SRS Finance Ltd Directors Report.

To,

The Members,

The Directors of your Company present the 23 Annual Report of the Company, along with the audited statement of accounts for the financial year 2016-17.

FINANCIAL RESULTS

The results for the year ended 31 March, 2017 are as follows: -

(Amount in Lacs)

Particulars 31.03.2017 31.03.2016
Gross Sales/Operational Revenues 1795.31 5294.43
Other Income 21.75 13.38
Total Income 1817.06 5307.81
Profit/(Loss) before Finance Cost, Depreciation & Amortization (268.65) 1816.15
Expense and Tax
Finance Cost 1151.95 1272.64
Profit/(Loss) before Depreciation & Tax (1420.60) 543.50
Depreciation & Amortization Expense 12.74 20.93
Profit/(Loss) before Tax (1433.34) 522.57
Provision for Tax
- Current 0.00 257.04
- MAT Credit 0.00 0.00
- Deferred Tax 70.70 (67.40)
- Earlier Years - 0.15
Profit after Tax (1504.04) 332.77
Amount transferred to Special Reserve u/s 45-IC of RBI Act, 1934 0.00 66.55
Earning Per Share (Rs.)
- Basic (1.533) 0.339
- Diluted (1.533) 0.339

RESULTS OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

Your Company had a decline in its key indicators such as turnover and profitability. Total revenue declined from Rs.5307.81 Lacs in the previous year to Rs.1817.06 Lacs in the current year. The Company also suffered losses of Rs.1433.34 Lacs during the current year. The decline in key financial indicators was attributed to an overall slowdown in the economy.

DIVIDEND

As there are losses in the Company, no dividend has been recommended for the year ended 31 March, 2017.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2017 was Rs. 98, 12, 15,930/-.During the year under review,

Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

Your Company has not issued any shares (including sweat equity shares) under ESOS scheme for its employees/Directors

Equity Share Capital of the Company is listed on Bombay Stock Exchange.

TRANSFER TO RESERVES

During the year under review, as there were losses, hence no amount was transferred to Special Reserves under section 45-IC of RBI

Act, 1934.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of the provisions of Section 152 of the Companies Act, 2013, Sh. Bishan Bansal, is due to retire by rotation at the forthcoming

Annual General Meeting of the Company and being eligible offers himself for re-appointment as Director of the Company.

Sh. Naresh Goyal was appointed as an Additional (Non-Executive) Director of the Company on 24 February, 2017. His tenure of office expires at the forthcoming Annual General Meeting and he is eligible for reappointment.

Sh. Deepak Garg was redesignated as Whole-Time Director & CFO of the Company w. e. f. 24 February, 2017.

Sh. Naveen Kumar Tayal was redesignated from Whole-Time Director & CFO to Non- Executive Director on 24 February, 2017.

Further,due to unavoidable reasons and circumstances, Sh. Naveen Kumar Tayal has resigned from the directorship of the Company on 3 March, 2017. The Board places on record its sincere appreciation for the services rendered by Sh. Naveen Kumar Tayal during his tenure of directorship.

A brief resume of these Directors, the nature of expertise in specific functional areas and names of Companies in which they hold

Directorship and/or Membership/Chairmanship of Committees of the Board, as stipulated under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed with the Notice calling 23 Annual General Meeting of the Company.

All the Independent Directors have given a declaration under sub-section (6) of Section 149 of the Companies Act, 2013 confirming their independence dated 31 March, 2017.

Sh. Bishan Bansal, Managing Director & CEO and Sh. Deepak Garg, Whole- Time Director & CFO are not receiving any commission/remuneration from the Company or any other Company of SRS Group.

NUMBER OF BOARD MEETINGS

During the year under review, Fourteen (14) Board Meetings were held .The meeting of Independent Directors was held on 30 March, 2017. The details of Board meetings and the attendance of Directors in such meetings are given in the Corporate Governance Report forming part of this Annual Report. The maximum gap between any two meetings was not more than one hundred and twenty days.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197 of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, there are no employees drawing remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided herein below:-

(i) the ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the year 2016-17:

S. No. Name of Directors Nature of Directorship Ratio
(i) Sh. Ankit Sachdeva* Managing Director & CEO 1:4
(ii) Sh. Bishan Bansal** Managing Director & CEO 2:1
(iii) Sh. Naveen Kumar Tayal^ Whole-Time Director & CFO 5:2
(iv) Sh. Deepak Garg^^ Whole-Time Director & CFO 1:3

