DIRECTORS' REPORT

TO

THE MEMBERS,

Your Directors have pleasure in presenting the 32nd Annual Report along with the Audited Accounts for the financial year ended March 31, 2015.

HIGHLIGHTS:

The company is mainly engaged into Investment and Finance activities. Over the reporting period, the total income of the company has increased to Rs. 745.60 Lacs from Rs. 562.67 Lacs as compared to previous financial year. The growth performance for financial year 2014-15 was affected by global economic and financial challenges all around the world including India. Henceforth every sector and company's performance and profitability suffered. The capital spending was at lower side. The company has incurred net loss of Rs. 191.10 during the year as compared to 3.28 net profit in previous year. The main attributes for incurring such huge loss mainly due to Tax Demand raised by the Income tax Authority of Rs.1.5 Crores for the previous and high administrative and business running expenses.

The management of the Company hereby very optimistic regarding performance of the Company in furture and taking every steps and making every efferts to turn the Company in to profitable organization

DIVIDEND:

During the year, company incurred losses; your directors have not recommended any dividend on Equity Shares for the year under review.

BDARD OF DIRECTORS:

The Composition of the Board during the year as per the provisions of Clause 49(IIA) read with the Companies Act, 2013. During the period under review, Mr. Tushar Ramchandra Rane, Mrs. Madhu Rajkumar Goel and Mr. Dauji Chaturvedi had resigned from the Board with effect from 24th March 2015 and 28th May 2015 respectively due to their preoccupations somewhere else. The Board places on record their appreciation and gratitude for their guidance and contribution during their association with the Company.

On the recommendation of Nomination and Remuneration Committee, your Board inducted Ms. Seema Nirmalsingh Sidhu and Mr. Jatinkumar Chintamani Agarrwal as an Additional Directors of the Company in the category of Independent Director with effect from 24th March, 2015 in order to comply with the requirement of Section 149(1) of the Companies Act, 2013. In terms of Section 161 of the Companies Act, 2013 she will hold office up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing along with deposit pursuant to Section 160 of Companies Act, 2013, proposing the appointment of Ms. Seema Sidhu and Mr. Jatinkumar Agarrwal, Directors of the Company. Your Board has recommended the appointment of Ms. Seema Sidhu and Mr. Jatinkumar Agarrwal asIndependent Directors of the company for a period of five consecutive years up to the fifth consecutive Annual General Meeting of the Company, not liable to retire by rotation.

During the year Pursuant to Section 152 of the Companies Act, 2013 Mr. Girraj Kishor Agrawal, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Your Board has recommended his re-appointment.

Ms. Seema Sidhu and Mr. Ashwin Shah have given declarations that they continues to meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

As required under clause 49 of the listing agreement with the stock exchanges, the information on the particulars of Directors proposed for appointment/re-appointment has been given in the notice of annual general meeting.

DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 (1) and 74 of the Companies Act, 2013 read together with the companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 (3) (c) of the Companies Act, 2013, and based on the information provided by management, your Directors' state that:

a)In the preparation of the annual accounts for the financial year ended 31st March, 2015 the applicable accounting standards have been followed.

b)Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the State of affairs of the corporation as at the end of March 31, 2015 and of the profit of the Company for the year ended on that date.

c)Proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d)The Annual Accounts of the Company have been prepared on the ongoing concern basis.

e)That they have laid down internal financial controls commensurate with the size of the Company and that such financial controls were adequate and were operating effectively.

f)That system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively.

DECLARATION OF INDEPENDENCE BY DIRECTORS:

The Independent Non-executive Directors of the Company, viz. Mr. Ashwin Jayantilal Shah and Ms. Seema Nirmalsingh Sidhu have affirmed that they continue to meet all the requirements specified under Clause 49(I)(A)(iii) of the listing agreement in respect of their position as an "Independent Director" of Banas Finance Limited.

