Kreon Finnancial Services Ltd Directors Report

Dear Members,

Your directors have pleasure in presenting the 30th ANNUAL REPORT on the business and operations of our Company and the Audited Financial Statements together with the Auditors Report for the year ended 31st March 2024.

FINANCIAL RESULTS (Rs in Lakhs)

Particulars	Year ended on 31st March 2024	Year ended on 31st March 2023
Income from operations	1637.28	961.76
Profit/(Loss) before depreciation, Interest	262.73	496.90
Interest	95.96	45.28
Depreciation	70.50	54.05
Profit/(Loss) before tax	96.27	397.57
Prior period tax	0.00	0.19
Provision for tax	8.82	1.75
Deferred tax	25.12	(62.38)
Profit/(Loss) after tax	62.32	458.00
Other Comprehensive Income (‘OCI)	210.33	(270.48)
Total Comprehensive Income	272.65	187.52

BUSINESS PERFORMANCE

The revenue of our company in the Financial Year 2023-24 is Rs. 1637.28 Lakhs, compared to Rs 961.76 Lakhs in the Financial Year 2022-23. During the year under review, our Company made a profit of Rs. 62.32 Lakhs for the Financial Year 2023-24 as compared to Rs.458.00 Lakhs for the Financial Year 2022-23. The change in profits is due to increases in operational expenses and bad debts written off.

CHANGE IN NATURE OF BUSINESS

The Company operates as a Non-Banking Financial Company (Non- Deposit Taking Company). There are no changes in the nature of business.

SHARE CAPITAL

The Authorized share capital of the Company as on 31st March 2024, is Rs.3,000/-(Rupees Three Lakhs only) divided into 2,500 (Two Thousand Five Hundred Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each and 50 (Fifty Lakhs) Compulsory Convertible Preference Shares of Rs. 10/- (Rupees Ten only) each. There is no increase in the Authorized capital during the Financial Year 2023-24. The paid-up share capital as on 31st March, 2024 was Rs.2022.20/- (Rupees Two thousand twenty two Lakhs and twenty thousand only) divided into 202.22 (Two hundred two lakh and twenty two thousand only) Equity shares of Rs.10/- each. The paid-up share capital as on 31st March, 2023 is Rs.1362.30/- (Rupees One Thousand Three hundred sixty-two lakh and thirty thousand only) divided into 132.63 (One hundred Thirty two lakhs and sixty three thousand only) Equity shares of Rs.10/- each.

ISSUE OF SHARES/WARRANTS ON PREFRENTIAL BASIS

The Board of Directors at their meeting held on 20th July 2023, allotted 65.99 (Sixty five lakh and ninety nine thousand only) Equity Shares of Rs. 10/- each at a premium of Rs.11/- each against conversion of 65,99,000 (Sixty five lakh ninety nine thousand only) warrants issued at a price of Rs.21/- each against request for conversion by the Warrant holders on payment of full amount towards the warrants.

UTILISATION OF PROCEEDS OF PREFRENTIAL BASIS

The money received on subscription of the warrants has been used for the purpose stated in the object of issue and no deviation has resulted in utilization of the money.

DIVIDEND

The available resources are being conserved for future operations; hence no dividend is being proposed for the Financial Year 2023-24.

TRANSFER TO RESERVES

Company is a non-banking finance company (NBFC) and as per Sec 45IC(i) of RBI Act, 1934, our Company has transferred 20% of the net profits to general reserves amounting to Rs.12.46 Lakhs (Rupees Twelve Lakh Fourty Six Thousand only) for the financial year ended 31st March 2024.

EXTRACT OF ANNUAL RETURN AS PER SECTION 92 (3) OF COMPANIES ACT 2013

The Submission of Extract of Annual Return in MGT-9 is dispensed with in terms of Companies (Management and Administration) Amendment rules, 2021 dated 5th March, 2021. Hence, the MGT-9 has not been attached with this report. A copy of the Annual Return to the extent it can be filled up can be viewed in the website of the company at www.kreon.in.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Since the Company is a non-banking financial company registered with the RBI, the disclosures pertaining to loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are not applicable.

PUBLIC DEPOSITS

Our Company, being a non-deposit taking NBFC, has complied with all applicable Regulations of the Reserve Bank of India (RBI). As per Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, the Directors hereby report that the Company did not accept any public deposits during the year and did not have any public deposits outstanding at the end of the year.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Our Company has always responded in a prudent manner in protecting the environment in which it operates. During the year, for our Company, provisions as to Corporate Social Responsibility are not applicable.

