Srestha Finvest Director Discussions


TO THE MEMBERS OF SRESTHA FINVEST LIMITED

Your Directors have pleasure in presenting the 38th Directors Report of SRESTHA FINVEST LIMITED (the Company) along with the Audited financial statements for the financial year ended March 31, 2023.

1. FINANCIAL RESULTS

The financial results of the Company for the year ended March 31, 2023 is summarized below:

(Rs in iakhs)

Particulars Year Ended March 31, 2023 Year Ended March 31, 2022
Income from Operations 274.71 230.16
Non-operating Income 0.00 0.38
Total Income 274.71 230.55
Total Expenditure 708.99 164.36
Profit/Loss before Depreciation, Interest and Taxation (434.29) 66.18
Interest & Finance Charges 30.73 68.28
Depreciation 2.70 0.45
Profit/Loss before Tax (467.71) (2.54)
Provision for Current Taxes 27.43 1.48
Provision for Deferred Taxes 2.27 0.02
Profit/Loss after Tax (497.41) (4.05)
Other Comprehensive Income 4.27 (0.74)
Transfer to Reserves 0.00 0.00
Balance carried to Balance Sheet (493.13) (4.79)

2. BUSINESS EXCELLENCE AND QUALITY INITIATIVES

Your Company continues to be guided by the philosophy of business excellence to achieve sustainable growth.

3. DIVIDEND

Due to losses no Dividend has been declared during the year.

4. TRANSFER TO RESERVES

Due to loss the company has abstained from transfer to any reserves.

5. OPERATING RESULTS AND BUSINESS OPERATIONS

During the financial year 2022 - 2023, your Company has incurred a loss of Rs. 497.41 Lakhs as compared to the loss of Rs. 4.05 Lakhs in previous year 2021 - 2022.

6. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE END OF THE FINANCIAL YEAR TILL THE DATE OF THE REPORT

There has been no material changes and commitment affecting the financial performance of the Company which had occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of this Report.

7. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that:

(i) in the preparation of the annual accounts for the financial year 2022-23, the applicable accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgment sand 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 end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL Change in Directors and KMP during the financial year Appointments:

Executive Director

Considering the growth and complexity of the business of the Company and based on the recommendation of Nomination and Remuneration Committee, the Board, at its meeting held on October 17, 2022, approved the appointment of Mr. Sunil Bhandari as Wholetime Director and Chief Financial Officer of the Company for a period of 5 years with effect from October 17, 2022.

Independent Director

On recommendation of Nomination and Remuneration Committee (NRC), the Board, at its meeting held on October 17, 2022, appointed Mr. Umeshbhai Hirjibhai Padariya as an independent director of the Company for a period of five consecutive years effective from October 07, 2022.

The Board is of the opinion that Mr. Umeshbhai Hirjibhai Padariya is a person of integrity, expertise, and competent experience and proficiency to serve the Company as an independent director that can strengthen the overall composition of the Board.

As per the provisions of the Act, the Independent Directors are not liable to retire by rotation.

Resignation:

Due to professional commitments, Mr. Hemant D Chaudhari (DIN: 06516079) resigned from the post of non-executive Independent director of the Company with effect from close of business hours on October 07, 2022. The Board places on record its sincere appreciation for the valuable contribution made by him during his long tenure as director on the Board of the Company.

Re-designation:

Mr. Sahadevsinh Babubha Rana was redesignated as Non-Executive Director with effect from October 14, 2022

The Company has received approval of the Members of the Company on January 04, 2023 through Postal Ballot for appointment of Mr. Umeshbhai Hirjibhai Padariya as Non-Executive Independent Director, Mr. Sunil Bhandari as Wholetime Director and Chief Financial Officer and re-designation of Mr. Sahadevsinh Babubha Rana as Non-Executive Director pursuant to his relinquishment of the position of Whole Time Directorship and Chief Financial Officer of the Company.

Directors liable to retire by rotation

Mr. Sahadevsinh Babubha Rana (DIN: 09269488) retires by rotation at the ensuing AGM, being eligible, offers himself for re-appointment. Brief details of Mr. Sahadevsinh Babubha Rana (DIN: 09269488), who is seeking re-appointment, are given in the Notice of 38th AGM

Key Managerial Personnel

During the year, Mr. Sunil Bhandari, resigned from the post of Chief Executive Officer (CEO) with effect from close of business hours on October 17, 2022

Pursuant to the provisions of Section 203 of the Act, Mr. Sunil Bhandari (Wholetime Director cum CFO) and Mr. A. Jitendra Kumar Bafna (Company Secretary) are the Key Managerial Personnel of the Company as on March 31, 2023.

