Ashika Credit Director Discussions


Dear Shareholders,

Your Directors have pleasure in presenting the 30th Annual Report along with the Audited Financial Statements of Ashika Credit Capital Limited ("Company") for the Financial Year ended 31st March, 2023.

1. FINANCIAL HIGHLIGHTS

(Amount in Lacs)

Financial results for the year ended

31st March, 2023 31st March, 2022
Total Income 1205.21 723.46
Profit/ (Loss) before tax 794.37 544.26
Less: Tax Expenses 205.85 193.59
Profit / (Loss) for the year 588.52 350.67

Other Comprehensive Income/ (Loss) for the year, net of Income Tax

1.59 1.99

Total Comprehensive Income

590.11 352.66

2. INDUSTRY OUTLOOK

After several challenging years, exacerbated by the Covid-19 pandemic, fiscal 2023 has finally brought growth back into focus for NBFCs. In fact, NBFCs have showed resilience and adapted efficiently, even during the Covid-19 pandemic, to an evolving credit landscape. NBFCs are expected to play a larger role in supporting the socio economic construct of the Indian economy in 2023. NBFCs have certainly emerged stronger and better positioned in majority of critical operational parameters. Provisioning levels have also improved in the past couple of years, as NBFCs created management overlays to provide for uncertainty pertaining to the pandemic. Overall, the sector has much stronger balance sheets today. Crisil estimated Assets under Management (AUM) of NBFCs to have increased 12-13% in Financial Year 2022-2023 vis-a-vis single-digit growth over the past three fiscals (2020-2022). More importantly, the rating agency is confident of growth continuing into Financial Year 2023-2024 too driven by improving economic activity, strengthened balance sheet buffers, and better asset quality metrics

The opportunity for credit penetration still remains very high in India. The NBFCs can set a new benchmark by tying up with fintechs and introducing new business models with personalised offerings. The world seems to be recovering from the aftermath of the challenges posed in the last few years. Overall, despite the challenges, India has emerged as a bright spot in terms of economic growth amidst an outlook of global slowdown. The uptick in demand during the festive season is one of the reasons which make us optimistic. It is heartening to see that RBI and policymakers recognise the contribution of NBFCs in supporting real economic activity and meeting the credit demand, especially reaching the unbanked. The recent RBI Scale based norms is another welcome step for the industry that will elevate the status of NBFCs in line with several other public sector NBFCs. Under these revised norms, we expect to attain more operational flexibility to meet the increasing credit demand and aid Indias economic growth. The trajectory in overall systemic credit growth has been encouraging so far, in spite of a spree of interest rate hikes.

According to CARE Ratings, revised asset classification norms, which came into effect from 1st October, 2022, mandates that all NBFCs are required to collect the entire arrears to upgrade an NPA. Asset classification would start exactly from the overdue date, unlike the erstwhile practice of starting 90 days from the end of the month in which the account becomes overdue. These regulatory refinements may impact asset quality in the near term.

Banks outstanding credit to Non-Banking Financial Companies (NBFCs) has remained robust and spiked by 30.2% Y-o-Y in March 2023 to reach Rs 13.3 Lakhs crore, as per report released by Care Edge . The growth has remained robust due to high growth in the NBFC asset book and as as additional borrowings moved to banks due to differentials between market yields and interest rates offered by banks and lower borrowings in the overseas market. Compared to February 2018 numbers, absolute bank lending to NBFCs has more than tripled, while MF exposure has broadly reduced by over a third over the last five years. It also said if March 2023 data is compared with February 2020 numbers, bank borrowings by NBFCs have increased by 58.5%. Bank credit to NBFCs continues its upward trajectory into Financial Year 2022-2023. Further, intensifying competition from banks, especially in the traditional retail segments of home loans and vehicle finance is another factor to weigh in. However, credit rating agencies like Crisil believes that NBFCs are realigning their portfolio strategies to combat these challenges by shifting their focus towards non-traditional asset classes—unsecured loans; micro, small and medium enterprise (MSME) finance; and used vehicle finance—which are expected to post higher growth. Consequently, these segments are garnering higher share in incremental disbursements. While the traditional segments will also grow, the rate is unlikely to surpass the pre-pandemic levels. Besides, co-lending and partnerships between large and mid-sized NBFCs is likely to gain traction. Crisil believes that with these shifts, NBFCs will be able to pass on the increase in cost of borrowing to consumers and thus limit the gross spread compression. Besides, improvement in asset quality will provide some cushion.

