stellar capital services ltd Directors report

HIGHLIGHTS OF PERFORMANCE

The above figures are extracted from the financial statements prepared in accordance with the Indian Accounting Standards (Ind AS), in compliance with the Companies (Account) Rules, 2014 and accounting standards notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) as amended and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

During the year under review, Income for the year is decreased from Rs. 46,733,890/-in 2021 to Rs. 33,960,400/-in 2022. Profit before tax decreased from Rs. 10,326,560/-in the previous year to Rs. 4,026,180/-in current year. The net profit also decreased from Rs. 7,987,900/-in the previous year 2021 to Rs. 3,104,620/in the current year.

OPERATIONS

During the year under review, the total revenue was Rs. 33,960,400 /- as against Rs. 46,733,890/- during the corresponding period last year, a decline of 37.6% (approx.) recorded this year. Due to the continuing effect of outbreak of the COVID-19, the entire world economies are still affected. The operation gradually started over the period of time as per the guidelines of Central, State Government and Local Authorities. As an organization, your company has been strictly adhering to social distancing norms, limitation on percentage of personnel engagenement in offices and other lockdown announcements and directons issued by administration.

DIVIDEND

To maintain the liquidity of funds, the Board of Directors has decided not to declare any dividend for this financial year 2021-22. The Board assures you to present a much strong financial statements in coming years.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable on the Company.

SHARE CAPITAL

The Paid up Share Capital as on 31st March, 2022 was Rs. 249,615,000. During the year under review the company has not issued any shares, debentures or any other convertible instruments.

BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

BONUS SHARES

No Bonus Shares were issued during the year under review.

EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

ISSUE OF SHARES THROUGH PREFERENTIAL ALLOTMENT

The Company has not issued any equity shares by way of preferential allotment during the year under review.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposit during the year under review falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

REPAYMENT OF DEPOSIT/ PAYMENT OF ANY INTEREST

The Company has not made any default in repayment of Deposit or payment of any Interest.

TRANSFER TO GENERAL RESERVES

The Company has transferred an amount of Rs. 6,20,920/- to Special Reserve maintained under Section 45-IC of the Reserve Bank of India Act, 1934.The Company has not transferred any amount to the General Reserve for the F.Y ended March 31, 2022.

CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of the business during the financial year.

MATERIAL CHANGES AND COMMITMENTS

The ongoing COVID-19 pandemic has increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31st March, 2022. The Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31st March, 2022 about future events that the Management believe are reasonable in the circumstances. There is a considerable degree of judgment involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecasted since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these financial statements.

Other than the above-mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2021-22till the date of this Report, which would affect the financial position of your Company.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3) (a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2022 in Form No. MGT-7 is available on the Companys website and can be accessed at the web-link: https://www.stellarcapital.in/investors-info/

DETAIL OF SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY DURING THE YEAR

The Company has no subsidiary, joint venture or associated company therefore disclosures in this regards in Form AOC -1 are not provided in this report.

FRAUD REPORTING

During the Financial Year 2021-22, neither the Statutory Auditors nor the Secretarial Auditors have reported any fraud in their respective Audit Reports.

PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANY

The company has no subsidiary; joint venture or associated company so there is no requirement of description of performance in this regard.

STATUTORY AUDITORS

As per the provisions of Section 139 of the Companies Act, 2013, Goyal Nagpal & Co., Chartered Accountants (Firm Registration No.: 100515W), was recommended as statutory auditor of the company by the Board of Directors of the Company, at its meeting held on May 18, 2022. Subsequently members of the Company in Extra-Ordinary General Meeting held on 16.08.2022 appointed M/s Goyal Nagpal & Co.,Chartered Accountants (Firm Registration No.: 100515W), as the Statutory Auditors of the Company till the conclusion of the ensuing Annual General Meeting on such remuneration as may be decided by the Board of Directors of the Company.