CREDIT RATING

M/s Brickwork Ratings India Pvt. Ltd. (BWR) assigned following ratings to the Company:

S. No. Name of the Bank/ Lender	Amount	Present rating
1 Fund based - Bank	Rs.10 Crores	BWR BB/
Loan - Term loans	Only	Stable
(Proposed)		Assignment

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED UNDER SECTION 188 (1)

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arms length basis. Particulars of such related party transactions are described in Form AOC-2 as required under Section 134 (3)(h) of the Act, read with Rule 8(2) of the Companies (Accounts) Rules 2014, which is annexed herewith as "ANNEXURE - I". The board has approved a Policy for Related Party Transactions which has been hosted on the website of the Company http://www.kreon.in/wp-content/uploads/2020/07/Policy-on-Related-Party-Transaction.pdf. There were no materially significant related party transactions entered into by the company during the year under review, which may have potential conflict with the interest of the company at large. There were no pecuniary relationships or transactions entered into by any independent directors with the company during the year under review.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIES

Our Company does not have any Subsidiary or Joint Venture or Associate Company.

DIRECTORS/KEY MANAGERIAL PERSONNEL

Directors of the Company as on date as follows:

S. NO NAME AND DIN	DESIGNATION
1 Mr. JaijashTatia (DIN: 08085029)	Whole-Time Director
2 Mrs. Henna Jain (DIN: 08383395)	Non- Executive Director
3 Ms. Hemamalini D (DIN: 02914395)	Non- Executive Independent Director (till 31.03.2024)
4 Mr. Subbarayan Ekambaram (DIN: 01186153)	Non- Executive Independent Director (till 31.03.2024)
5 Mrs. Menaka M (DIN: 10550690)	Non- Executive Independent Director/ Additional Director (w.e.f 1.4.2024)
6 Mrs. Rajashree Santhanam (DIN: 07162071)	Non- Executive Independent Director/ Additional Director (w.e.f 1.4.2024)
5 Mrs. Shoba Nahar	Chief Financial Officer
6 Mrs. Vidyalakshmi R	Company Secretary

During the year under review, there has been no change in the constitution of the Board except as mentioned here below: Mr. Subbarayan Ekambaram and Ms. Hemamalini ceased to be the Independent Directors of the Company upon completion of 2 consecutive terms of 5 years each at the closure of business hours on 31st March, 2024. Mrs. Menaka M and Mrs. Rajashree Santhanam appointed as the Additional director of the Company designated as non-executive Independent Director of the Company at the Board meeting held on 29th March 2024, for a period of one year with effect from 1st April 2024, subject to the approval of the shareholders, within three months of such appointment, which is proposed for approval at this Annual General Meeting.

In terms of Section 152 of the Companies Act 2013, Mr. Jaijash Tatia, Director, retires by rotation at the ensuing Annual General Meeting and, being eligible offers himself for re-appointment.

The shareholders at the Annual General Meeting held on 30th August 2022, approved the appointment of Mr. Jaijash Tatia, as the whole-time director of the Company for a further period of three years w.e.f. 01.04.2023 to 31.03.2026. Accordingly, he will hold the office till 31st March 2026.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The companys policy relating to appointment of directors,paymentofmanagerialremuneration,directors qualifications, positive attributes, independence of directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished as attached to this report "ANNEXURE - II".

PARTICULARS OF EMPLOYEES AND RATIO OF REMUNERATION OF EACH DIRECTOR TO THE CALCULATION OF MEDIAN EMPLOYEES REMUNERATION AND OTHER PRESCRIBED DETAILS

Details of managerial remuneration as required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and information required under Section 197 of the Act read with rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned as per "ANNEXURE - III".

FORMAL EVALUATION OF THE PERFORMANCE OF THE BOARD, COMMITTEES OF THE BOARD AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of 134(3)(p) the Companies Act, 2013 the Board has carried out the annual performance evaluation of its own performance, and that of its committee, chairperson and individual directors. Inputs were received from the directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its committees, Board culture, execution and performance of specific duties, obligations and governance.

Pursuant to Regulation 17(10) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the evaluation of independent directors was done by the entire board of directors which includes –a. Performance of the directors; and b. Fulfilment of the independence criteria as specified in the regulations and their independence from the management.

CRITERIA ADOPTED FOR EVALUATION

The Board evaluated the roles, functions, duties of Independent Directors (IDs) of the Company. Each ID was evaluated by all other directors other than the director being evaluated.