3. COMPANYS FINANCIAL PERFORMANCE

The Financial Year 2022-2023 was a good year for the Company. It generated revenue balancing both the Portfolios i.e. Loan and Investments. Your Companys profits increased to a considerable extent and stood at 794.37 Lacs for the Financial Year ended 31st March, 2023 showing growth of 45.95% as compared to its previous year. Total income also recorded a significant increase of 66.59% as compared to previous year, mainly on account of gain from Trading & Investment in Securities Market. Your company had a bad debt recovery of 145 Lacs during the year under review. The increase in expenditure of the company is because of Fees paid to Exchanges towards Listing of company on Main Board of BSE and incurring of other charges like brokerage, STT & incidental cost etc for trading in securities market. The Earnings per Share (EPS) of the Company for the Financial Year 2022-2023 stood at 4.95.

Your company had achieved a milestone and got its securities Listed on Main Board of BSE Platform under Direct Listing route. The Listing & Trading of the equity shares of the Company commenced w.e.f. 14th February, 2023 in the list of "X" Group. The new Scrip Code is 543766 and Scrip ID: ASHIKA.

4. CHANGE IN NATURE OF BUSINESS

There has been no change in nature of business of the Company during the Financial Year 2022-2023. Your company is engaged in one segment i.e. financial services - providing Secured & UnSecured Loan, Trading & Investment in securities .

5. DIVIDEND

The Company has earned profit during the year under review and the said profit shall be ploughed back in the company and so, Board of Directors decided not to recommend any dividend for the Financial Year ended 31st March, 2023.

6. CHANGES IN SHARE CAPITAL

The Authorized Share Capital of your Company as on 31st March, 2023 stands at 20,25,00,000/- divided into 2,02,50,000 equity shares of 10/- each. The Issued & subscribed Share Capital of your Company is 11,88,61,740/- divided into 1,18,86,174 equity shares of Rs. 10/- each and the Paid-up Share Capital is 11,88,00,000/- divided into 1,18,80,000 equity shares of 10/- each, fully paid-up. During the year under review, the Company has not issued any shares. Further, the Company has not issued shares with differential voting rights. The Company has neither issued employee stock options or sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company.

7. TRANSFER TO RESERVE

Your company proposes to transfer 117.70 Lacs to Statutory Reserves u/s 45 IC of RBI Act, 1934 for the Financial Year ended 31st March, 2023.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL DIRECTORS

The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Companies Act, 2013 ("the Act") and Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("Listing Regulations") with an optimum combination of Executive, Non-Executive and Independent Directors including women director. The Board of the Company has 6 (Six) Directors. The details of the Directors of the Company have been provided in the Report on Corporate Governance forming part of this Annual Report.

During the year under review, upon recommendation of Nomination & Remuneration Committee and approval of Board, the re-appointment of Mr. Pawan Jain (DIN: 00038076), Executive Chairman and Mr. Daulat Jain (DIN: 00040088), Managing Director, who have the required integrity, expertise and experience and based on the performance evaluation, was duly approved by the Shareholders of the Company in the 29th AGM held in the year 2022 for a further period of consecutive 3 (three) years, effective from 1st November, 2022. They are liable to retire by rotation. Further, on recommendation of Nomination & Remuneration Committee, Ms. Sonu Jain (DIN: 07267279) was re-appointed by the Shareholders of the Company at the 28th AGM held in 2021, as Non-Executive Independent Director of the Company for a further period of consecutive 3 (three) years, effective from 1st April, 2022. She is not liable to retire by rotation. There were no other changes in the composition of Board of Directors during the year under review.

