FUTURE OUTLOOK/ MANAGEMENT DISCUSSION AND ANALYSIS:

According to the advance estimates of national income for the year 2013-14 the growth of Gross Domestic Product (GDP) during 2013-14 is estimated at 4.9% as compared to growth rate of 4.5% in the year 2012-13 (brvious year). The Agriculture sector comprising 'agriculture, forestry and fishing' sectors is likely to show a growth of 4.6% during 2013-14 as against the brvious year's growth rate of 1.4 . In Industry sector de-growth of 0.2% is estimated in the 'manufacturing' sector as compared to the growth of 1.1% in the brvious year. The sector 'financing, insurance, real estate and business services' is expected to show a growth rate of 11.2% as compared to growth rate of 10.9% in the brvious year.

The early part of the Financial Year 2013-14 witnessed some volatility in the emerging markets in response to the Federal Reserve''s tapering, but the global economic scenario has since remained stable. While the recovery in advanced economies notably the US, has gathered steam, economic activity in most emerging market economies has remained below par.

INDIAN ECONOMY

For the first time in 25 years, the Indian economy witnessed its second successive year of below 5% growth, driven brdominantly by a decline in financial savings, low business confidence and sluggish investment demand over successive quarters, resulting in a sharp deceleration in industrial growth. Rarely has India seen a slowdown of such length and depth, and the recovery is likely to be a slow and long process.

India''s exports, buoyed by a weakened rupee, witnessed a revival of Agricultural GDP grew by 4.9% during April - December 2013 and with good winter rainfall and healthy reservoir storage, food grain production is estimated to be a record 263.2 million tonnes in 2013-14. Unseasonal rainfall in March is said to have caused some damage to crops in parts of Central and South India but the overall impact is unlikely to be significant. This is very important in the context of the company business as its majority business is in rural area and recovery is heavily dependent on this factor.

High interest rates, stubborn retail inflation and lack of policy direction, combined with uncomfortably high fiscal and current account deficits (CAD), left the Government with very few options. Faced with compulsions to rein in the fiscal deficit, government put the brakes on Plan expenditure, as a result of which investment and consumption growth declined to their lowest levels in 11 years.

Faced with sticky retail inflation, RBI was compelled to increase the repo rate by 75 bps during the year. However, with retail inflation, as measured by the CPI, dropping from 9.1% in December 2013 to 6.7% in February 2014, RBI held the policy rates steady in April 2014. Though both the fiscal deficit and CAD have narrowed, many believe that the reduction in the fiscal deficit is merely an accounting adjustment, which will catch up in the current financial year. The Balance of Payments situation however, appears to be comfortable.

The year 2013-14 witnessed continued slowdown in the automobile segment with the overall automobile segment witnessing growth of a mere 3.53%. Commercial Vehicles segment declined by 20.23% over the brvious year, Passenger Vehicles declined by 6.05%, Three-wheelers by 10.90% and only Two-wheelers grew by 7.31% . In 2013-14, the domestic two-wheeler (2W) industry had recorded sales volumes of 14.8 million units, a growth of 7.3% over the brvious year.

Our mission is to be sound NBFC among regional players in terms of product offerings, technology, service levels, risk management and audit and compliance etc. The objective is to continue building sound customer / franchises across distinct businesses so as to be a brferred provider of NBFC services for its target retail and customer segments, and to achieve a healthy growth in profitability, consistent with the company's risk appetite.

The company's range of retail financial products and excellent services and branches net work is fairly exhaustive to meet up the coming challenges. The objective is continue to build sound customer/dealer friendly atmosphere to achieve healthy growth in profitability, consistent with company's risk appetite. The company also emphasizes to develop innovative products and services that attract its Customers, Increase its market share as NBFC and financial services industry by following a disciplined growth strategy focusing on balancing quality and volume growth while delivering high quality customer service, maintain reasonably good standards for asset quality through disciplined credit risk management; and continue to develop products and services that reduce its cost of funds; and Focus on healthy earnings growth with low volatility. Our company growth is more important especially looking to the concentration in rural area for the business. The company grew its retail assets portfolio in a well balanced manner focusing on both returns as well as risk. Company intends to follow conservative view in the coming years. Company also expects continuous threats to small/medium Company like us, from global/giant players in the retail finance market especially with large size/volume, lower rate of interest and ability to sustain in the market is inevitable for the company to sustain in the market.