*resigned on 20 June, 2016

**appointed on 20 June, 2016

^ Redesignated to Non- Executive Director on 24 February,2017 and resigned on 3 March, 2017

^^ Redesignated from Non- Executive Director to Whole-Time Director & CFO on 24 February, 2017

(ii) the percentage increase in remuneration of Managing Director & CEO, Whole-Time Director & CFO and Company Secretary in the financial year

S. No. Name of Directors/KMPs Category % increase
(i) Sh. Bishan Bansal* Managing Director & CEO -
(ii) Sh. Naveen Kumar Tayal^ Whole-Time Director &CFO -23%
(iii) Sh. Deepak Garg^^ Whole-Time Director &CFO -
(iv) Ms. Rakhi Mehta Company Secretary -

*appointed on 20 June, 2016

^ Redesignated to Non- Executive Director on 24 February, 2017 and resigned on 3 March, 2017

^^ Redesignated from Non- Executive Director to Whole-Time Director & CFO on 24 February, 2017

There was no increase in the remuneration of non-executive Directors by way of sitting fees for attending Board/ Committee meetings for the financial year 2016-17. No profit linked commission is paid to non-executive Independent Directors of the Company.

(iii) the percentage increase in the median remuneration of employees in the financial year: 7%

(iv) the number of permanent employees on the rolls of Company as on 31 March, 2017: 13

(v) the ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year:

S. No. Name of Employees Ratio
(i) Sangeeta Kapoor 2:4
(ii) Sangita Singh 2:3
(iii) Jitin Sadana 2:3

vi) It is affirmed that the remuneration is as per the Remuneration Policy of the Company.

PERFORMANCE EVALUATION MECHANISM

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board of Directors has carried out an annual evaluation of its own performance, the individual directors as well as evaluation of working of its Committees.

Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its

Committees and individual directors is given in the Corporate Governance Report.

REMUNERATION POLICY

Information regarding Remuneration Policy for Directors, KMP & other Employees is given in the Corporate Governance Report.

COMPOSITION OF COMMITTEES

The composition of Corporate Social Responsibility Committee as required under Section 135(2), the composition of Audit Committee as required under Section 177 (8) of the Companies Act, 2013 and the composition of Nomination & Remuneration Committee as required under Section 178 is given in the Corporate Governance Report.

Further, the Board has accepted all the recommendations of the Audit Committee during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Pursuant to section 186 (11) of the Companies Act, 2013 (the Act), the provisions of section 186(4) of the Act requiring disclosure in the financial statement of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

The details of investments made by the Company are given in Note No.2.9 to the Financial Statement.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis. There being no material related party transactions as defined under the Companies Act, 2013 read with Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 hence, there are no details to be disclosed in Form AOC-2 in that regard.

STATUS OF BANK LOANS

The Company has working capital limits aggregating Rs.110 Crores from Banks and has not been able to service Interest payable monthly due to an acute liquidity crisis resulting from mismatch of cash flows. Accordingly, Companys account was classified as Non-Performing Assets (NPA) by the respective lending Banks in terms of extant RBI Guidelines on Income Recognition and Asset Classification.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE AND BRANCHES

The Company has no subsidiary Companies/ joint ventures and associate Companies as at 31 March, 2017. Therefore, annexing of report in Form AOC-1 relating to salient features of associates companies is not applicable.

CREDIT RATING

SMERA Ratings Limited have reaffirmed the Bank Loan ratings, awarded the previous year, for Companys Credit Facilities at SMERA D for the financial year 2016-17 also.

FIXED DEPOSITS

Your Company has not accepted any deposits from the Public and as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet for the year ended 31 March, 2017.

AUDITORS

Statutory Auditors

M/s. SVP & Associates, Chartered Accountants, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting of the Company and have expressed their willingness for reappointment as statutory auditors in accordance with the Companies Act, 2013 and confirmed that their re-appointment, if made, will be within the prescribed limits under Section 141(3) of the Companies Act, 2013 and they are not disqualified for such re-appointment within the meaning of Section 141 of the said Act.

The members are requested to ratify the appointment of M/s. SVP & Associates, Chartered Accountants, as Statutory Auditors of the Company from the conclusion of this AGM until the conclusion of three consecutive AGMs as mentioned in the Notice.