RE-APPOINTMENT OF DIRECTOR RETIRING BY ROTATION IN TERMS OF THE PROVISIONS OF THE COMPANIES ACT, 2013

Section 152 of the Act provides that unless the Articles of Association provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation.

Accordingly, Mr. Amit Jain, Non Executive Director (DIN: 00040222) is liable to retire by rotation at the ensuing Annual General Meeting ("AGM") and being eligible, has offered himself for re-appointment. Pursuant to Regulation 36 of the Listing Regulations read with Secretarial Standards- 2 ("SS-2") issued by the Institute of Company Secretaries of India ("ICSI"), a brief resume / details relating to the director liable to retire by rotation is furnished in the Notice of the ensuing AGM of the Company.

INDEPENDENT DIRECTORS

The Company has received declarations pursuant to Section 149(7) of the Act from all the Independent Directors (IDs) of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) as well as Schedule IV of the Act, read with rules framed thereunder, and in terms of Regulation 16(1)(b) of Listing Regulations. Your company has also received declaration from Independent Directors that they have affirmed compliance with Companys Code of Conduct applicable to all the Board Members and Senior Management Personnel of the Company for the Financial Year ended 31st March 2023. In terms of Regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based upon the declarations received from the Independent Directors, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management. In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent

Directors maintained with the Indian Institute of Corporate Affairs ("IICA") and have successfully completed the online proficiency self-assessment test conducted by IICA within the prescribed time period, unless they meet the criteria specified for exemption. As stipulated in the Code of Conduct for Independent Directors under the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on 25th January, 2023 to review the performance of Non- Independent Directors, including Executive Directors/ Managing Director, Chairperson and the Board, as a whole. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Boards which is necessary to effectively and reasonably perform and discharge their duties.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, integrity and expertise in the fields of finance, taxation, advisory, corporate law, and so on.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, as applicable, received by them.

FAMILIARIZATION PROGRAMME

The Company has formulated a policy on ‘Familiarisation Programme for Independent Directors. Accordingly, upon appointment of an Independent Director, the appointee is given a formal Letter of Appointment, which inter alia, explains the role, functions, duties and responsibilities expected as a Director of the Company. Further, the Company also familiarizes the Independent Directors with the Company, their roles, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, various businesses in the group etc. The Director is also explained in detail the compliance required from him under the Act and the Listing Regulations. Further, on an ongoing basis, presentations are regularly made to the Independent Directors on various matters inter-alia, covering the business strategies, management structure, quarterly and annual results, budgets, review of Internal Audit, risk management framework and so on.

The Policy on "Familiarisation Programme for Indepen dent Directors" along with the details of the familiarization Programmes are available on the website of the Company and can be accessed at https://ashikagroup.com/pdf/familiarization_ programme/familiarisation-programme-2022-2023.pdf

KEY MANGERIAL PERSONNEL

In terms of the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments thereof, the following are the Whole-Time Key Managerial Personnel (KMPs) in accordance with the provisions of Section 2(51) read with Section 203 of the Companies Act, 2013 -

• Mr. Pawan Jain - Executive Chairman

• Mr. Daulat Jain - Managing Director and Chief Executive Officer (CEO)

• Mr. Gaurav Jain - Chief Financial Officer (CFO)

• Ms. Anju Mundhra - Company Secretary and Compliance Officer

9. MEETINGS OF THE BOARD

Your Companys Board is duly constituted and is in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of your Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.

The Board met Five times during the year under review. The intervening gap between the two meetings did not exceed, at any time, the prescribed period of 120 days. The Committees of the Board usually meet the day before or on the day of the Board meeting, or whenever the need arises for transacting business. In case of business exigencies or urgency of matters, resolutions are passed by circulation.