POLICIES ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The policies 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 Act is appended as Annexure I to this Report.

EVALUATION OF BOARD OF DIRECTORS:

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee of the Board carried out the annual evaluation of the performance of the Board as a whole, the Directors individually as well as of various Committees of the Board. The performance evaluation of the Independent Directors was carried out by the Nomination and Remuneration Committee and noted in turn by the Board.

STATUTORY AUDITORS:

M/s. Pravin Chandak & Associates, Chartered Accountants having Registration No. 116627W, who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2015-16. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Pravin Chandak & Associates, that their appointment, if made, would be in conformity with the limits specified in the said Section.

AUDITORS REPORT:

Observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments under Section 134 (1) of the Companies Act, 2013.

COMMENTS ON REMARKS/OBSERVATION/QUALIFICATION MADE BY STATUTORY AUDITORS:

M/s. Pravin Chandak and Associates, Practicing Chartered Accountant, in his Independent Auditor Report for financial year 2014-15 have drawn the attention of the management on some Prudential Norms of NBFC, which have been marked as qualification in his report. In connection with the same management here with give the explanation for the same as follows:

Your Company is Small NBFC, as compare to other giant in market. Company had not accepted any deposits from public. The Company is doing business out of its own fund. The Company operates its business with at most care and diligence. As far as making of Loan and Advances are concerned, management grants demand loan only either to the parties known to the Company or by reference which are governed by the Board policies. Considering the close monitoring of Board no appraisal, renewal, Policies and Procedure, therefore in some cases loan agreements or some KYC were not maintained. However your Directors are of a view that the Company has maintained all basic and necessary documents, but according to the auditor the documents are not appropriate/enough. The Company is under process to make KYC documents in line with auditor's directions, for all future loan agreement and contracts to be entered.

The Loans and Advances granted by the Company is cosidered as good and recoverable and do not required any provisions and same has been closely supervised and monitered on regular basis and proper internal control is on place.

The management of the Company is quite confident that there is/was no NPA. The Company grants unsecured loan either to the parties to whom Company knows personally or to the parties, whose reference has been received from, some parties with whom Company has already done the business. Though the repayment of the loan and interest there on might have been delayed some time by the parties, but Company do receive the payment on later date.

The Company has received Order u/s 143(3) of Income Tax Act, 1961 dated 28/03/2014 for an outstanding income tax demand of Rs.7,74,50,120/- pertaining to A.Y. 2011-12 in reply of the same Company has filed appeal before CIT(A) on 04/04/2014, the Income Tax department has granted stay on the order of demand and directed Company to pay installment of Rs.15,00,000/- for ten months from June 2014 to March, 2015 till further order.

The Company has also received the notice u/s 154 of Income Tax Act, 1961 dated 21/08/2014, charging interest of Rs.2,36,52,216/- u/s 234B in addition to demand. As far as contingent liability of Rs.7,74,50,120/- is concerned, the same is not provided as the management feels that the demand raised is likely to be either deleted or substantially reduced as the company has filed appeal in response to the demand raised by the Assessing Officer deposited tax of Rs. 1,50,00,00 in response to the demand raised by the assessing officer and accordingly no provision is considered.

SECRETARIAL AUDIT:

Pursuant to the requirements of Section 204(1) of the Act, and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P.D. Pandya & Associates, Company Secretary in Practice to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report as received from M/s. P.D. Pandya & Associates is appended to this Report as Annexure II.

COMMENTS ON REMARKS/OBSERVATION/QUALIFICATION MADE BY SECREATARIRAL AUDITORS:

M/s. P.D. Pandya and Associates, Company Secretary in Practice, in his Secretarial Audit Report for financial year 201415 have drawn the attention of the management on some the non-compliances, which have been marked as qualification in his report. In connection with the same management herewith give the explanation for the same as follows:

As pointed out by our Secretarial Auditors in their report, it was a matter of fact that Income Tax Authority had conducted income tax search on 9th June, 2015 and 10th June, 2015. During their search they had confiscated Minutes Books and certain other documents for their reference due to which the company could not produce physical copy of the Minutes Books to the secretarial auditor for their verification. However, the soft copy of the minutes was produced before the auditor and the same was verified by them.

