Sainik Finance & Industries Ltd Directors Report

Sainik Finance & Industries Limited is a public limited company which was incorporated on 22^nd August, 1991 with Registrar of Companies, NCT Delhi and Haryana (ROC) in the name & style of Garuda Clays Limited. Later on Ramanuj Leasing Limited which was incorporated on 2^nd January 1985 with the object to carry on leasing & finance activities, was merged with Garuda Clays Limited by order of the Honble High Court of Delhi dated 1^st November 1999 and the said order was filed with ROC on 4^th December 2000. Thereafter, the name of Garuda Clays Limited was changed to the present name i.e. Sainik Finance & Industries Limited. The Company is presently engaged in non-banking finance activities and is registered with Reserve Bank of India as Non-Banking Finance Company (NBFC) without accepting public deposits. The Reserve Bank of India has issued its Certificate of Registration No. N.14.02967 dated 03 September 2003. The Company launched its public offer for equity shares and is presently listed on BSE Limited.

(Amount in Rupees Lakhs)

The financial statements are prepared and presented in accordance with Indian Accounting Standards (‘Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133 of the Companies Act, 2013 (the Act) along with guidelines issued by the Securities and Exchange Board of India (SEBI) and the guidelines issued by the Reserve Bank of India (‘RBI) as applicable to a Non-Banking Finance Company (‘NBFC). The financial statements have been prepared on a going concern basis. The Company uses accrual basis of accounting except in case of significant uncertainties. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements are presented in Indian rupees.

Except as mentioned below, no amount was proposed to transfer to any reserve by the Company during the financial year under review. During the financial year under review, the Company transferred an amount of Rs.123.52 Lakhs to Special Reserve Funds in order to comply with the provisions of Section 45IA read with section 45IC of the Reserve Bank of India Act, 1934 as the Company earned profit after tax of Rs.617.61 Lakhs. As on 31^st March, 2025, the Company has made the provision of Rs.235.00 Lakhs for Sub Standard Assets and Rs.220.18 Lakhs for Standard Assets in order to comply with the guidelines of the Reserve Bank of India.

During the financial year under review, the Company was engaged in carrying on the business as Non- Banking Financial Company (without accepting public deposits) for which the certificate of registration has been obtained from the Department of Non- Banking Supervision, Reserve Bank of India, New Delhi. There is no change in the nature of business of the company during the financial year under review.

During the financial year under review, the Companys total revenue has increased to Rs.1672.82 Lakhs as compared to Rs. 1,532.59 Lakhs in the previous year. The Company also earned profit before tax of Rs.623.29 Lakhs as compared to the profit of Rs.267.86 Lakhs in the previous year. Total comprehensive income of the Company is Rs.612.21 Lakhs as compared to total comprehensive income of Rs.201.86 Lakhs during previous year.

The Company neither is subsidiary of any other company nor having any subsidiary / joint venture / associate company in India and abroad during the financial year under review.

Your Company is in adherence to the provisions of Indian Accounting Standards (Ind AS) with respect to computation of Stage-3 Assets Non- performing assets (NPA). Your Companys assets have been classified based on expected performance. Exposure at Default (EAD) is the total amount outstanding including accrued interest as on the reporting date.

During the financial year under review, your Company was able to ascertain its gross NPAs at Rs.235.00 Lakhs as compared to Rs.249.05 Lakhs in previous year. Your Company reviews the delinquency and loan portfolio on regular basis. Further, the information on the business overview and outlook and state of affairs of your Company have been discussed in detail in the MDA which forms part of this Annual Report.

The Authorised share capital of the Company is Rs.1100.00 Lakhs divided into 11000000 Equity shares of Rs.10/- each. Issued, Subscribed and Paid up Share Capital of the Company is Rs.1088.00 Lakhs divided into 10880000 Equity Shares of Rs.10/- each fully paid up.

Out of the above said issued and paid up shares capital, 9493802 Equity shares being 87.26% of the Companys paid up equity shares capital are in dematerialized form as on 31^st March, 2025 and balance 1386198 Equity Shares being 12.74% of the Companys paid up equity shares capital are in physical form. However, 100% shareholdings of the promoter and promoters group are in dematerialised form. The Company & its RTA frequently, in order to comply with the provisions of SEBI circulars issued from time to time, request all the shareholders who hold equity shares in physical form to get their equity shares dematerialised with their depository at earliest. Our Registrar & Transfer Agent is M/s Indus Shareshree Private Limited (Erstwhile known as Indus Portfolio Private Limited), having their communication office at G-65, Bali Nagar, New Delhi -110015.