Board meetings during Financial Year 2022-2023 were held on 17th May, 2022, 26th May, 2022, 6th August, 2022, 11th November, 2022 and 13th February, 2023. Details of Board composition and Board Meetings held during the Financial Year 2022-2023 have been provided in the Corporate Governance Report which forms part of this Annual Report.

10. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Companies Act, 2013, the Annual Return for the Financial Year ended 31st March, 2023, is available on the website of the Company at the link: https://ashikagroup.com/pdf/annual_return/annual-return-2022-2023.pdf

11. BOARD COMMITTEES

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted mandatory Board-level committees comprising of Executive and Non-Executive Directors in compliance with the requirements of the business and relevant provisions of applicable laws and statutes, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.

The Company in its Board meeting held on 26th May, 2022 had Constituted the Risk Management Committee of the Company w.e.f 1st October 2022 in terms of RBI Circular- Circular RBI/2021-22/112 DOR.CRE.REC.No.60/03.10.001/2021-22 dated 22nd October, 2021. Since the Risk Management committee is not constituted as per Regulation 21 of the Listing Regulations, the composition of the same is not included in Corporate Governance Report. In addition of the above, the Board has composed other committees as per RBI Regulations and other internal committees for the ease of carrying on business.

NOMINATION & REMUNERATION POLICY

Section 178 of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations, as amended from time to time, requires the Nomination and Remuneration Committee ("NRC") to formulate a Policy relating to the Remuneration for the Directors, Key Managerial Personnel ("KMP"), Senior Management Personnel ("SMP") and other employees of the Company and recommend the same for approval of the Board.

Accordingly, in compliance to the aforesaid provisions, the Nomination and Remuneration Policy of the Company is available on the website of the Company and can be accessed at https://ashikagroup.com/pdf/policies/2022-06-Nomination-and-Remuneration-Policy.pdf. Further, in terms of the recent amendments in Listing Regulations, the existing Nomination & Remuneration Policy of the Company has been amended. The revised Nomination & Remuneration Policy shall be effective from 1st June, 2023 and is uploaded at the link https://ashikagroup.com/ pdf/policies/Nomination&Remuneration-Policy-01.06.2023.pdf The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee. It broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees & others), KMP and SMP. Your Board on the recommendations of the Nomination and Remuneration Committee appoints Director(s) of your Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. As part of the policy, the Company strives to ensure that:

• The level and composition of remuneration is reasonable and sufficient to attract, retain, and motivate Directors of the quality required to run the Company successfully;

• Relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and

• Remuneration to Directors, KMPs, and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium, and long-term performance objectives appropriate to the working of the Company and its goals. It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and other Senior Employees is as per Nomination & Remuneration Policy of the Company.

12. FORMAL ANNUAL EVALUATION

The Annual Performance Evaluation of the Board, Individual Directors (including Managing Director/ Executive Director, Chairperson and Independent Director of the Company), Committees of the Board, Self Evaluation of Individual directors, excluding the director being evaluated and Peer-to-peer Evaluation has been conducted pursuant to the applicable provisions of Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Guidance Note issued by SEBI pertaining to Board evaluation process and also Guidance Note on Board Evaluation process issued by Institute of Company Secretaries of India (ICSI) dated August, 2020. Your company has carried out its Evaluation process for the Year 2022-2023 and it was duly taken on record by Nomination & Remuneration Committee, Independent Directors and Board in their respective meetings. The evaluation parameters and the process have been explained in detail in the Corporate Governance report.

13. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosure in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report and has been appended as Annexure I to the Boards Report.

Pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee other than Executive Chairman has been paid remuneration of more than 1.02 Crores per annum. Also, there are employees drawing remuneration more than Managing Director but no employee except the Executive Chairman and Managing Director hold more than 2% of equity shares of the company, as Karta of HUF and as an individual, respectively. The statement pursuant to Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of Annexure I to the Boards Report. In terms of first proviso to Section 136 of the Act, the Report and Financial Statements are being sent to the Members and others entitled thereto, excluding the information on employees particulars as required pursuant to provisions of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the annexure pertaining to the information on employee will be available for inspection at registered office of the company in physical mode. Shareholders can inspect the same up to the date of AGM, by sending requisition to the Company at secretarial@ashikagroup. com. Any shareholder interested in obtaining a copy of the said Annexure may write to the Company Secretary & Compliance Officer in this regard.

14. DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

Your Company has neither a Subsidiary Company nor a Joint Venture Company or an Associate Company during the year under review. Hence, disclosure regarding the same is not applicable to the Company under the Companies Act, 2013.

15. AUDITORS STATUTORY AUDITORS

M/s DMKH & Co, Chartered Accountants, having Firm Registration Number 116886W, have been appointed as the Statutory Auditors of the Company to hold office for a continuous term of 3 years from conclusion of the 28th Annual General Meeting held in the year 2021 till the conclusion of 31st Annual General Meeting to be held in the year 2024 as per Section 139 of the Act and the Rules made thereunder.

Further, the Statutory Auditors have provided a confirmation letter stating that they are not disqualified to act as the Statutory Auditors of the Company for Financial Year 2023-2024. Further, they have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Statutory Auditor has issued Audit Reports with unmodified opinion on the Standalone Financial Statements of the Company for the Financial Year ended 31st March, 2023. The Notes on the Financial Statements referred to in the Audit Report are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3)(f ) of the Companies Act, 2013.

During the year under review, the Statutory Auditors have not reported any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Act to the Audit Committee of the Board.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Act and the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. M R & Associates, Practicing Company Secretaries to conduct the Secretarial Audit for the Financial Year 2022-2023. The Secretarial Audit Report confirms that the Company has complied with the provisions of the Act, Rules, Listing Regulations and Guidelines and that there were no deviations or non-compliances. The Secretarial Audit Report for the Financial Year ended 31st March, 2023 is annexed herewith and marked as Annexure-II. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Furthermore, the Secretarial Auditors, M/s. M R & Associates, Practicing Company Secretaries, have also certified the compliance as per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and same has been intimated to the stock exchanges within the stipulated time and there stood no qualification reported by the Secretarial Auditor in the said report.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, as amended from time to time, the Company has framed Vigil Mechanism/ Whistle Blower Policy ("Policy") to enable directors and employees to report genuine concerns or grievances, significant deviations from key management policies and reports of any non-compliance and wrong practices, e.g., unethical behavior, fraud, violation of law, inappropriate behavior /conduct etc. The Audit committee oversees the functioning of this policy. The objective of this mechanism is to maintain a redressal system which can process all complaints concerning questionable accounting practices, internal controls, or fraudulent reporting of financial information. No person is denied access to the Chairman of the Audit Committee.

The said policy is available on the website of the Company www.ashikagroup.com and can be accessed at the link https:// ashikagroup.com/pdf/policies/ACCL-2022-03-Vigil-Mechanism-Policy.pdf Further, no complaints were reported under the Vigil Mechanism during the year under review.

17. RISK MANAGEMENT FRAMEWORK

Non-banking financial companies (NBFCs) are an essential component of Indias financial system. The history of Indias NBFC industry is one of under-regulation followed by over-regulation. NBFCs are involved in high-risk lending, and they often lend to small and medium-sized businesses, which are classified as high-risk assets. Your Company has a Risk Management Policy consistent with the provisions of Section 134(3)(n) of Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015. The Companys governance structure has well defined roles and responsibilities, which enable and empower the Management to identify, assess and leverage business opportunities and manage risks effectively. The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and related procedures & status. The Company recognises that all emerging and identified risks need to be managed and mitigated to protect its shareholders and other stakeholders interests, achieve its business objectives and enable sustainable growth. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. All risk factors has been duly considered like Credit cost, Interest, Business, Market, Strategic, Operational, Credit, Human Resource, Regulation & Compliance, Liquidity risk . Compliance Risk is one of the major risks faced by NBFC, so Compliance officer is entrusted to ensure strict observance of all statutory and regulatory requirements. Compliance risk goes beyond mere fines and penalties that may arise as a result of compliance irregularities and the Compliance Function needs to consider the entire gamut of adverse events that a company may be exposed to as a result of compliance failures. These may include events with extreme impact such as suspension of business operations or loss of reputation as a result of enforcement action against senior management.

