avasara finance ltd share price Directors report


To

The Members,

Avasara Finance Limited

(Formerly known as TRC Financial Services Limited)

Your Directors have pleasure to present the Twenty Nineth Annual Report of your Company, Avasara Finance Limited for the financial year ended March 31, 2023. In line with the requirements of the Companies Act, 2013 and the rules framed thereunder, this report covers the financial results and other developments during the Financial Year 1st April 2022 to 31st March 2023.

1. SUMMARY OF OPERATIONS/RESULTS

The financial results of the Company for the year ended March 31,2023 compared to the previous year are summarized below:

(Rupees in Lacs)

Particulars

March 31, 2023

March 31, 2022

Revenue from Operations

32.23

22.66

Other Income / Loss

-

0.82

Total Expenditure

29.38

58.80

Net Profit/(Loss) before tax

2.85

(35.32)

Current Tax

0

3.22

Tax Expense for earlier years

0

(4.87)

Net Profit/(loss) after Tax

2.85

(36.40)

2. COMPANYS AFFAIRS

Your Company has earned a total business revenue of Rs. 32.23 lacs and the net profit before tax of Rs. 2.85 lacs for the financial year 2022-23 as against the revenue of Rs. 22.66 lacs and net loss before tax of Rs. 35.32 lacs in the previous financial year 2021-2022.

3. PERFORMANCE AND FUTURE PROSPECTS

Your Company has prepared the Financial Statements in accordance with Indian Accounting Standards ("IND AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Rules, 2016. The Company has adopted IND AS from 1st April 2018 with effective transition date of 1stApril, 2017 and accordingly, these Financial Statements together with the Financial Statements for the comparative reporting period have been prepared with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 ("the Act") read with relevant Rules issued thereunder and the other accounting principles generally accepted in India.

During the year 2022-23 the company had revenue of Rs. 15 lacs from consulting services as compared to Nil in the previous financial year. Employee benefit cost during the year was 15.14 lacs as compared to 15.37 lacs in the previous financial year. Profit before tax for the financial year was at Rs. 2.85 lacs as against a loss before tax of Rs. 35.32 lacs for the financial year 2021-22.

Further the management of the Company is looking at various opportunities for expanding the business including other area of lending and building a loan book.

4. CHANGE IN THE MANAGEMENT OF THE COMPANY

During the year under review there was no change in the management of the Company.

5. DIVIDEND & TRANSFERS TO IEPF

Your Board does not recommend any dividend for the financial year ended March 31, 2023.The Company was not required to transfer the amount of any unclaimed/unpaid dividend to Investor Education Protection Fund.

6. TRANSFER TO RESERVE

The Board of Directors of your Company has transferred Rs. 0.57 lacs from Retained earnings to the statutory reserve as directed by RBI for the year 2022-23.

7. CORPORATE GOVERNANCE

Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, provide threshold for applicability of corporate governance rules. Your company does not exceed such threshold. Hence, provision of corporate governance is not applicable on your company.

8. CHANGE IN THE NATURE OF BUSINESS

No changes occurred in the nature of business during the financial year ended March 31, 2023, and till the date of issue of this report.

9. MATERIAL CHANGES AND COMMITMENTS

No material changes/ commitments occurred between the end of the financial year to which financial statements relate and the date of this report.

10. DEPOSITS

The Company has not accepted any deposits and, as such, no amount of principal or interest is outstanding as of the Balance Sheet date.

11. SUBSIDIARY, ASSOCIATE AND JOINT VENTURES COMPANIES

The Company does not have any subsidiary as per Clause 2(87) or associate as per Clause 2(6) of the Companies Act, 2013; also, it has not entered into any joint venture agreements with any other entities.

12. SHARE CAPITAL

During the F.Y. 2022-2023, there was no change in the Share Capital of the Company.

13. BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND COMMITTEES THEREOF

13.1 Board of Directors and Key Managerial Personnel

The Current Composition of Board of Directors and Key Managerial Personnel of the Company is as follows:

Sr. no. Name of Director and Key Managerial Personnel

DIN/ PAN

Category

1 Mr. Naresh Gandhi

08130774

Non - Executive, Independent Director

2 Mr. K. Sanjay Prabhu

00023196

Non- Executive, Non - Independent Director

3 Mrs. Uma Prasad Bontha

08406107

Non- Executive, Independent Director

4 Mr. Sabarinath Gopalakrishnan

08479403

Whole Time Director & Chief Financial Officer

5 Mr. Valmeekanathan Subramanian

05297798

Non- Executive, NonIndependent Director

6 Ms. Charmi Kartik Gindra

AQAPC3360K

Company Secretary and Compliance Officer

L3.2 Board of Directors

• Details of Board Meetings/CommitteeMeetings

The Board of Directors met five times during the year. The details as per Standard 9 of the Secretarial Standards-1 on Board meetings/committee Meetings held during the financial year 202223 are furnished below:

Board Meeting Dates

30thMay, 2022; 09thAugust, 2022; 02nd September, 2022; 14th November, 2022 and 10th February 2023

Audit Committee Meeting Dates

30thMay, 2022; 09thAugust, 2022; 14th November, 2022 and 10th February 2023

NRC Committee Meeting Dates

09th August, 2022

Stakeholders Relationship Committee Meeting Date

09th August, 2022

• Attendance of Directors at Meetings

Sr. No. Name of the Director

Board meeting attended

Audit Committee meetings attended

NRC Committee meetings attended

Stakeholders Relationship Committee Meeting Date

1 Mr. Naresh Gandhi

5

4

1

1

2 Mr. Sanjay Prabhu

4

4

1

-

3 Mrs. Uma Prasad

4

4

1

1

4 Mr. Sabarinath Gopalakrishnan

5

-

-

1

5 Mr. Valmeekanathan Subramaniam

5

-

-

-

• Changes in Directors/ Key Managerial Personnel

During the year under review and since the last Boards report, the following changes in the composition of Board of Directors and Key Managerial Personnel took place:

1. Mr. Valmeekanathan Subramaniam was appointed as Additional Director on 10th November, 2021 and was regularized as Director on 28th September, 2022.

2. Mr. Naresh Gandhiwas re-appointed as Non-Executive Independent Director with effect from 11thMay, 2023 for a further consecutive period of 5 years.

• Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Companys Articles of Association, Mr. Valmeekanathan Subramaniam (DIN: 05297798) retires by rotation at 29th Annual General Meeting and being eligible has offered himself for re-appointment.

The Board of Directors recommends to the shareholders to re-appoint him at the 29th Annual General Meeting.

• Committee Meeting Independent Directors

During the year under review, the Independent Directors was held on 10th February 2023 inter alia, to discuss:

1. Evaluation of performance of Non-Independent Directors and the Board of Directors as a whole;

2. Evaluation of performance of the Chairman of the meetings of the Company, taking into account the views of Executive and Non-Executive Directors.

3. Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties

• Declaration from Independent Directors

The Company has received 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 Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

In the opinion of the Board, all the Independent Directors possess the integrity, expertise and experience including the proficiency required to be Independent Directors of the Company, fulfil the conditions of independence as specified in the Act and the SEBI Listing Regulations and are independent of the management and have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Act.

• Familiarization program for independent directors

All new independent directors appointed on the Board attend a familiarization program.

After appointment, a formal letter is issued to the independent directors outlining his/her roles, functions, duties and responsibilities.

• Board evaluation

The performance of the board was evaluated by the board after seeking inputs from all the directors based on 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 based on the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors based on the criteria such as the contribution of the individual director to the board and committee meetings.

In a separate meeting of independent directors, performance of non-independent directors, and performance of the board was evaluated, taking into account the views of executive directors and non executive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Policy on directors appointment and remuneration

The current policy of the Company is to have an optimum combination of both executive and independent directors to maintain the independence of the Board and separate its functions of governance and management.

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, independence of director and other matters, as required under Section 178(3) of the Companies Act, 2013 is available on our website (www.trcfin.in). There has been no change in the policy since the last financial year. We avow that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

• Policies

All our policies are available on our website (www.trcfin.in). The policies are reviewed periodically by the Board and updated based on need.

13.3 Committees of Board of Directors

• Audit Committee

The Audit Committee of Directors is constituted as per the provisions of Section 177 of the Companies Act, 2013. The Composition of Audit Committee is as follows:

Sr. no Name of Member

DIN

Category

1 Mr. Naresh Gandhi, Chairman

08130774

Non - Executive, Independent Director

2 Mr. K. Sanjay Prabhu

00023196

Non - Executive, Non- Independent Director

3 Mrs. Uma Prasad Bontha

08406107

Non - Executive, Independent Director

• Nomination and Remuneration Committee

The Nomination & Remuneration Committee of Directors is constituted in accordance with the requirements of Section 178 of the Companies Act, 2013. The Composition of Nomination and

Remuneration Committee is as follows:

Sr no. Name of Members

DIN

Category

1 Mr. Naresh Gandhi - Chairman

08130774

Non - Executive, Independent Director

2 Mr. K Sanjay Prabhu

00023196

Non - Executive, Non- Independent Director

3 Mrs. Uma Prasad Bontha

08406107

Non-Executive Independent Director

Stakeholders Relationship Committee

Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors has constituted the Stakeholders Relationship Committee. The Composition of Stakeholders Relationship Committee is as follows:

Sr no. Name of the Member

DIN

Category

1 Mr. Naresh Gandhi - Chairman

08130774

Non - Executive, Independent Director

2 Mr. Sabarinath Gopalakrishnan

08479403

Whole Time Director & Chief Financial Officer

3 Mrs. Uma Prasad Bontha

08406107

Non - Executive, Independent Director

• Investment Committee

The Board of Directors has constituted the Investment Committee to co-ordinate and oversee the organizations investment portfolio as required under RBIs NBFC regulations. Composition of the same is as follows

Sr no. Name of Director

DIN

Category

1. Mr. Sabarinath Gopalakrishnan

08479403

Whole-time Director

2. Mr. Naresh Gandhi

08130774

Non - Executive, Independent Director

3. Mrs. Uma Prasad Bontha

08406107

Non - Executive, Independent Director

14. CERTIFICATE FROM COMPANY SECRETARY IN PRACTICE

Priti J Sheth of M/s Priti J Sheth & Associates practicing Company Secretaries has issued a certificate as required under the Listing Regulations, confirming that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of Companies by SEBI/ Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed as "Annexure A"

15. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 in respect of Corporate Social Responsibility are not applicable to the Company.

16. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower mechanism for directors and employees to report concerns about unethical behavior. The said policy has been posted on the website of the Company- www.trcfn.in.

17. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators, courts or tribunals impacting the functioning of the Company.

18. STATUTORYAUDITORS

M/ s. NBS & Co. Chartered Accountants, (ICAI Firm Registration No. 110100W) were appointed as the Auditors of the Company by the shareholders of the Company at the 26th Annual General Meeting of the Company held on September 30, 2020 and shall hold office for a period of 5 years till 2024-25.

Due to RBI Circular RBI/2021-22/25 Ref. No. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated 27thApril, 2021, NBFC can appoint Statutory Auditor for the period of 3 years.

The Board has decided to recommend the appointment of M/s- P.B. Shetty & Co., Chartered Accountants (FRN No. 110102W) as Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 for a period of three consecutive years i.e. to hold the office till the conclusion of the fourth Annual General Meeting to be held in the financial year 2026. The Board places on record its appreciation of the services of the retiring Auditors M/ s. NBS & Co. who have been Auditors of the Company since the financial year 2020-21.

19. STATUTORY AUDITORS REPORT

The Statements made by the Auditors in their report are self-explanatory and doesnt require any comments by the Board of Directors.

20. INTERNAL FINANCIAL CONTROL (IFC)

Your Companys internal control system (including Internal Financial Controls with reference to financial statements) ensures efficiency, reliability and completeness of accounting records and timely preparations of reliable financial and management information, compliance with all applicable laws and regulations, optimum utilization, and the protection of the Companys assets.

The Company has appointed M/ s. VMRS & Co., Chartered Accountants as the Internal Auditors as mandated under Section 138 of the Companies Act, 2013 for conducting the Internal Audit of the Company.

21. REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

22. RISK MANAGEMENT POLICY

The Company has adopted a Risk Management Policy which helps the Company in identification of risk, lays down procedure for risk assessment and procedure for risk mitigation.

23. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Since the Company is a registered entity under the Reserve Bank of India to conduct the business of Non-Banking Financial Services, pursuant to the section of 186 (11)(a), (b) of the Companies Act, 2013, the company is exempted from complying with the provisions.

Further, details of Investments made by the Company during the year under review form a part of the financial statements.

24. PARTICULARS OF TRANSACTION BETWEEN THE COMPANY AND THE NONEXECUTIVE DIRECTORS

During the year under review the company has not entered into any transaction with its Non Executive Directors.

25. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In order to prevent sexual harassment of women at workplace, your Company has adopted a Policy for prevention of Sexual Harassment of Women at Workplace. During the year under review, the Company has not received any complaints in this regard.

Further, the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are not applicable.

26. COMPLIANCE WITH THE ICSI SECRETARIALSTANDARDS

The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings and General Meetings have been complied with by the Company.

27. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013 in relation to financial statements for the year ended 31st March 2023, the Board of Directors state that:

a. In the preparation of the Annual Accounts, the applicable accounting standards had been followed.

b. The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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 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 this Act 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 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.

28. EXTRACT OF ANNUAL RETURN

As required under Section 134(3) (a) of the Act, the Annual Return for the financial year 2022-23 is uploaded on the Companys website and can be accessed at http:/ / www.trcfin.in.

29. SECRETARIAL AUDITORS

As required under Section 204 of the Companies Act, 2013 and Rules made thereunder the Board has appointed M/s. Priti J. Sheth& Associates, Practicing Company Secretaries as Secretarial Auditor of the Company for the F Y 2022-23.