During the year, the Non-Executive Directors and KMP of the Company had no pecuniary relationship (except the disclosure made above in this report) or transactions vis-a-vis the Company.

9. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company have submitted a Declaration that each of them meets the criteria of Independence as provided in Sub-Section (6) of Section 149 of the Companies Act, 2013 along with relevant Rules framed thereunder and Regulation 16 (1) (b) of SEBI Listing Regulations. 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. However, Mr. Umeshbhai Hirjibhai Padariya is in the process of completion of online proficiency self-assessment test as per the timeline notified by the Ministry of Corporate Affairs. Further, there has been no change in the circumstances which may affect the status of independent directors during the year.

10. NUMBER OF MEETINGS OF THE BOARD

During the year, eleven meetings of the Board of Directors of the Company were held, details of which are set out in page no. 22 of Corporate Governance Report which forms part of this report.

11. AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is also a part of this report. Further, there have been no instances during the year where recommendations of its Committees were not accepted by the Board.

12. BOARD EVALUATION

The evaluation framework for assessing the performance of the Directors of your Company comprises of contributions at the Meeting(s) and strategic perspective or inputs regarding the growth and performance of your Company, amongst others. Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board has carried out an Annual Evaluation of its own performance and the working of its Committees, based on the evaluation criteria defined by Nomination and Remuneration Committee (NRC) for performance evaluation process of the Board and its Committees for the year under review.

A separate meeting of the independent directors was conducted, which reviewed the performance of non-independent directors, the Board as a whole and Chairperson of the Company taking into account the views of executive directors and non-executive directors. The evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The evaluation has been satisfactory and meets the corporate governance requirement of the Company. The Board was satisfied that the committees are functioning well and besides covering their terms of reference, as mandated by law, important issues are brought up and discussed in the committee meetings.

The Board was also satisfied with the contribution of the Directors, in their respective individual capacities.

13. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under section 178(3) of the Act are covered in corporate governance report which forms part of this Report. The said Policy is available on the website of Company at https://www.srestha.co.in/pdf/policies2023/Nomination-and-Remuneration-Policy.pdf

14. ANNUAL RETURN

Pursuant to Section 92(3) read with 134(3) of the Act, Annual Return (in e-form MGT-7) for the financial year ended March 31, 2023 is available on the website of the Company under investor Relations tab at www.srestha.co.in.

15. RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. The Company has laid down procedures to inform the Board of Directors about the Risk Management and its minimization procedures. The Audit Committee and Board of Directors review these procedures periodically.

16. INTERNAL CONTROL

During the year under review, the Internal Financial Controls were operating effectively and no material or serious observation has been received from the Auditors of the Company for inefficiency or inadequacy of such controls. The Internal Financial Control procedure adopted by the Company are adequate for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

17. HUMAN RESOURCES DEVELOPMENT

The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Companys Health and Safety Policy commits to provide a healthy and safe work environment to all employees.

18. PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed

under the provisions of Section 197 of the Act, read with Rule5 (1) and (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

19. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Your Company, being an NBFC registered with 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 Companies Act, 2013 ("the Act") with respect to loans. Further, pursuant to the provisions of Section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

20. TRANSACTIONS WITH RELATED PARTIES

All the Related Party Transactions (RPT) that were entered into during FY 2022- 23 were not on an arms length basis and were in the ordinary course of business. Details of transactions with related parties during FY 2022- 23 are provided in the notes to the financial statements. Accordingly, the disclosure of RPTs as required under the provisions of Section 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is enclosed as Annexure - 1 to this report.

The policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company at https://www.srestha.co.in/pdf/policies2023/Related-Party-Transactions-Policy.pdf. The Directors draw attention of the Members to Notes to the Financial Statements which sets out related party disclosures.

21. DEPOSIT FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

22. VIGIL MECHANISM

Pursuant to Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company has established a vigil mechanism / Whistle Blower Policy for Directors and employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Companys Code of Governance and Ethics. The policy is available on the website of the Company at www.srestha.co.in.

23. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The details of the complaints reported pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in the Corporate Governance Report. During the financial year 2022-23, No complaints remains pending as of March 31, 2023.

24. CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per SEBI Listing Regulations, a detailed report on Corporate Governance is provided in a separate section and forms part of the Annual Report. A Certificate from Auditor regarding compliance with the conditions of Corporate Governance as stipulated in SEBI Listing Regulations is given under Annexure - 2 and forms part of this Report.