In terms of Scale Based Regulation Regulatory Framework for NBFCs introduced by RBI dated 22nd October, 2021, your company is falling under Base Layer and accordingly had constituted a Risk Management Committee (RMC) w.e.f. 1st October, 2022. The Committee is responsible for evaluating the overall risks faced by the NBFC including liquidity risk and will report to board and assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and external environment risks. The Committee has overall responsibility for monitoring and approving the risk framework and associated practices of the Company.

FurtherinlinewiththeRBIguidelinesforAssetLiabilityManagement (ALM) system for NBFCs, the Company also has an Asset Liability Committee, which meets as and when required to review its ALM risks and opportunities. Your company has developed policies and processes to incorporate a consistent approach to risk management by developing culture at operational and strategic levels. In all cases, appropriate measures are put in place to address unfavorable impact from risk and favorable benefit from opportunities. Company strives to identify measures and manage all risks in prudent manner, through its policies and processes. The detailed section on key business risks and their mitigation strategies forms part of ‘Management Discussion and Analysis Section in the Report on Corporate Governance, which forms part of Annual Report.

18. CORPORATE SOCIAL RESPONSIBILITY

The Company recognizes the responsibilities towards society and strongly intends to contribute towards development of a knowledge based economy. Your Company operates on the belief that an organization should exist to serve a social purpose and enhance the lives of people connected through its business. Your Company has a CSR Policy in place which aims to ensure that your Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders.

During the year under review, your Company spent an amount of 3.00 Lacs as against its 2% obligation (i.e. 2% of Average Net Profits of the Company for the preceding three financial years) of 2.93 Lacs for the said Financial Year. The Annual Report on CSR activities, in terms of Section 135 of the Companies Act, 2013 (‘the Act) and the Rules framed there-under, is annexed to this report (Annexure III).

19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION

There have been no material changes and commitments affecting the financial position of the company, which have occurred since 31st March 2023, being the end of the Financial Year of the Company to which financial statements relate and the date of this report.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

During the year under review, there have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys future operations.

21. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. The Internal Financial Control procedure adopted by the Company are adequate for safeguarding 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 information. During the year under review, the Internal Financial Controls were operating effectively and no material or serious observation has been received from the Auditors of the Company for inefficiency or inadequacy of such controls. The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which forms a part of this report.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT 2013

Your Company is a non-deposit taking NBFC. The details of Loans and Investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are disclosed in the Notes to the Standalone Financial Statements. Your Company has not given any Guarantee or provided any Security during the year under review. The said Loans and Investments are reviewed by Audit Committee on quarterly basis.

23. DEPOSITS

Your company is a non- deposit taking NBFC registered with RBI, thus, the said clause is not applicable to the Company as per the provisions of Companies Act, 2013 and rules framed thereunder. Further, company has not taken any deposit pursuant to the provisions of Non-Banking Financial Companies (Acceptance of Public Deposits) (Reserve Bank) Directions, 2016.

24. PARTICULARS OF CONTRACTS/ TRANSACTIONS / ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered into by your Company with its related parties during the Financial Year 2022-2023 were in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. All such contracts or arrangements, which were prior approved by the Audit Committee, were in the ordinary course of business and on arms length basis. Further, there are no transactions to be reported under Section 188 (1) of the Act. Accordingly, the disclosure of Related Party Transactions as required in terms of Section 134(3)(h) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in Form AOC -2 is not applicable for this year. During the Financial Year 2022-2023, the Company entered into material Related Party transactions for which necessary approval has been solicited from Shareholders of the Company.