Further, RBI Circular: RBI/2021- 22 /25 Ref. No. DoS. CD.ARG/SEC.01/ 08.91.001/2021-22 dated April 27, 2021 (“RBI Guidelines”) provides that Audit Firms completing tenure of three financial years in the NBFC were not eligible to continue to hold office as Statutory Auditors of the NBFC. Accordingly, M/s Goyal Nagpal & Co. (Firm Registration No.: 100515W) are appointed as Statutory Auditors of the Company to hold office from conclusion of 28th Annual General Meeting till the conclusion of 30th Annual General Meeting of the Company to conduct the audit of accounts of the Company for the financial year ending March 31, 2023 and March 31, 2024.

The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report to the members of the Company for the financial year under review does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors were present in the last AGM.

SECRETARIAL AUDITOR

M/s Kundan Kumar Mishra &Associates, Company Secretaries, was re-appointed as a secretarial auditor to conduct the secretarial audit of the Company for the F.Y 2021-22, as required under Section 204 of the Companies Act, 2013 and rules there under. The Secretarial Audit Report for F.Y 2021-22 forms a part of this Report as “Annexure-II”. The aforesaid Report of the Company for the financial year under review does not contain any qualification, reservation, adverse remark or disclaimer.

INTERNAL AUDITOR

M/s MST and Company, Chartered Accountant was re-appointed as an internal auditor of the Company. The Internal Audit Report for F.Y 2021-22 has been submitted to Audit Committee. The aforesaid Report of the Company for the financial year under review does not contain any qualification, reservation, adverse remark or disclaimer.

COST AUDIT

Provisions under sub-section (1) of section 148 of the Companies Act, 2013 related to Cost Audit is not applicable to the Company and accordingly such accounts and records are not required to be maintained.

COURT/TRIBUNAL ORDERS

There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

DISCLOSURE OF APPALICATION MADE UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year, the Company has not filed any petition before the National Company Law Tribunal or there are no pending proceedings against the Company under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use for disposition of its assets. All the transactions are probably authorized, recorded and reported to the Management. The Company is following all applicable accounting standards for properly maintaining the books of accounts and reporting financial statements. The internal Auditor of the company checks and verifies internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of business.

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

Information required to be given pursuant to section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 and forming part of Boards Report for the year ended March 31, 2022 are given as below:

Conservation of Energy and Technology Absorption

Since the Company does not own any manufacturing activity, the Energy Conservation and Technology Absorption particulars as mentioned in the Companies (Accounts) Rules, 2014, are not applicable.

Foreign Exchange Earning and Outgo: -

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve Bank of India, from time to time being NBFC Company. During the year under review, the Board in the meeting held on 18.01.2022 decided to apply for volutanry surrender of the Non Banking Financial Company (NBFC) registration certificate no. 14.02359 dated March 23, 2001 to Reserve Bank of India (RBI) to carry a Non-NBFC business. The application is still in process with Reserve Bank of India (RBI) and company being NBFC, follows the applicable Rules and regulations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Provisions related CSR under Section 135 of the Companies Act, 2013 are not applicable to the Company.

BOARD MEETINGS & ANNUAL GENERAL MEETING

During the financial year 2021-22, 07 (Seven) Board Meetings were held on 30^th June 2021, 26^th July 2021, 04^th September 2021, 13^th November 2021, 18^th January 2021, 02^nd February 2022, 10^th March, 2022. The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The 27th Annual General Meeting (AGM) of the Company was held on 30.09.2021 at the registered office of the Company through Video Conferencing or other Audio Visual Means.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met once during the year under review, on 31^st March, 2022. The Meeting was conducted in an informal manner without the presence of the Whole-time Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and Key Managerial Personnel (“KMP”) and their remuneration including criteria for determining qualifications, positive attributes, independence of Directors and other matter as provided in section 178. The Salient features of the policy are :-

To pay equitable remuneration to directors, KMPs and employees of the Company and to harmonize the aspirations of human resources consistent with the goals of the Company. To guide the Board in relation to appointment and removal of Directors, Key managerial Personnel and Senior Management. To lay down criteria for identifying persons who are qualified to be appointed in senior management of the Company. Such policy is available at the website of the company at www.stellarcapital.in under the link of http://stellarcapital.in/wp-content/uploads/2018/07/NRC-POLICY.pdf

DECLARATION BY DIRECTORS

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/ 03.10.119/2016-17 dated 1^st September, 2016 and that they are not disqualified from being appointed/continuing as Directors in terms of section 164(2) of the Companies Act, 2013.