Your directors do not recommend any dividend for payment to the shareholders / members of the Company for the financial year ended on 31^st March, 2025.

10. DIRECTORS & KEY MANAGERIAL PERSON (KMP) OF THE COMPANY

As on financial year ended 31^stMarch, 2025, there were Six (6) Director on Board of the Company, comprising of three (3) Independent Directors (including one Women Independent Director) and three (3) Non-Executive Non-Independent Directors. However, subsequent to the financial year under review, Sh. Rudra Sen Sindhu, Non-Executive Non-Independent Director, tendered his resignation from directorship of the Company w.e.f. 28^th May, 2025. Consequently as on date, there are five (5) Directors on the Board of Directors of the Company, comprising of three (3) Independent Directors (including one Women Independent Director) and Two (2) Non-Executive Non-Independent Directors. The details of Board of Directors of the Company are given below:

In term of the Section 152 of the Act and Articles of Association of the Company, Sh. Sarvesh Sindhu (DIN-06545787), Non-Executive director of the Company, retires by rotation at ensuing Annual General Meeting and being eligible, offered himself for re-appointment. Your directors recommend his re-appointment, as Non-executive director of the Company, for approval of the members/ shareholders of the Company at the ensuing AGM.

Subsequent to the financial year under review, the following changes were occurred in the Board of Directors of the Company:

The Company has whole time Key Managerial Personnel in terms of the provisions of Section 203 of the Act read with rules made thereunder. As on date, the following are the key managerial personnel of the Company:

11. DECLARATION BY INDEPENDENT DIRECTORS

The independent directors have submitted their declaration of independence stating that they meet the criteria of independence as provided under section 149(6) of the Act read with regulation 16 of the SEBI Listing Regulations, as amended from time to time. The independent directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.

The Board took on record the declaration and confirmation submitted by the independent directors with regard to meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the SEBI Listing Regulations.

During the financial year under review, non-executive independent directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

12. COMPLIANCE WITH CODE OF CONDUCT

All Board members and senior management personnel have affirmed compliance with the Companys Code of Conduct during the financial year under review. A declaration to this effect signed by the Chief Executive Officer is included in this Annual Report.

13. PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS, ITS COMMITTEE AND INDIVIDUAL DIRECTORS.

In compliance with the requirement of the Companies Act, 2013 and the SEBI Listing Regulations, as amended from time to time, the Board of Directors on annual basis evaluates the functioning of the Board, its committees, and of the Individual Directors (including Independent Directors). The Board as a whole and the committee thereof were being evaluated on various parameters including but not limited to their compositions, experience, qualifications, diversity, roles and responsibility of each and every directors towards stakeholders, strategic participation, governance compliances, culture and dynamics and quality of relationship between Board Members and the Management.

The individual directors including independent directors are also evaluated on the basis of their qualifications, experience, knowledge and their competency and while evaluating the performance of each and every director individually, the Board also gives utmost check to their ability to work as team, commitment towards the functions assigned, contribution and availability at Board Meeting and other business matters etc.

The review concluded by affirming that the Board as a whole, the committee(s), and the individual director continued to display a commitment to good governance by ensuring a constant improvement of processes and procedures and contributed their best in the overall growth of the organization.

14. DIRECTOR APPOINTMENT AND REMUNERATION POLICY

The Board, on the recommendation of the Nomination and Remuneration Committee, adopted a "Policy on Nominations and Remuneration for Directors, Key Managerial Executives, Senior Management and other Employees", which, inter-alia, lays down the criteria for identifying the persons who are qualified to be appointed as directors and / or Senior Management Personnel of the Company, along with the criteria for determination of qualification, positive attributes independence of a director and remuneration of directors, KMPs, Senior Management and other employees and their evaluation and includes other matters, as prescribed under the provisions of Section 178 of the Act and SEBI Listing Regulations. The Policy on Nominations and Remuneration for Directors, Key Managerial Executives, Senior Management and Other is available on the Companys website www.sainikfinance.com.

Disclosure under section 197 (12) of the Companies Act, 2013 read with rules made thereunder

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) is given below:

None of employees of the Company has received remuneration of Rs.1,02,00,000 per annum and Rs.8,50,000 per month during the financial under review. Details of employees remuneration as required under provisions of section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the registered office of the Company during working hours 21 days before the Annual General Meeting and shall be made available to the shareholders on their written request.