Details of transactions, contracts and arrangements entered into with related parties by the Company, during Financial Year 2022-2023, is given under Notes to Accounts annexed to Financial Statements, which forms part of this Annual Report. A statement giving details of all Related Party Transactions is placed before Audit Committee and the Board on a quarterly basis. The Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions is uploaded on the website of the Company at https://ashikagroup.com/pdf/policies/ACCL-2022-03-Related-Party-Transaction-Policy-wef-01.04.2022.pdf

25. CORPORATE GOVERNANCE REPORT

Your Company complies with the provisions laid down in Corporate Governance laws. It believes in and practices good corporate governance. The Company maintains transparency and also enhances corporate accountability.. In compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, the Annual Report of the Company for the Financial Year 2022-2023 contains the following: (i) Declaration regarding compliance to Code of Conduct by the Board Members and Senior Management Personnel; (ii) A certificate from a Practicing Company Secretary that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority; (iii) Report on the Corporate Governance and (iv) Practicing Company Secretaries Certificate regarding compliance of conditions of Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming part of the Annual Report.

26. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

The Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Workplace. Appropriate reporting mechanisms are in place for ensuring protection against Sexual Harassment and the right to work with dignity. Further, the Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

During the year under review, no complaints in relation to sexual harassment at workplace have been reported.

The group sexual harassment policy is uploaded on the website of the company at www.ashikagroup.com at the given link at https://ashikagroup.com/assets/parent/pdf/group_policies/ sexualharassment.pdf

27. COMPLIANCE WITH SECRETARIAL STANDARDS OF ICSI

The Board of Directors affirms that the Company has duly complied with the applicable Secretarial Standards (SS) relating to Meetings of the Board (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India which have mandatory application during the year under review.

28. DISCLOSURES PERTAINING TO MAINTENANCE OF COST RECORDS PURSUANT TO SECTION 148(1) OF THE COMPANIES ACT, 2013

The Company is not required to maintain cost records as specified u/s 148(1) of the Companies Act, 2013 read with the applicable rules thereon for the Financial Year 2022-2023. Hence the said clause is not applicable to the Company with respect to its nature of business.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOES

Your Company has no activity relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as stipulated in Rule 8(3) of Companies (Accounts) Rules, 2014. Hence, the requirements pertaining to disclosure of particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as prescribed under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are not applicable to the Company.

30. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

An application was made by the Company under Insolvency and Bankruptcy Code, 2016 with NCLT, Delhi Bench against Mica Industries Limited for recovery of an amount totaling to Rs.2.49 Crores (including Principal Sum Rs. 1.85 Crores & Penal charges Rs. 41.83 lacs). The matter has been settled with MICA and the settled amount has been received and the final order disposing the application by NCLT, Delhi Bench was made on 13th April, 2023. There was no proceeding pending against the Company under IBC, 2016.

31. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the financial year under review, the company has not taken from any Bank and further there stood no instance of onetime settlement with any Financial Institution.

32. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors to the best of their knowledge and belief and according to the information and explanation obtained by them make the following statement in terms of clause (c) of sub-section (3) of section 134 of Companies Act 2013 that— a) In the preparation of the annual accounts for the financial year ended on 31st March, 2023 the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) 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 31st March, 2023 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 Companies Act, 2013 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 were operating effectively. f ) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. ACKNOWLEDGEMENTS

The Directors express their deep sense of gratitude to the Government of India, Government of various states and concerned Government Departments, acknowledges the excellent support and co-operation received from exchanges, its shareholders, clients, bankers, business partners, associations and other stakeholders and place on record their sincere appreciation to its employees for their continued co-operation in realisation of the corporate goals in the years ahead.

For and on behalf of the Board of Directors

(Pawan Jain) (Daulat Jain)
Place: Kolkata Executive Chairman Managing Director & CEO
Date: May 29, 2023 DIN: 00038076 DIN: 00040088