Lakhs which is significantly higher than the Income from operations of Rs.182.61 in 2022- 23. The Shareholders Funds as on 31.03.2024 were Rs. 2976.10 Lakhs reflecting the inherent financial strength of the Company.

The Financial Statements of your Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Indian Accounting Standards (IND AS) and the relevant provisions of the Companies Act, 2013 and rules made therein, as applicable and guidelines issued by the Securities and Exchange Board of India (SEBI) and guidelines and circulars issued by the Reserve Bank of India from time to time. Accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis.

RESERVE BANK OF INDIA (RBI) CLASSIFICATION

The Reserve Bank of India (RBI) has classified your Company as an NBFC - Investment and Credit Company (NBFCICC) within the overall classification of Non-Banking Financial Institution.

Pursuant to the "Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 issued by the Reserve Bank of India (RBI) on October 19, 2023, the Company falls under the category of NBFCs - Base Layer (NBFC - BL) entity.

PROMOTERS GROUP SHAREHOLDING

As on March 31, 2024 , the total shareholding of the Promoters Group of your Company is 72.79 per cent and none of the Promoter/Promoters Group shareholding is under pledge. Further, in compliance with Regulation 31(2) of SEBI Listing Regulations, 2015, the entire shareholding of promoter(s) and promoter group is in dematerialized form.

Pursuant to the Share Purchase Agreement dated 25th July, 2024 entered into by some of the Promoters and the Promoter group of the Company, 51.47 % shares of the Company will be transferred to the Acquirer (Apple Equifin Pvt. Ltd) acting along with Persons acting in Concert (GKML Software Pvt. Ltd and Sunkesula Infra LLP), subject to approval of SEBI and No Objection Certificate of RBI. The acquirer along with PAC have given an Open Offer of 26% to the Public Shareholders on 25.07.2024, a copy of which is available on the website of BSE. The Detailed Public Statement was submitted to BSE and SEBI on 01.08.2024 and the Draft Letter of Offer was submitted on 08.08.2024.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and the date of this report.

EXTRACT OF ANNUAL RETURN

In terms of the Companies Act, 2013 as amended, the Annual Return is available on https://www.paragonfinanceltd.com/fstatements.htm

DETAILS OF SUBSIDIARY/ASSOCIATE COMPANY/ JOINT VENTURE

The Company does not have any Subsidiary, Joint Venture or an Associate Company.

DETAILS OF BOARD MEETINGS

During the year, 13 (Thirteen) number of Board meetings were held as on 19.04.2023, 29.05.2023, 19.06.2023, 11.08.2023, 21.08.2023, 29.08.2023, 01.09.2023, 27.09.2023, 06.11.2023, 30.11.2023, 02.01.2024, 31.01.2024 and 07.02.2024. The other details have already been mentioned in the Corporate Governance Report which forms a part of this Annual report.

COMMITTEES OF BOARD

The details of composition of the Committees of the Board of Directors are as under:-

1. Audit Committee

Sl. No.	Name	DIN	Chairman/ Members
1	Mrs. Anny Jain	06850978	Chairperson
2	Mrs. Parul Surana	06948926	Member
3	Mr. Sanjay Kumar Gupta	00213467	Member

During the year, the Committee had met on 29.05.2023, 11.08.2023, 06.11.2023 and 07.02.2024

2. Nomination & Remuneration Committee

Sl. No.	Name	DIN	Chairman/ Members
1	Mrs. Anny Jain	06850978	Chairperson
2	Mrs. Parul Surana	06948926	Member
3	Mr. Sanjay Kumar Gupta	00213467	Member

During the year, the Committee had met on 23.08.2023 and 09.02.2024

3. Stakeholders Relationship Committee

Sl. No.	Name	DIN	Chairman/ Members
1	Mrs. Anny Jain	06850978	Chairperson
2	Mr. Sanjay Kumar Gupta	00213467	Member
3	Mr. Aloke Kumar Gupta	00825331	Member

During the year, the Committee had met on 12.06.2023 Vigil mechanism

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for Directors and employees to report genuine concerns has been established. To strengthen its policy of corporate transparency, the Company has established an innovative and empowering mechanism for employees. Employees can report to the management their concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy.

Paragon Finance Limited, being a Listed Company has established a Vigil (Whistle Blower) Mechanism and formulated a Policy in order to provide a framework for responsible and secure whistle blowing/vigil mechanism. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provision of section 134 (3) (c) of the Companies Act, 2013 the Directors give hereunder the Directors Responsibility Statement relating to the Accounts of the Company:

(1) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(2) The Directors have 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 as at March 31, 2024 and of the Profit and Loss of the Company for the said period;

(3) 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;

(4) The Directors had prepared the annual accounts on a going concern basis; and

(5) 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.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Anshul Goenka was appointed on the Board as an Independent Director who was approved by the members at the Annual General meeting held on 29.09.2023.

In Compliance with clause 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, brief resume, expertise and other details of the Independent Director proposed to be appointed were attached to the Notice of the ensuing Annual General Meeting.

Pursuant to approval of shareholders at the Annual General Meeting held on 27.09.2023, Mr. Sanjay Kumar Gupta was appointed as the Chairperson of the Board and Mr. Aloke Kumar Gupta became the Executive Director of the Company.

Mrs. Anny Jain was re-appointed as an Independent Director of the Board till 27.09.2027.