15. BOARD MEETINGS HELD DURING THE FINANCIAL YEAR UNDER REVIEW

During the financial year under review, Four (4) Board Meetings were convened and held. The details of Board and Committees meetings held during the financial year under review are given in the Corporate Governance Report attached herewith. The maximum interval between any two Board and Audit Committee meetings did not exceed 120 days as prescribed by the Companies Act, 2013 and SEBI Regulations.

Additionally, a meeting of the Independent Directors of the Company was held on 12^th February, 2025, with the participation of Independent Directors of the Company at this meeting.

16. AUDIT COMMITTEE

During the financial year under review, the Audit Committee comprises of Smt. Nishi Sabharwal (Chairperson), Sh. Rudra Sen Sindhu (Member), Sh. Bharat Sinh (Member) and Sh. Ramesh Shah (Member). However, subsequent to the financial year under review, the composition of Audit Committee of the Company has been changed with effect from 28^th May, 2025 and now it comprises of Smt. Nishi Sabharwal (Chairperson), Sh. Sarvesh Sindhu (Member), Sh. Bharat Sinh (Member) and Sh. Ramesh Shah (Member) as on date. The Company Secretary of the Company acts as Secretary to the Committee.

During the financial year under review, all the recommendations made by the Audit Committee were accepted by the Board.

17. STAKEHOLDERS RELATIONSHIP COMMITTEE

During the financial year under review, the Stakeholders Relationship Committee comprises of Sh. Rudra Sen Sindhu (Chairperson), Sh. Kuldeep Singh Solanki (Member) and Sh. Bharat Sinh (Member).

However, subsequent to the financial year under review, the composition of Stakeholders Relationship Committee of the Company has been changed with effect from 28^th May, 2025 and now it comprises of Sh. Sarvesh Sindhu (Chairperson), Sh. Kuldeep Singh Solanki (Member) and Sh. Bharat Sinh (Member). The Company Secretary of the Company acts as Secretary to the Committee.

18. NOMINATION AND REMUNERATION COMMITTEE

During the financial year under review, the Nomination and Remuneration Committee comprises of Smt. Nishi Sabharwal (Chairperson), Sh. Bharat Sinh (Member) and Sh. Rudra Sen Sindhu (Member).

However, subsequent to the financial year under review, the composition of Nomination and Remuneration Committee of the Company has been changed with effect from 28^th May, 2025 and now it comprises of Smt. Nishi Sabharwal (Chairperson), Sh. Bharat Sinh (Member) and Sh. Sarvesh Sindhu (Member). The Company Secretary of the Company acts as Secretary to the Committee.

19. CORPORATE SOCIAL RESPONSIBILITIES COMMITTEE

During the financial year under review the Corporate Social Responsibilities Committee comprises of Sh. Rudra Sen Sindhu (Chairperson), Sh. Kuldeep Singh Solanki (Member) and Smt. Nishi Sabharwal (Member).

However, subsequent to the financial year under review, the composition of Corporate Social Responsibilities Committee of the Company has been changed with effect from 28^th May, 2025 and now it comprises of Sh. Sarvesh Sindhu (Chairperson), Sh. Kuldeep Singh Solanki (Member) and Smt. Nishi Sabharwal (Member). The Company Secretary of the Company acts as Secretary to the Committee.

20. DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors acknowledges the responsibility for ensuring compliance with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act, 2013 in the preparation of the Financial Statement for the financial year ended on 31^st March, 2025 and state that:

i) in the preparation of Annual Accounts for the financial year ended as at 31^st March, 2025, the applicable Accounting Standards have been followed along with proper explanation relating to the material departures.

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year ended as at 31^st March, 2025 and of the profit and loss of the Company for the financial year ended on 31^st March, 2025.

iii) the Directors have 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 or other irregularities.

iv) the Directors have prepared the Annual Accounts on a "Going Concern basis".

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) the director had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during financial year 2024-25.

21. PUBLIC DEPOSITS

The Company has not invited or accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder and section 45-I (bb) of the Reserve Bank of India Act, 1934 during the financial year under review. The Company does not hold any public deposit as on date and will not accept the same in future without the prior approval of Reserve Bank of India in writing.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company, being an NBFC registered with the RBI and engaged in the business of giving loans in ordinary course of its business, is exempt from complying with the provisions of section 186 of the Act read with rules made thereunder, with respect to loans, investment and guarantees etc. Accordingly, the Company is exempted from complying with the requirement to disclose in the financial statement / this report the full particulars of the loans given, investment made or guarantee given or security provided.

23. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate system of internal financial control geared towards achieving efficiency in its operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. The Company has an internal control system, commensurate with the size, scale and complexity of its operations/ business. Testing of such internal control measures and systems forms a part of internal audit function. The Internal Auditors of the Company conduct audits of various departments based on an annual audit plan covering key areas of operations. Internal Audit reviews and evaluates the adequacy and effectiveness of internal controls, ensuring adherence to operating guidelines and systems and recommending improvements for strengthening them. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Audit Committee of the Board of Directors reviews the adequacy of internal financial controls. This has improved the management of the affairs of the Company and strengthened transparency and accountability. The Management ensures adherence to all internal financial control policies and procedures as well as compliance with regulatory guidelines. All recommendations & suggestions which have been received from the internal auditors of the Company are taken on record and are suitably implemented by the Management. However, no significant audit observations and recommendations have been received from the internal auditors of the Company which shall have major financial impact to the Company.

24. AUDITORS OF THE COMPANY

a) Statutory Auditors:

Pursuant to the provisions section 139, 142 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder and pursuant to the recommendations of the Audit Committee of the Board of Directors of the Company, M/s. Kumra Bhatia & Co. Chartered Accountants, New Delhi (having Firm Regn.No.002848N) have been appointed as the Statutory Auditors of the Company in its 30^th AGM of the Company held on 30^th September, 2022 for the first term of consecutive five years from the conclusion of 30^th AGM till the conclusion of 35^th AGM of the Company to be held for the financial year ended 31^st March, 2027, at a remuneration as may be mutually agreed between the Board and the Statutory Auditors.

Besides the audit services, the Company also obtain certifications from the Statutory Auditors under various statutory regulations and certifications required by clients, banks, statutory authorities, audit related services and other permissible non-audit services as required from time to time, for which they will be remunerated separately on mutually agreed terms, as approved by the Board in consultation with the Audit Committee.

Statutory Auditors Report:

The Statutory Auditors have not made any adverse comments or given any qualification, reservation or adverse remarks or disclaimer in their Audit Report on the Annual Financial Statements for financial year 2024-25. Audit Report & the notes to the financial statement referred to in the Auditors Report are self -explanatory and do not call for any further comments. Further, the Statutory Auditors have not reported any fraud in terms of Section 143(12) of the Companies Act, 2013.

b) Secretarial Auditors:

Pursuant to the provisions of section 204 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has, at its meeting held on 12^th August, 2024 appointed M/s Rakesh Kumar & Associates, Company Secretaries in practice to undertake the Secretarial Audit of the Company and to issue / submit Secretarial Audit Report & Secretarial Compliance Report for the financial year 2024-25.

c) Secretarial Audit Report and Secretarial Compliance Report

The Secretarial Audit Report submitted by the Secretarial Auditor for the financial ended 31^st March, 2025 in prescribed Form MR-3 is annexed as an Annexure– A and is forming integral part of this report. Such Secretarial Auditors report is also self-explanatory and does not contain any qualifications, reservations or adverse remarks or disclaimer.

In addition to the Secretarial Audit Report, Secretarial Compliance Report has also been issued by the Practicing Company Secretary as per the SEBI Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024. The said report has also been submitted to the Stock Exchanges within the prescribed timeline. In terms of Regulation 24A of the Listing Regulations, 2015, Secretarial Compliance Report issued by M/s Rakesh Kumar & Associates, Company Secretaries in Practice.

25. CERTIFICATE FROM PRACTISING COMPANY SECRETARY WITH REGARD TO NON DISQALIFICATION OF DIRECOTRS

A certificate from M/s Rakesh Kumar & Associate, Practicing Company Secretary to the effect that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of the Company by the Ministry of Corporate Affairs, Securities and Exchange Board of India or any other statutory authority is attached herewith as Annexure -B and is forming integral part of Corporate Governance Report and this report.

26. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

With an aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly, a familiarization program has been designed for the Independent Directors. Pursuant to Regulation 25(7) of SEBI Listing Regulation, the Company makes detailed presentations to the Board including Independent Directors, on the Companys operation and business plans, the nature of industry in which Company operates, and model of respective businesses, major risks involved, if any and risk management strategy of the Company.