The Board has also reviewed the manner in which IDs follow guidelines of professional conduct. Following has also been reviewed: (i) Performance review of all the non-independent directors of the company on the basis of the activities undertaken by them, expectation of Board and level of participation; (ii) Performance review of the Chairman of the Company in terms of level of competence of Chairman in driving the Company; (iii) The review and assessment of the flow of information by the Company to the Board and manner in which the deliberations take place, the manner of placing the agenda and the contents therein; (iv) The review of performance of the directors individually, the performance of the Board as a whole as well as evaluation of working of Committees of the Board shall be carried out by the members of th Board; (v) Based on performance evaluation, Nomination and Remuneration Committee and the Board shall determine whether to extend or continue the term of appointment of ID subject to all other applicable compliances.

A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB- SECTION (6) OF SECTION 149

All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations.

STATUTORY AUDITORS

M/s Darpan & Associates, Chartered Accountants (Firm Registration No. 016156S) were appointed as the Statutory Auditors of the Company for a term of five financial years 2023-28, at the Annual general meeting held on 28th July 2023 till the conclusion of the 34th AGM of the Company to be held in the year 2028.

COMMENT ON AUDITOR REPORT

There are no qualifications, reservations, remarks or disclaimers made by the Statutory Auditors, in their audit report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Lakshmmi Subramanian & Associates, Practising Company Secretaries, to undertake the secretarial audit of the company. The Secretarial Audit Report issued for the FY 2023-24 by the secretarial auditor, M/s. Lakshmmi Subramanian & Associates, Practicing Company Secretaries bearing (FCS No. 3534; CP No. 1087) is annexed herewith as "ANNEXURE - IV".

COMMENT ON SECRETARIAL AUDITOR REPORT

The observations and remarks made by the Secretarial Auditors in their audit report are self explanatory.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the Company.

FRAUDS REPORTED BY THE AUDITOR

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its officers or employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which need to be mentioned in this Report

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments that would affect the financial position of the Company from the end of the Financial Year of the Company to which the Financial Statements relate and the date of the Directors Report.

RISK MANAGEMENT

Financing activity is the business of management of risks, which in turn is the function of the appropriate credit models and the robust systems and operations.

Our Company continues to focus on the above two maxims and is always eager to improve upon the same. Pursuant to Regulation 21(5) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the regulations of Risk Management Committee are applicable to top 1000 listed entities determined on the basis of market capitalization, as at the end of the immediate previous financial year. Our Company does not have the statutory requirement to have risk management committee. However, the Company ensures to take steps to identify, assess and control risks which in the opinion of the Board may threaten the business activities of KFSL.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Companies Act, 2013 read with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 re-emphasizes the need for an effective internal financial control system in the Company which should be adequate and shall operate effectively. The Company has devised a proper system of internal financial control which is commensurate with size and nature of Business. The Board has also re-appointed M/s. R. Baskaran & Co., Chartered Accountants as an Internal Auditor of the Company pursuant to provisions of Section 138 of the Companies Act, 2013. The internal financial control mechanism adopted and exercised are adequate to the size of the Company.

QUALITY POLICIES

The Company has obtained ISO 9001:2015 & ISO 27001:2013 Certification from an independent, internationally accredited certification company, an internationally recognized standard that ensures our products and services meet the needs of our customers through an effective quality management system.

CERTIFICATE ON CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (LODR) Regulations, 2015, Corporate Governance Report is annexed as "ANNEXURE - V" to this Report.

As required by Schedule V of the SEBI (LODR) Regulations, 2015, Auditors Certificate on Corporate Governance as certified by M/s Darpan & Associates are annexed as "ANNEXURE - VI" to this Report confirming compliances with the conditions of Corporate Governance.

BOARD MEETINGS HELD DURING THE YEAR

The Board met eight (8) times during the financial year under review, the details of which are given in the Corporate Governance Report "ANNEXURE - V". The intervening gap between the Meetings was within the period prescribed under the Companies act, 2013.

CERTIFICATE OF CHIEF FINANCIAL OFFICER

The Chief Financial Officer of the Company has certified to the Board on Financial Statements and other matters pertaining to Financial Year ended 31st March 2024, in accordance with Regulation 17(8) of the SEBI (LODR) Regulations, 2015, which is annexed as "ANNEXURE - VII" to this Report.

