Classic Electricals Limited is a Mumbai-based financial services firm listed on the **Bombay Stock Exchange (BSE)**. Established in **1985**, the company operates as a specialized entity within the **Financing and Leasing** sector. While historically maintaining a stable operational profile, the company is currently navigating a significant transition period characterized by capital restructuring, leadership renewal, and rigorous efforts to resolve historical regulatory non-compliance. --- ### **Core Business Operations & Asset Profile** The company operates a streamlined business model focused exclusively on financial services. * **Primary Segment:** The company operates under a **single primary segment** (Finance and Leasing). Consequently, segment-wise reporting is not applicable to its financial disclosures. * **Asset Management:** The company maintains a lean balance sheet. It holds no **intangible assets**. All **Property, Plant, and Equipment (PPE)** are subject to regular physical verification, and the company maintains proper records for all holdings. * **Real Estate Ownership:** All title deeds for immovable properties are held directly in the **name of the Company**, ensuring clear asset ownership. * **Accounting Standards:** Financial statements are prepared in strict accordance with **Indian Accounting Standards (Ind AS)** as specified under **Section 133** of the Companies Act, 2013. --- ### **Strategic Capital Restructuring & MPS Compliance** A central pillar of the company’s current strategy is the alignment of its shareholding structure with the **Minimum Public Shareholding (MPS)** mandate required by Indian regulators. #### **The 5:1 Bonus Issue** To comply with the **SEBI Order dated June 4, 2013**, and **Regulation 38** of SEBI (LODR) Regulations, the company executed a targeted bonus issue designed to dilute promoter concentration without a secondary market sale. * **Ratio and Execution:** The company issued **5** new fully paid-up equity shares for every **1** existing equity share held. * **Targeted Allocation:** The issue was restricted exclusively to **Non-Promoter/Public shareholders**. The Promoters and Promoter Group voluntarily **foregone their entitlement** to these shares to facilitate the increase in public float. * **Capitalization Details:** A sum of **Rs. 42,03,750** was capitalized from free reserves or permitted surplus to fund the issuance of **4,20,375** equity shares (par value **Rs. 10/-**). #### **Evolution of Shareholding Structure** The bonus issue successfully shifted the company toward regulatory compliance: | Category | Pre-Issue Shareholding | Post-Issue Shareholding | | :--- | :--- | :--- | | **Promoter & Promoter Group** | **94.30%** | **73.53%** | | **Public Shareholding** | **5.70%** | **26.47%** | | **Regulatory Requirement** | **25.00%** | **25.00%** | Following this allotment on **October 7, 2024**, the company’s total paid-up capital increased from **Rs. 1,48,52,100** to **Rs. 1,90,55,850**. The **Authorised Capital** remains at **Rs. 5,00,00,000** (**50,00,000** shares). --- ### **Financial Performance & Solvency Metrics** The company has recently experienced earnings volatility, transitioning from a profitable state to a net loss, which has influenced its short-term dividend policy. #### **Three-Year Financial Summary** *(All figures in **Rs. Lakhs** unless otherwise stated)* | Particulars | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Income** | - | - | **111.00** | | **Net Profit / (Loss)** | **(19.06)** | **19.83** | **63.49** | | **Total Equity** | **1,164.61** | **1,183.67** | **1,163.85** | | **Net Debt** | **107.42** | **53.70** | **53.73** | | **Net Gearing Ratio** | **0.09** | **0.05** | **0.05** | #### **Key Financial Policies** * **Dividend Status:** Due to the reported loss in the most recent fiscal year (**FY 2024-25**), the Board of Directors did not recommend a dividend. * **Leverage and Liquidity:** The company maintains a conservative debt profile with a **Net Gearing ratio of 0.09**. Management focuses on diversifying financing sources and maintaining marketable securities to mitigate liquidity risks. * **Public Deposits:** The company has **not accepted any deposits** from the public under Section 73 of the Companies Act, 2013. --- ### **Governance, Leadership & Board Oversight** The company has recently restructured its leadership team and board committees to ensure continuity and compliance with corporate governance norms. * **Executive Leadership:** * **Managing Director:** **Mr. Rajesh Hirji Shah**, re-appointed for a five-year term (Nov 25, 2024 – Nov 24, 2029). * **Chief Financial Officer:** **Mr. Sunil Hirji Shah** (serving since **March 2015**). * **Company Secretary:** **Ms. Rupali Dhiman**. * **Board Composition:** * **Mr. Prashant Manharlal Parekh** (Independent Director, re-appointed until **2029**). * **Mr. Ganesh Vijay Shiraskar** (Newly appointed Independent Director until **2029**). * **Mrs. Julie Mehul Shah** (Non-Independent Director). * *Note:* **Mr. Dhanesh Bipinchandra Parekh** ceased to be a Director recently following the completion of his maximum permitted tenure. * **Internal Controls:** The company maintains a **Code of Conduct for Prohibition of Insider Trading** to regulate **Unpublished Price Sensitive Information (UPSI)**. --- ### **Risk Profile & Regulatory Challenges** Classic Electricals operates in a **fierce** competitive environment and faces specific regulatory hurdles stemming from historical administrative delays. #### **Regulatory and Compliance Risks** | Risk Area | Status and Impact | | :--- | :--- | | **MPS Non-Compliance** | Faced a **BSE fine of Rs. 10,73,800** in August 2024. Promoter demat accounts were frozen in **October 2023**; remediation via bonus issue is now complete. | | **Promoter Demat** | Ongoing non-compliance with **Regulation 31(2)**; management is currently transitioning remaining promoter shares to electronic form. | | **Reporting Delays** | Noted for non-submission of the **Annual Report** (Reg 34) and failing to meet the **two-month window** for bonus issue implementation (Reg 295(1)). | | **Legal Frameworks** | Subject to the **Information Technology Act, 2000** and the **Sexual Harassment of Women at Workplace Act, 2013**. | #### **Financial Risk Management Framework** The company utilizes a formal **Risk Management Policy** to address the following: * **Market Risk:** Managing fluctuations in interest rates and commodity prices through **derivative instruments**. * **Liquidity Risk:** Mitigated through **rolling forecasts** and maintaining **committed credit facilities**. * **Credit Risk:** Monitoring counterparty obligations to prevent financial loss. * **Audit Quality:** The Auditor’s Report for **FY 2023-24** was **unmodified**, and no instances of fraud were reported under **Section 143(12)**.