The Independent Directors are made aware with their duties, role, responsibilities and liabilities at the time of their appointment / reappointment through a formal letter of appointment which stipulates various terms and conditions of their engagement apart from clarifying their roles and responsibilities

During the financial year under review the Company also organised various programme to familiarise independent directors with regard to nature of industry in which company operates, business model of the company, their roles, rights and responsibilities etc. details of which are on the web link of website of the company i.e. "SFIL_Details of Familiarisation Programmes imparted to IDs_2025.pdf"

27. CODE OF CONDUCT

The Board of directors has approved a Code of Conduct which is applicable to the members of the Board and all employees in the course of day to day business operations of the Company. The Code has been placed on the Companys website www.sainikfinance.com. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

28. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with the rules made thereunder and pursuant to the provision of SEBI (Listing Obligations and Disclosure Requirements), 2015, the Company has established a Vigil Mechanism to be known as the ‘Whistle Blower Policy for its Directors and Employees, to report instances of unethical behaviour, actual or suspected, fraud or violation of the Companys Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of Whistle Blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases.

Accordingly, Vigil Mechanism / Whistle Blower Policy have been formulated with a view to provide a mechanism for the directors and employees of the Company to approach the ethics officer or the Chairman of the Audit Committee of the Company. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about serious irregularities within the Company. During the financial year 2024-25, no such complaint of unethical or improper activity has been received by the Company.

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

The particular as prescribed under Rule 8(3) of the Companies (Accounts) Rules, 2014 read with the provisions of Section 134(3) (m) of the Companies Act, 2013 are as follow:

A) Conservation of energy-

B) Technology absorption, adaption and innovation:

C) Foreign exchange earnings and Outgo

During the financial year under review, there was no Foreign Exchange Earnings and Foreign Exchange Outgo.

30. MATERIAL CHANGES AND COMMITMENTS, IF ANY

Apart from the information provided / disclosures made elsewhere in the Directors Report including annexures thereof, there are no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year of the Company i.e. 31^st March, 2025 to which this financial statement relates and till date of this Report.

31. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms length basis. The main business of the Company is financing & investment in securities etc. and granting loans to related or unrelated parties. All related party transactions are placed before the Audit Committee for their consideration and approval. None of the transactions with related parties falls under the scope of section 188(1) of the Act because they were in ordinary course of business and on an arms length basis. However, the related party transactions so entered are disclosed in note No.36 to Financial Statement of the Company as attached herewith. Further details of all related party transactions are also given in AOC-2 attached herewith as Annexure-C is forming integral part of this

Report. The Material related party transactions have been duly approved by the Shareholders of the Company. The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions duly approved by the Board of Directors of the Company has been placed on the Companys website www.sainikfinance.com

32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34(2)(e) of the SEBI Listing Regulations, the Managements Discussion and Analysis Report covering the performance and outlook of the Company is annexed herewith as Annexure-D and forming part of this Annual Report.

33. CORPORATE GOVERNANCE REPORT

The Company is committed to good Corporate Governance as the requirement of the Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Regulations"). As required under Schedule V of SEBI Regulations, a detailed report on Corporate Governance together with certificate issued by M/s Rakesh Kumar & Associates, Practicing Company Secretary on compliance of conditions of Corporate Governance is annexed herewith as Annexure–E and is forming integral part of this Report.

34. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the financial year under review, the Company was not required to spend any amount on CSR activities because Company did not meet any of the criteria as provided under provision of section 135 of Companies Act, 2013 as amended and rules made thereunder and any amendment thereof for spending the money of CSR Activities. The Policy on CSR has been placed on the Companys website www.sainikfinance.com

During the previous year ended 31^st March, 2024, the Company earned net profit of Rs.2.68 Cr. (Rupees Two Crore Sixty Eight Lakhs) as calculated in accordance with the provisions of section 198 of the Companies Act, 2013. However, the Companys average net loss for preceding three financial years is Rs.1.40 Cr. (One Crore Forty Lakhs). Hence, the Company did not require to spend any amount on CSR activities during the financial year 2024-25

The annual report on CSR activities prepared in prescribed format / annexure as per the Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached herewith as Annexure-F and it shall be an integral part of Board Report.

35. DISCLOSURE RELATING TO MAINTENANCE OF COST RECORD

As the Company is Non-Banking Finance Company, the Central Government does not require to maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013. Hence, the provisions of Cost Audit are not applicable to the Company.

36. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 notified on December 9, 2013, the Company has a policy for Prevention of Sexual Harassment of Women at Workplace and has complied with the provisions of this Act. During the financial year ended 31^st March 2025, no complaint of sexual harassment has been received, disposed off and pending more than ninety days with the Company during the financial year under review.

37. STATEMENT WITH RESPECT TO THE COMPLIANCE OF THE PROVISION RELATING TO THE MATERNITY BENEFIT ACT

1961

As per the provision of section 2(1)(b) of the Maternity Benefit Act, 1961 read with rules made thereunder, it applies in the first instance to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months. Provided that the State Government may, with the approval of the Central Government, after giving not less than two months notice of its intention of so doing, by notification in the Official Gazette, declare that all or any of the provisions of this Act shall apply also to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.

The Company neither have 10 (Ten) or more person employed therein on any day of the preceding twelve months nor the State Government declared that all or any of the provisions of this Act shall apply to the Company, therefore, the provisions of the Maternity Benefit Act, 1961 is not applicable to the Company during the financial year under review.

38. DISCLOSURE ABOUT THE SHARES ISSUED ON PREFERENTIAL BASIS, IF ANY.

During the financial year under review, your Company has not made any allotment of shares on preferential basis.

39. DISCLOSURE ABOUT SWEAT EQUITY SHARES AND ESOP SCHEME.

Your company has not issued sweat equity shares or given stock option in the financial year under review.

40. SECRETARIAL STANDARDS OF ICSI

The Company has complied with the requirements prescribed under the Secretarial Standards on meetings of the Board of Directors (SS–1) and General Meetings (SS–2).

41. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant and material orders passed by the regulators/ courts/ tribunal that would impact the going concern status of the Company and its future operations.

42. ANNUAL RETURN

In compliance with the provision of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the copy of annual Return in Form MGT-7 is placed on the website of the Company under sub tab ‘Annual Returns at www.sainikfinance.com.

43. OTHER STATUTORY DISCLOSURES

a) The securities of the Company were not suspended from trading during the financial year under review on account of corporate actions or otherwise.

b) The Company has not defaulted in repayment of loans from banks and financial institutions. There were no delays or defaults in payment of interest / principle of any of its debt securities.

c) During the financial year under review, there was no instance of one-time settlement with Banks or Financial Institutions.

Therefore, as per rule 5(xii) of Companies (Accounts) Rules, 2014, reasons of difference in the valuation at the time of onetime settlement and valuation done while taking loan from the Banks or Financial Institutions are not reported.

d) The Securities of the Company are listed on BSE Limited, Mumbai. The listing fee for the financial year- 2025-26 has been paid.

e) During the financial year under review, the Company has neither made any application nor any proceeding were pending under the Insolvency and Bankruptcy Code, 2016 ("IBC Code"). At the end of the financial year, Company did not have any proceedings under IBC Code.

44. ACKNOWLEDGEMENT

The Board of Directors places its gratitude and appreciation for the support and cooperation from its members, the RBI and other regulators, banks, financial institutions and employees during the financial year under review. The directors also acknowledge with appreciation the support and co-operation rendered by various Government authorities and departments. Your Directors would also wish to place on record their deep sense of appreciation for the continued support of all the investors of the Company.

Form No MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2025

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 09 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

SAINIK FINANCE & INDUSTRIES LIMITED CIN-L26912DL1991PLC045449 Regd. Office: 129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi-110035

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by SAINIK FINANCE & INDUSTRIES LIMITED (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

a) Maintenance of Secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

b) We have followed the audit practices and processes as appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on the test basis to ensure that correct facts are reflected in Secretarial records. We believe that the processes and practices, followed provide a reasonable basis for our opinion.

c) We have not verified the correctness and appropriateness of financial records and books of accounts of the Company.

d) Wherever required, we have obtained the Management representation about compliance of laws, rules and regulations and happenings of events etc.

e) The compliance of provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. Our examination was limited to the verification of procedures on test basis.

f) The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor effectiveness with which the management has conducted the affairs of the Company.

Based on our verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, I hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2025 complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2025 according to the provisions of;

I) The Companies Act, 2013 ("the Act") and the rules made there under as amended from time to time. II) The Securities Contracts (Regulation) Act, 1956 and the rules made there under; III) The Depositories Act, 1996 and the regulations and bye-law framed hereunder;

IV) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of foreign direct investment, overseas direct investment and External commercial Borrowings. (No event took place under this act during the audit period).