30. SECRETARIAL AUDIT REPORT

The Secretarial Audit Report for the financial year 2022-23 forms part of Annual Report as "Annexure B" to the Boards Report.

31. DIRECTORS COMMENT ON QUALIFICATION OROBSERVATION

The responses of your directors on the observations made by the Secretarial Auditor are as follows: -

1) The Company has generally complied with the NBFC norms issued by Reserve Bank of India except for delay in few filings with RBI.

There were a few delays in the filings to be made to RBI as there were some software glitches with the regulators website.

2) Website of the Company is not working.

The Companys website was under maintenance and now it is working.

3) The Company is yet to submit the website URL as required by exchange Notice No. 20230209-1 dated February 09, 2023.

The Companys website was under maintenance and hence could not submit the website URL as required by the Stock Exchange; however the same has now been complied with.

4) The Company has not maintained the Structured Digital Database (SDD) as required under Regulation 3(5) of SEBI (Prohibition of Insider Trading) Regulations, 2015 nor has submitted the Compliance Certificate with respect to the same.

The company is non-operational, with merely accrued income and no revenue realized. Consultancy income of Rs. 15 lakhs has been realized in the first quarter of 2023-24. The Company was in short of funds hence, as a cost saving measure; the Board had decided to set up the SDD at later stage. Except for the promoter, no insider holds any shares in the Company and the Promoter has taken reasonable steps to ensure that no insider with access to UPSI trades in shares

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

(A) CONSERVATION OFENERGY

i. The Steps Taken or Impact on Conservation of Energy: The Company takes necessary measure to conserve energy at its offices.

ii. The Steps Taken by The Company for Utilizing Alternates Source of Energy: NIL

iii. The Capital Investment on energy conservation equipments: NIL

(B) TECHNOLOGY ABSORPTION

i. The efforts made towards technology absorption :NIL

ii. The benefits derived like product improvement, cost reduction, product development or import substitution: NIL

iii. In case of imported technology (imported during last three years reckoned from beginning of financial year)

• Details of technology imported: Nil

• Year of Import: Nil

• Whether technology has been fully absorbed: Nil

• If not fully absorbed, areas where absorption has not taken place and the reasons thereof : Nil

iv. The expenditure incurred on Research and Development : Nil

( C) FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of foreign exchange earnings and outgo during the period under review is as under:

Particulars

As at March 31, 2023

As at March 31, 2022

Foreign Exchange earned

Nil

Nil

Foreign Exchange used

Nil

Nil

33. CEO/ CFO CERTIFICATION

The company is exempted under Regulation 15(2) of the SEBI (Listing Obligations and Disclosures) Regulations, 2015 from including CEO / CFO certificate as a part of Annual Report.

34. RELATED PARTY TRANSACTIONS

There were no transactions falling under the purview of Section 188 of the Companies Act, 2013 and the rules framed thereunder.

35. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), is presented in a separate section forming part of this Annual Report.

36. RESERVE BANK OF INDIA REGULATIONS

The Reserve Bank of India has classified the Company as "Category B Non-Banking Finance Company".

The Company continues to comply with all the applicable regulation prescribed by the Reserve Bank of India ("RBI") from time to time.

37. MAINTENANCE OF COST RECORDS:

Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

38. PARTICULARS OF REMUNERATION TO DIRECTORS, KEY MANAGERIAL PERSONS AND EMPLOYEES

The Company wishes to place on record their appreciation to the contribution made by the employees to the operations of the company during the period.

During the year under review, there were no employees who were in receipt of the remuneration beyond the limits prescribed under Rule 5 (2) of Companies (Appointment and Remuneration) Rules, 2014 and therefore no disclosures need to be made under the said section.

Further, the details of the top 10 employees in terms of remuneration drawn pursuant to rule 5(1) and 5(2) of Companies (Appointment and Remuneration) Rules, 2014 shall be available at the registered office of the Company during the business hours and the details ratios of the remuneration of each Director to the median remuneration to the employees of the Company for the financial year are enclosed as "Annexure C" to the Boards Report.

39. DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES

The Company has not entered in any of the agreements that it impacts management and control of the listed entity which are binding and not in normal course of business. Any other parties where listed entity is not a party has not been entered.

40. ACKNOWLEDGEMENT

Your Board wishes to place on record its sincere appreciation for the wholehearted support received from members, government authorities, bankers, consultants, and all other business associates. We look forward to continued support of all these partners in progress.

For and on behalf of the Board of Directors

Avasara Finance Limited

(Formerly known as TRC Financial Services Limited)

Sd/-

Sd/-

Sabarinath Gopalakrishnan

Valmeekanathan S

Wholetime Director

Director

DIN: 08479403

DIN: 05297798

Place: Bangalore

Date: 14thAugust, 2023