As far as the appointment of Internal Auditor and Internal Control is concerned, The Management of the Company is of a view that the Company's size is very small as compared to its peer group companies, the Company has already in place Risk Management Policy to cope up with unforeseeable threats, risks and frauds. The management thinks that Company has adequate Internal Control System commensurate with the size of the Company and the Statutory Auditor also conduct test audit on quarterly basis and submit the limited review certificate and draws the attention of the management on concerned matters. However the Management also ensures to strengthen the Internal Control System of the Company. However to make good of said default Company has appointed M/s. A M Gohel & Co., as Internal Auditor of the Company in current financial year for conducting periodic internal audit in compliance of Section 138 of Companies Act, 2013.

Mr. Girraj Kishor Agarwal, Director of the Company, also the Manging Director of M/s. Tilak Finance Limited and M/s. Banas Finance Limited, a group companies. As all these Companies is being operated from the same place, which will allows him to devote full time to all companies by sitting at same place, with the view of the same Mr. Girraj Kishor Agrawal was also appointed as CFO of the Company. However the same contravenes the provision of section 203 of Companies Act, 2013 that one person cannot held position of KMP in more than one Company. To ensure the Compliance with said section Company has suggested to Mr. Girraj Kishor Agarwal to take resignation from the post of CFO of the Company and confirmed with Mr. Girraj Kishor Agarwal.

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS:

The reports on Corporate Governance and Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement form part of the Annual Report. The certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is annexed to the Corporate Governance Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 are appended as Annexure III.

EXTRACT OF ANNUAL RETURN:

Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is given in the Report as Annexure IV.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION:

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are provided in the Annual Report. The disclosures as specified under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been appended to this Report as Annexure V.

POSTAL BALLOT:

No postal ballot was held during the year 2014-2015.

RISK MANAGEMENT AND INTERNAL CONTROLS:

The Company has the risk management and internal control framework in place commensurate with the size of the Company. However Company is trying to strengthen the same. The details of the risks faced by the Company and the mitigation thereof are discussed in detail in the Management Discussion and Analysis report that forms part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the Investments covered under the provisions of Section 186 of the Companies Act, 2013 (Act) will be produced for verification to the members at the registered office of the Company on their request.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The Company, being a non-banking finance company (NBFC), does not have any manufacturing activity. The directors, therefore, have nothing to report on 'conservation of energy and technology absorption'.

FOREIGN EXCHANGE:

There is no inflow and outflow of Foreign Exchange.

LISTING OF SHARES:

Equity shares of your Company are listed on Bombay Stock Exchange only and the Company has paid the necessary Listing fees for the year 2015 - 2016.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established a vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the Management, the concerns about behavior of employees that raise concerns including fraud by using the mechanism provided in the Whistle Blower Policy. The details of the said Policy are included in the Report on Corporate Governance which forms part of the Annual Report.

During the financial year 2014-15, no cases under this mechanism were reported in the Company and any of its subsidiaries/ associates.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The company has framed policy in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year 2014-15, no cases in the nature of sexual harassment were reported at any workplace of the company.

The Chief Executive Officer and Chief Financial Officer Certification as required under Clause 49 of the Listing Agreements and Chief Executive Officer declaration about the Code of Conduct is Annexed to this Report.

The Board of Directors wishes to express sincere thanks to Bankers, Shareholders, clients, Financial Institutions, customers, suppliers and employees of Companies for extending support during the year

FOR & ON BEHALF OF THE BOARD

Sd/-Girraj Kishor Agrawal

(Director & CFO)

Place: Mumbai

Date: 10/08/2015