Overall, in spite of various pros and corns your company has demonstrated outstanding achievement in terms of earned valued and well built market brsence. Your company is cash rich, has better liquidity, improved working capital and it has shown its readiness to accept market challenges. All of these are signs of strong fundamentals which the company has been able to establish with the help of batter and professional management support.

RISK MANAGEMENT /SWOT ANALYSIS

Your company has combrhensive Risk Management System towards identification and evaluation of all potential business risks. Management has developed Risk Management Plan and reviews its implementation regularly. The company is exposed to external and internal risk associated with its business. To counter these risks, the company continues to broaden its product portfolio, increase customer profile and geographic reach.

Taking on various types of risk is integral to the NBFC business. Sound risk management and balancing risk-reward trade-offs are critical to a company's success. Business and revenue growth have therefore to be weighed in the context of the risks implicit in the company's business strategy. Of the various types of risks your company is exposed to, the most important are credit risk, market risk including liquidity risk and price risk and operational risk. The identification, measurement, monitoring and management of risks accordingly remain a key focus area for the Company. For credit risk, appropriate distinct policies and processes are in place for the retail businesses. Overall portfolio diversification and reviews also facilitate mitigation and management. Especially a small capital based company faces multiple problems due to poor recovery systems. The specific NPA provisions that the company has made continue to be more conservative than the regulatory requirements. This will help the company to maintain high standards for assets quality through disciplined credit risk management.

However, while the balance of risks in the last financial year were largely external, rising domestic interest rates as well as firm inflationary brssures have meant that domestic factors have now emerged as points of concern for growth in the current fiscal year.

SWOT analysis

Strengths

• The pioneer in the two wheeler vehicles financing sector in Gujarat/Maharashtrs

• Oldest NBFC since last 20 years.

• Sound financial position since inception

• A well-defined and scalable organisation structure.

• Strong financial track record with low Non Performing Assets (NPAs)

• Experienced and stable management team

• Strong relationships with public, private as well as banks.

Weaknesses

• The Company's business and its growth are directly linked to the GDP growth

• Small organisation structure

• Availability of cheaper fund

Opportunities

• Growth in the Two/Three Wheeler market

• Strong demand for passenger second hand car/Trucks

Threats

• Regulatory changes in the NBFC and ancillary sectors

Financial performance

As on 31st March, 2014, against hypothecation of loan stock of Rs.3771.45 lacs (brvious year Rs.3549.77), Rs.2843.15 is falling due within 12 months. Company has made provision for Non Performing Hypothecation loan stocks for Rs.6.25 lacs (brvious year Rs.4.95 lacs). Against the sundry debtors of Rs.400.84 lacs (brvious year 400.62 lacs) (over six months Rs.119.19 lacs (brvious year Rs. 121.38)), company has provided Rs.42.69 lacs (brvious year Rs.51.67) for Non Performing Trade receivables. The NPA of bad debts/hypo.loans written off is Rs.43.28 lacs while provision for doubtful/ nonperforming assets is Rs.(7.68) lacs.

INTERNAL AUDIT AND COMPLIANCE:

The Company has Internal Audit and Compliance functions which are responsible for independently evaluating the adequacy of all internal controls and ensuring operating and business units adhere to internal processes and procedures as well as to regulatory and legal requirements. The audit function also recommends improvements in operational processes and service quality. To mitigate operational risks, the Company has put in place extensive internal controls including restricted access to the company's computer systems, appropriate segregation of front and back office operations and strong audit trails. The Audit Committee of the Board also reviews the performance of the audit and compliance functions and reviews the effectiveness of controls and compliance with regulatory guidelines. The Board has formed a new audit committee considering the requirement under the Companies Act, 2013 and rules made thereunder, along with keeping in view the requirement under listing agreement.