The Current Composition of the Board is an optimum mix of Executive and Non-executive Directors. Mr. Sanjay Kumar Gupta is the Chairperson and Whole-time Director of the Company. Mr. Aloke Kumar Gupta is also the Executive Director. There are 3 Non-executive Independent Directors -

1. Mrs. Anny Jain

2. Mrs. Parul Surana

3. Mr. Anshul Goenka

Mr. Sanjay Kumar Gupta is the Company Secretary and Mr. Aloke Kumar Gupta is the Chief Financial Officer of the Company.

RISK MANAGEMENT POLICY

In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to business objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuous basis. They are discussed at the meetings of the board of Directors of the Company.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by statutory as well as Internal Auditors. Significant Audit observations and follow up actions thereon are reported to the Board. The Board of Directors review adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the 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 Clauses of SEBI (LODR) regulations, 2015.

COMPANYS POLICY ON APPOINTMENT AND REMUNERATION

The current policy is to have an appropriate mix of executive and Independent Directors to maintain the independence of the board, and separate its functions of governance and management. As on 31st March, 2024, the board consists of five members, one of whom is Chairperson, Executive or Whole time Director and KMP, one of whom is Executive Director and KMP and three are Independent Directors. The Board periodically evaluates the need for change in its composition and size.

The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013 adopted by Board is annexed to the Boards Report. We affirm the remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

No significant or material orders were passed by the Regulators or courts or Tribunals which impact the going concern status and Companys operation in future.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the year 2023-24 from the public/shareholders.

INTERNAL FINANCIAL CONTROLS

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company. Details are given in Management Discussion & Analysis Report.

STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

M/s. Mandawewala & Co., Chartered Accountants (FRN: 322130E), Kolkata, Statutory Auditors of the Company, shall hold office till the conclusion of the 41st Annual General Meeting of the Company to be help in the year 2027.

Further, the report of the Statutory Auditors along with notes forming part of the Companys accounts as given under Notes (No. 1 - 30) are enclosed to this report. The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments.

INTERNAL AUDITOR

M/s. ASRK & Associates (FRN: 328681E) has been appointed as the Internal Auditor of the Company.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 34 of the SEBI (LODR) Regulations, 2015, the Cash Flow Statement for the year 2023-24 is annexed hereto.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Details of loans, guarantees and investments under Section 186 of the Companies Act has been given in Notes to Accounts.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website - https://www.paragonfinanceltd.com/code.htm

Your Directors draw attention of the members to Note 27 to the financial statement which sets out related party disclosures.

SECRETARIAL AUDIT

In terms of Section 204 of the Act and Rules made there under, Priti Agarwal (Membership No. F10877), Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure 1 to this report. The report is self-explanatory and do not call for any further comments.

LISTING

The Companys shares are listed with BSE having nationwide trading terminal under SEBI (ICDR) Regulations, 2009. The Listing fees to the Stock Exchanges for the year 2023-24 have been paid. The address of the said Stock Exchange is as follows:

The Bombay Stock Exchange Phiroze Jeejeebhoy Towers,

Dalal Street, Fort Mumbai - 400001.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis has been annexed to this report in terms of Part B of Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in Annexure 2.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure 3 to this Report.

Pursuant to rule 5(2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there is no such employee meeting the criteria under this rule.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by The Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the SEBI (LODR) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Auditor confirming compliance with the conditions of Corporate Governance is attached and is forming the part of the Annual Report.

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

The Company does not engage in any manufacturing activity so there is no consumption of energy. The activities of the Company do not involve any technology absorption.

Foreign Exchange Earning and Outgo	(In Lakhs)
Foreign Exchange Earnings	NIL
Foreign Exchange outgo	NIL

BOARD EVALUATION

The board of Directors has carried out an annual evaluation of its own performance, Board committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed under SEBI (LODR) Regulations, 2015 as amended and Companies Act, 2013.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

ARCHIVAL POLICY

As per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 every listed Company is required to formulate an Archival Policy for the records which it maintains in Electronic Form. The said policy is available of the Companys website at https://www.paragonfinanceltd.com/code.htm

ID FAMILARISATION PROGRAMME

Independent Directors have been given adequate Documents and Annual Reports so that they get an understanding regarding the working of the Company.

The IDs have also met the stakeholders of the Company so as to get a detailed understanding regarding the Business, which would able them to form an Independent view regarding the Company.

DEMAT SUSPENSE A/C

There are no shares in demat suspense account or unclaimed suspense account as on 31.03.2024. CORPORATE SOCIAL RESPONSIBILITY

Your Company does not fall under the compulsory compliance of CSR u/s 135 of the Companies Act 2013.

DISCLOSURE UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION & REDRESSAL) ACT, 2013

The Company is committed to provide a safe and conducive work environment to its employees. During the year under review, no case of sexual harassment was reported.

DETAILS OF LITIGATIONS OF THE COMPANY

The details of the suits filed by the Company or filed against the Company which are still pending to be decided by the Court are disclosed in Note No. 28 of Notes to Account. Please refer the same for details.

The Company had made an application against a Financial Debtor under the Insolvency and Bankruptcy Code, 2016 in the year 2019 under Case No. 1685/2019 which is under consideration by the Honble Division Bench of NCLT, Calcutta.

ACKNOWLEDGEMENT

The Board of Directors would like to place on record their grateful appreciation of the cooperation and assistance received from the Companys customers, shareholders, employees, brokers, dealers, banks, financial institutions and all others associated with the Company.

Your Directors also thank the Central and State Governments, and other statutory authorities for their continuous support.

On behalf of the Board of Director	Sd/-
Place: Kolkata	Sanjay Kumar Gupta
Date: 27.08.2024	Whole-time Director
	DIN-00213467