V) The following regulations and guidelines prescribed under the Securities and Exchange Board of India, 1992 ("SEBI Act") and as amended from time to time;

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (No event took place under these regulations during the audit period).

(d) The Securities and Exchange Board of India (Listing Obligation & Disclosure Requirements) Regulations, 2015.

(e) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (No event took place under these regulations during the audit period).

(f) The Securities and Exchange Board of India (Issue and Listing of Securities Debt Instruments and Security Receipts) Regulations, 2008 (No event took place under these regulations during the audit period).

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (No event took place under these regulations during the audit period).

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (No event took place these regulations during the audit period).

(i) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993.

VI) The Company has also complied with the provisions of the following laws to the extent of which they are applicable to the Company:

(a) The Employees Provident Fund and Miscellaneous Provision Act, 1952. (b) Industrial Dispute Act, 1947, (c) The Payment of Wages Act, 1936, (d) The Payment of Minimum Wages Act, 1948 (e) The Payment of Bonus Act, 1965, (f) The Payment of Gratuity Act, 1972, We have also examined compliance with the applicable clauses of the following;

I. The Secretarial Standards (SS-1 and SS-2) issued by the Institute of Company Secretaries of India is applicable to the Company during the audit report.

II. The Listing Agreements entered into by the Company with BSE Limited, a Stock Exchange in compliance of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable regulations / guidelines/ circulars as may be issued by SEBI from time to time.

III. Reserve Bank of India Act, 1934,

IV. Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.

During the period under review and as per the explanations, clarifications, representations made by the management to us, we report that, the Company has substantially complied with the provisions of the Act, rules, regulations, guidelines and standards etc. that are applicable to the Company.

We further report that compliance of applicable financial laws including direct and indirect tax laws by the Company has not been reviewed in this Audit since the same has been subject to review by Statutory Auditor and other designated professionals.

We further report that the Company has, in our opinion, complied with the provisions of the Companies Act, 2013 and the Rules made thereunder and the Memorandum and Articles of Association of the Company, with regard to:

a) Maintenance of various statutory registers and documents and making necessary entries therein;

b) Forms, returns, documents and resolutions required to be filed with the Registrar of Companies and the Central Government etc.;

c) Service of documents by the Company on its Members, Auditors and the Registrar of Companies; d) Notice of Board Meetings and Committee Meetings of Directors; e) The meetings of Directors and Committees of Directors including passing of resolutions by circulation; f) The Annual General Meeting during the period was held on Monday, 30^th September, 2024; g) Minutes of proceedings of General Meetings and of the Board and its Committee meetings;

h) Approvals of the Members, the Board of Directors, the Committees of Directors and the government authorities, wherever required; i) Constitution of the Board of Directors / Committee(s) of Directors, appointment, retirement and reappointment of Directors including KMPs;

j) Payment of remuneration to Directors including KMPs; k) Appointment and remuneration of Auditors of the Company; l) Transfers and transmissions of the Companys shares; m) Investment of the Companys funds including investments and loans to others;

n) Form of Balance Sheet as prescribed under Part I, form of statement of profit and loss as prescribed under Part II and General Instructions for preparation of the same as prescribed in Schedules to the Act;

o) Directors report; p) Contracts, common seal, registered office and publication of name of the Company; and q) Generally, all other applicable provisions of the Act and the Rules made under the Act. We further report that:

As explained by the management, the Company has made related party transactions in ordinary course of business which is on arms length basis as decided by the Audit Committee in their meeting during the financial year.

With reference to the compliance of Industry specific acts, the Company is an investment and finance Company which is engaged in non-banking financial services and does not accept any public deposits, therefore, the Company ensures compliance with relevant provisions and processes of RBI Act and other applicable acts on periodic basis. In this regard, we have relied upon management representation issued to us and compliance certificates placed before the Board of Directors and also reports of statutory and internal auditors of the Company. Our report of compliance would be limited to their reporting and subject to the observations and comments made by them in their report, if any.

During the audit period, there were no specific events/ actions having a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. as referred above.

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

To,

The Members of

Sainik Finance & Industries Limited

Regd. Office: 129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi- 110035.

FORM AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso is given below:

Sainik Finance & Industries Limited did not enter into any contract or arrangement or transaction with its related parties which is not at arms length during financial year 2024-25.