RESOURCE MOBILATION:

As mentioned earlier, company is in constant search to avail cheaper fund to reduce our cost of funds. The cash credit limit of the company has been elevated from Rs.975 lacs to Rs.1500 lacs with the Banks.

The Company has discontinued accepting or renewing fresh deposits, therefore there no outstanding fixed deposit as on date. Inter Corporate Deposit almost remain constant from 877.25 lacs in the brvious year to Rs.881.61 lacs in current year. However utilization banks limits marginally decreased from Rs.1125.66 lacs to Rs.1008.17 lacs in current year.

CAPITAL ADEQUACY:

Your company's Capital Adequacy Ratio (CAR) stood at 53.99%, well above the regulatory minimum of 15%. The revised Guidelines issued by R.B.I for recognition of Income, asset classification, Investment accounting, provision for non-performing assets and capital adequacy have been followed by your company. The company has also made the provision for non performing assets in case of Sub-standard, doubtful and loss assets as per R.B.I. guidelines.

FIXED DEPOSITS:

As reported earlier, the Company has discontinued to accept or renewed fresh/existing fixed deposits. At the close of the year, no amount remained unclaimed. The company does not have any claimed but unpaid deposits.

DIRECTORATE:

Mr.Harshad Dalal and Mr.Kiran Patel are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. In view of change in the terms of appointment of Independent Director under the Companies Act, 2013, Mr. Kirit Dalal, Mr. Bharat Amin, Mr. Bhikhubhai Patel and Mr. Sunilkumar Patel, Independent Directors of the company shall retire and being eligible be reappointed under new terms.

It is also proposed to revise the remuneration of Mr. Deepak Patel, Managing Director as set out in the notice. None of the directors of the company is disqualified under section 164 of the Companies act, 2013.

CORPORATE GOVERNANCE:

As per clause 49 of the listing agreement with stock exchanges, your company was required to implement the code of corporate Governance. Accordingly, your company has complied in all material respects with the features of the said code. A report on the same is given separately.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956 the Directors hereby confirm that:-

(i) in the Preparation of the Annual Accounts for the Financial Year ended 31st March, 2014, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) 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 the year under review;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for brventing and detecting fraud and other irregularities; and

(iv) the Directors have brpared the Annual Accounts for the financial year ended 31st March 2014 on a 'going concern' basis.

LISTING AGREEMENT WITH STOCK EXCHANGES:

Pursuant to the provisions of listing agreement with stock exchanges, the equity shares of the company are listed at Ahmedabad (regional) and Mumbai stock exchanges.

DEPOSITORY SYSTEM:

Your company has established electronic connectivity with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. In view of the compulsory dematerialization of company's equity shares on stock exchanges, members are requested to dematerialize the shares on either of the depositories as aforesaid.

AUDITORS:

Kantilal Patel & Co. Chartered Accountants, auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting of the company and being eligible, offer themselves for reappointment.

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

As the main business of the company is of finance, the company has no activities relating to conservation of energy or technology absorption. The company has had no foreign exchange earnings or out goes during the year under review.

PARTICULARS OF EMPLOYEES:

There are no Employees covered by section 217 (2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT:

The Directors would like to place on record their sincere apbrciation to all the employees of their Continued effort towards the growth of the company and would also like to exbrss their thanks to the Bankers, Shareholders and Fixed Depositors for their support and contribution which enabled the company to achieve its goals for the year.

FOR AND ON BEHALF OF THE BOARD

Harshad Dalal

CHAIRMAN

Place : NADIAD.

Dated : 24th May 2014