Internal Auditors

M/s LAA & Associates are the Internal Auditors of the Company.

AUDITORS REPORT

Auditors of the Company have not expressed any qualification in their report and notes to accounts where ever given are self- explanatory.

The auditors have not reported any incident of fraud to the Audit Committee during the financial year 2016-17.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Savita Trehan, Practicing Company Secretary (FCS No.4374) has been appointed to conduct the Secretarial Audit of the Company.

The secretarial audit report for the F.Y 2016-17 in the prescribed form MR-3 given by Ms. Savita Trehan is enclosed as "Annexure-I" to this report. The report is self-explanatory and does not call for any further comments.

Ms. Savita Trehan was appointed as Secretarial Auditors of the Company till F.Y.2016-2017. She has been reappointed for another three years from F.Y.2017-18 to 2019-2020.

The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor.

RESERVE BANK OF INDIA (RBI) GUIDELINES

During the year under review, your Company has complied with all the applicable regulations, and directions of the Reserve Bank of India.

As per the FAQ section (Updated as on July 04, 2016) at the RBI Website it is quoted that "CICs in a group would not be considered for aggregating the assets of multiple NBFCs in a group under the circular. Instructions contained in the Core Investment Companies (Reserve Bank) Directions, 2011 dated January 5, 2011 shall be applicable to CICs in this regard."

Taking into consideration the above mentioned point of the FAQs, we are complying with the provisions of Non-Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2016.

EXTRACT OF ANNUAL RETURN

The extract of the annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration), 2014, as "Annexure- II" is attached to this report.

RISK MANAGEMENT

The Board of Directors is responsible for identifying, evaluating and managing all significant risks faced by the Company. The Board approved Risk Management Policy establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews the implementation of various aspects of the Risk Management policy through a duly constituted Risk Management Committee (RMC). The RMC assists the Board in its oversight of the Companys management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. In the opinion of the Board, none of the risks faced by the Company threaten its existence.

VIGIL MECHANISIM

The details of Vigil mechanism/Whistle Blower Policy are given in Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under "Corporate Social Responsibility" (CSR), the company has contributed funds for Promotion of Education and Environment cleanliness.

The Annual Report on CSR activities is annexed herewith as: Annexure III

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies(Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has a policy for the prevention of sexual harassment which has been implemented at unit level. It ensures prevention and deterrence towards the commissioning of acts of sexual harassment and communicates procedures for their resolution and settlement. A Committee has been constituted in accordance with the requirements under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which ensures implementation and compliance with the Law as well as the policy at unit level.

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

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

The nature of the activities of the Company does not give much scope for introducing measures for energy conservation and technology absorption and hence, there is nothing to report under the above head Foreign Exchange earning & outgo : NIL

MATERIAL CHANGES & COMMITMENTS

No material changes and commitments, affecting the financial position of the Company have occurred after the end of the financial year 2016-17 and till the date of this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors of the Company confirm the following: -

(a) that in the preparation of the annual accounts for the year ended 31 March 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(a) that the directors had selected such accounting policies and applied them consistently and made judgments 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 end of the financial year and of the profit and loss of the Company for that period;

(b) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(c) that the directors had prepared the annual accounts on a going concern basis;

(d) that the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(e) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE REPORT

Your Company is committed to maintain highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of Indias Corporate Governance Practice and has implemented all the prescribed stipulations. The Report on Corporate Governance as stipulated under Regulation 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms as part of Annual Report.

The report on Corporate Governance together with the certificate from Ms. Savita Trehan, Practicing Company Secretary [FCS No.4374], confirming the compliance of the Corporate Governance is attached to this report for information of the Members as "Annexure-IV".

MANAGEMENTS DISCUSSION & ANALYSIS

The Managements Discussion and Analysis Report of financial condition and results of operations of the Company is given as a separate statement is attached to this report for information of the Members.

ACKNOWLEDGMENT

The Directors of your Company wish to place on record their thanks & gratitude to the Government Authorities, Bankers, Stock Exchanges, RBI and other Financial Institutions and place on record their sincere appreciation for the efforts put in by the employees at all levels and cooperation extended by all those associated with the Company.

On Behalf of the Board
For SRS Finance Ltd.
(Bishan Bansal) (Deepak Garg)
Place: Faridabad Managing Director & CEO Whole-Time Director & CFO
Date: 12 July,2017 DIN 00013705 DIN 00237116