Srestha Finvest Ltd Management Discussions

Srestha Finvest Limited is a Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India (RBI) under the category as NBFC - Investment and Credit Company (NBFC - ICC) and is classified as NBFC - Base Layer pursuant to RBI (NBFC -Scale Based Regulation) Directions, 2023. Your company currently operating in the finance, Loans, investment, Consultancy, dealing in securities activity and it anticipates that there appears to be huge potential for growth. Also, the company is now poised to grow, building a reputation of quality, craftsmanship and expertise.

NBFCs remain an important constituent of Indias financial sector, and continue to leverage their superior understanding of regional dynamics and customised products and services to expedite financial inclusion in India. Lower transaction costs, innovative products, quick decision making, customer orientation and prompt service standards have differentiated NBFCs from banks. Considering the reach and expanse of NBFCs, these entities are well-suited to bridge the financing gap in a large country like India.

The NBFC sector is an important stakeholder of the Indian financial sector. Strengthened regulation and enhanced oversight are in place to further strengthen the resilience of this key sector. Recognising the importance of NBFCs, a series of measures have been implemented which have played an important role in strengthening the NBFCs. For instance, considering the growing size, complexity and interconnectedness of NBFCs, a revised scale-based regulatory framework has been implemented to harmonise the regulations of NBFCs with those of banks, wherever appropriate.

In a dynamic industry such as financial sector the company has added opportunities and risks and is inherent aspect of business. The opportunities which the company is looking to harness are as mentioned below:

• Opening up of financial sector reforms in India

• Fast growing requirement for Industrial clusters leading to credit demand.

• Monetary measures of the government tightening the credit line from banks would open doors for non-banking finance companies to explore those avenues.

The companys business, results of operations and financial condition are affected by number of risks, so the risk management function is of paramount importance and integral to the functioning of the company.

The risk management framework is based on assessing risks through analysis and understanding of the underlying risks before undertaking any transactions and changing or implementing processes and systems. This risk management mechanism is supported by regular review, control, self-assessment, and monitoring of key risk indicators.

The company is currently engaged in two segments, financing and investment activities and is in line with the accounting standard on segment reporting.

In 2024, India maintained steady progress amid a rapidly evolving financial landscape. Consumer credit is expanding, alongside the growth of Non-Banking Financial Companies (NBFCs). As Indias economy grows, the requirement for credit will rise more than proportionately. Digitalisation is transforming service delivery, while regulatory focus on stability and inclusion is shaping the sectors future. These factors, alongside the governments flagship programmes like Make in India, Start-up India, Digital India, and among others, are creating a dynamic environment that is enabling NBFCs to thrive.

NBFCs are here to stay and play an important role in economic growth and financial inclusion. NBFCs with robust business models, strong liquidity mechanisms and governance & risk management standards are poised to reap the benefit of the market opportunity.

The Company foresees a better business prospects in the upcoming years.

The Company has adequate system of internal control in place. The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company has implemented required controls through systems and processes ensuring a robust control framework. This is to ensure that assets are safeguarded, all transactions are authorized, recorded and correctly reported and to ensure operational excellence. The Board and the Audit Committee reviews the performance of the audit and compliance functions and reviews the effectiveness of controls and compliance with regulatory guidelines. In the opinion of Board, internal control systems are well placed and working in an efficient manner.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to extent and in accordance with the Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rules 2015, as amended, to comply with the Accounting Standards notified under Section 133 of the Companies Act, 201 3 read with relevant Rules issued thereunder. The financial statements have been prepared on accrual basis under the historic cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

This Report is based on the current situation, past experience and information available to the Company about its various businesses and assumptions regarding economic and industrial scenario, Governmental and other regulatory policies. The Performance of the Company is, to a great extent, dependent on these factors. The future performance may be materially influenced by the changes in any of these factors, which are beyond the control of the Company and may affect the views expressed in or perceived from this Report. Therefore the investors are requested to make their own independent judgments by taking into account all relevant factors before any investment decision.

The Key Ratios as applicable to the Company are disclosed in the Notes to the Financial Statements.