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

25. AUDITORS Statutory Auditors

M/s. J.V. Ramanujam & Co, Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of five years at the AGM of the Company held on June 22, 2018. M/s J. V. Ramanujam & Co, Statutory Auditors, vide letter dated January 10, 2023, tendered their resignation to the Board through Audit Committee, citing reason that majority of partners of the firm had called for dissolution of the firm with effect from January 01, 2023 and they are unable to continue as Statutory Auditors of the Company with effect from the same date as per the required auditing standards, legal requirements and related guidelines.

M/s Darpan & Associates, Chartered Accountants (Firm Registration No. 016156S) were appointed as Statutory Auditors to fill casual vacancy caused by resignation of M/s J V Ramanujam & Co., Chartered Accountants, at the Board meeting dated January 20, 2023 and approved by the members through Postal ballot E-voting process for which the resolution was deemed to be passed on April 18, 2023, to hold office till the conclusion of the ensuing Annual General meeting.

M/s Darpan & Associates, Chartered Accountants (Firm Registration No. 016156S), will be appointed as the Statutory Auditors of the Company for a period of 5 years until the conclusion of the 43rd Annual General Meeting and has given their consent for the same. The Board recommends their appointment at the ensuing Annual General Meeting. The Board of Directors have adopted the Auditors Report as issued by the Statutory Auditor.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.

Secretarial Auditors

As per the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed thereunder, M/s. SPAN & CO., Company Secretaries LLP, were appointed as the Secretarial Auditors of the Company to carry out the secretarial audit for the Financial Year 2022 - 2023. The Secretarial Audit Report issued in this regard is annexed as Annexure - 3

The Auditors Report and the Secretarial Audit Report for the Financial Year ended March 31, 2023, do not contain any qualification or reservation or adverse remarks.

26. DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143 (12) of the Act (including any statutory modification(s) or re-enactment(s) for the time being in force).

27. RBI GUIDELINES

The Company has duly paid the penalty, pursuant to order dated 18/05/2023 passed by the Adjudication Committee of RBI, Chennai Regional Office for non-adherence to RBI Directions for not obtaining prior approval before effecting change in the management of NBFC.

However, the Company continues to comply with all the applicable regulations, circulars, notifications, directions and guidelines issued by the Reserve Bank of India ("RBI"), from time to time, with respect to Non - Deposit Taking NBFC.

28. COMPLIANCE WITH THE PROVISIONS OF 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. However the management have incorporated certain considered view based on the practicality of business and better representation of facts in the financial statements. There are no significant impact on account of the same on the overall disclosure norms.

29. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy Rules are not applicable to the Company during the year under review.

30. SUBSIDIARY COMPANIES

Your Company has no subsidiaries. There are also no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

31. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL

There are no significant or material orders passed by the Regulators or Courts or Tribunals which impacts the going concern status of the Company and its future operations.

32. SHARE CAPITAL / CHANGES IN CAPITAL STRUCTURE

During the year 2022-23, the Company had allotted 24,75,00,000 Equity Shares of face value of Rs. 2/- each on preferential basis to specified persons of Non-Promoter, Public Category. As a result, the paid-up equity share capital of the Company was increased to Rs. 66,00,00,000/- divided into 33,00,00,000 fully paid equity shares of Rs 2/- each. The proceeds of the issue of 24,75,00,000 equity shares on a preferential basis were fully utilized by the Company for the objects stated in the Explanatory Statement to the Notice of Postal Ballot i.e. for the purpose for which those were raised.

During the year under review, except for preferential issue as above stated, the Company has neither issued any shares with differential voting rights or granted stock options or issued sweat equity or purchased its own shares nor the company has made any Public/ Rights/ Bonus/Buy back of Equity Shares of the Company.

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

The Disclosure stipulated as under Section 134(3) of Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is as under:

• The Company is not a Manufacturing company nor does the company has any Energy Consumption based business other than normal consumption of Energy in Administrative Office. The company deploys all the possible measure to conserve the energy and increase usage of green energy.

• The Company is not involved in any Technological Absorption based activities. Hence same is not reportable.

• The Company has not dealt in any Foreign Exchange in any manner during the year under review. Hence the same is not reportable.

34. OTHER DISCLOSURES

• The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Act.

• No application for Bankruptcy under the Insolvency & Bankruptcy Code, 2016 ("IBC") was made against the Company during the financial year under review. However, the IBC law is not applicable to NBFC Company.

• The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable

35. ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.

On behalf of the Board of Directors
For Srestha Finvest Limited
Sd/-
Place: Chennai Sitaben S Patel
Date: August 14, 2023 Chairperson