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

Certificate of Non-Disqualification of Directors (Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) for the year ending 31st March 2024, has been obtained from M/s. AXN Prabhu& Associates, Mr. AXN Prabhu, Practising Company Secretary, C.P #11440; Membership No. 3902 which is annexed as "ANNEXURE - VIII" to this report.

STATUTORY COMPLIANCE

The Company has been adopting the policies and requirements as mandated under various statutes to the extent and as far as possible and shall always strive to abide by the laws and by- laws as applicable.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. Company is complying with the Secretarial Standards issued by the Institute of Company Secretaries of India.

RBI GUIDELINES

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Companys performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

Since the Company is operating in service sector, the provisions of Section 134(3)(m) of the Companies Act, 2013 regarding conservation of energy and Technology Absorption are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the FY 2023-24, Company has incurred an expenditure in foreign currency on purchase / subscription to software of Rs.17.27 Lakhs. During the period 2022-23, the amount of outflow was Rs.28.53 Lakhs.

MATERIAL ORDER PASSED REGULATORS / COURTS / TRIBUNALS

There was no material order passed by Regulators / Courts / Tribunals during the year under review.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Our Company has always believed in providing a safe and harassment free workplace for every individual working in Companys premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Our Company has a Policy for prevention of Sexual Harassment at workplace and copy of the same has been disclosed on the Companys website www.kreon. in, which aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behaviour The Company had instituted an Internal Complaints Committee for redressal of sexual harassment complaint (made by the victim) and for ensuring time bound treatment of such complaints comprising of the following members:

I. Whole Time Director – Mr. Jaijash Tatia

II. Director – Ms. Henna Jain

III. Chief Financial Officer – Mrs. Shoba Nahar

During the Financial year under review there were no cases reported under the said policy.

POLICY ON VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of its Board and its Powers) Rules, 2014 and in accordance with Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has an established Policy on Vigil Mechanism for Directors / Employees and other stakeholders of the Company to report concerns about unethical behaviour, actual or suspected fraud, or violation of the Companys Code of conduct or ethics policy. The policy also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the Management about the grievances or violation of the Companys Code of Conduct. The policy is disclosed on the Companys website http://www.kreon. in/wp-content/uploads/2020/07/Vigil-Mechanism-or-Whistle-Blower-Policy.pdf.

POLICIES

The Board of Directors of the Company has from time to time framed and approved various Policies in pursuance of the Companies Act, 2013 and the Listing Agreement/ SEBI (LODR)Regulations, 2015. These policies and codes are reviewed by the Board and are updated, if required. The following policies have been framed and has been disclosed on the Companys website www.kreon.in:

1. Code of conduct for Directors, Senior Management and Independent Directors

2 Policy for prevention of sexual harassment (POSH)

3. Policy on determination of Materiality of Events or Information

4. Board diversity policy

5. Performance evaluation policy

6. Succession plan for the Board and Senior Management

7. Risk management Policy

8. Vigil Mechanism or Whistle Blower Mechanism

9. Policy on preservation of documents

10. Policy on Related Party Transaction

11. Criteria for making payment to Non-Executive Directors

12. Terms and conditions for appointment of independent Directors

13. Familiarization Program for Independent Directors

14. Code for prevention of Insider Trading in securities

OTHER DISCLOSURES

During the year under review, the Company has not obtained any registration/ license / authorisation, by whatever name called from any other financial sector regulators.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013: a) that in the preparation of the Annual Financial Statements for the year ended 31st March, 2024, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any; b) that such Accounting Policies as mentioned in Notes to the Financial Statements have been selected and applied consistently judgment and estimates have been made 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, 2024 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken 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) that the Annual Financial Statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and; f) that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors place on record their appreciation to all those people, who have so willingly placed their trust in the Company & the Management and to all the customers across all areas of our operations, who have given the Company an opportunity to serve them.

The Company looks forward to further strengthening the synergies. The entire KFSL Team deserves the appreciation for their sincere efforts and determination to excel. The core team of KFSL plays a pivotal role in articulating and implementing the strategic decisions and thus contributing to the development of the company. We take this opportunity to express my heartfelt appreciation for their continuous support, hard work and dedication.

We trust this journey will continue to be a pleasant one with their support, aware of the fact that we have "Miles to go.… with the confidence that "Together We Can, and We Will."

	By Order Of The Board
	For Kreon Finnancial Services Limited
	Sd/-	Sd/-
	JaijashTatia	Henna Jain
Place: Chennai	Whole time Director	Director
Date : 29.05.2024	(DIN: 08085029)	(DIN: 08383395)