DECLARATION BY INDEPENDENT DIRECTORS

In terms of Section 149 of the Act and the SEBI Listing Regulations, Mrs. Neha Gupta and Mr. Ravi Bhushan Kumar are the Independent Directors of the Company. The Company has received declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of SEBI (LODR) and subsequently the same was placed at the Board Meeting. The Board has confirmed the statement of directors also.

Independent director has complied with the Code for independent directors as specified in Schedule IV of the Companies Act 2013. In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have their names included in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs and qualified the proficiency test.

BOARD EVALUATION

The Companies Act, 2013 states that a formal annual evaluation needs to be made by the board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Directors being evaluated.

The structured evaluation process contained various aspects of the functioning of the Board and its committees, number of committees and their roles, frequency of meetings, level of participation, independence of judgment, performance of duties and obligations and implementation of good Corporate Governance practices.In a separate meeting of Independent Directors,performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated,taking into account the views of the Executive Director and NEDs.

The evaluation of all the Directors and the board as a whole was conducted based on the criteria and frame work adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee.

INTERNAL COMPLAINTS COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT

Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee (ICC) where any grievances of sexual harassment at workplace can be reported. The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace, free from harassment/ discrimination and every employee is treated with dignity and respect.

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 2021-22, pursuant to the POSH Act and Rules framed thereunder: a) Number of complaint(s) of Sexual Harassment received during the year Nil b) Number of complaint(s) disposed off during the year Nil c) Number of cases pending for more than 90 days Nil d) Nature of action taken by the employer or District Officer Not Applicable

DETAILS OF DIRECTORS OR KMP APPOINTED OR HAVE RESIGNED DURING THE YEAR.

DIRECTOR

In accordance with the provisions of Section 152 of the Act, Mr. Sumit Karmakar, Director retires by rotation at the forthcoming Annual General Meeting and, being eligible offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the forthcoming Annual General Meeting.

KEY MANAGERIAL PERSONNEL

During the period under review Ms. Anjali Singh has resigned from the position of Company Secretary and Compliance Officer of the Company w.e.f. 15th October, 2021 and Mr. Deepanshu Mittal, has appointed (having Membership No.: A66663), as Company Secretary and Compliance Officer of the Company with effect from 02nd February, 2022, further he resigned from the position of Company Secretary and Compliance Officer of the company w.e.f. 08th day of February, 2022.

COMMITTEES OF THE BOARD

Currently, the Board has 3 Committees; the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. The Composition of committees as per applicable provisions of the act and rules, are as follows:

Audit Committee

The “Audit Committee” of the Company is constituted in line with the provisions of Section 177 of the Companies Act, 2013 (‘the Act) and Comprises of following members: Mr. Ravi Bhushan Kumar Mrs. Neha Gupta Mr. Pranay Aneja During the financial year 2021-22, 04 (four) Audit Committee Meetings were held on 30^th June 2021, 04^th September 2021, 13^th November 2021 and 10^th March 2022.

Nomination and Remuneration Committee

The “Nomination Remuneration and Committee” has been constituted by the Board as per the requirements of the provisions of Section 178 (1) of the Companies Act, 2013 and comprise of following members : Mrs. Neha Gupta Mr. Sumit Karnmakar Mr. Ravi Bhushan Kumar During the financial year 2021-22, 04 (Four) Nomination & Remuneration Committee Meetings were held on 30^th June, 2021 26^th July, 2021, 04^th September, 2021 and 02^nd February, 2021.

Stakeholders Relationship Committee

The “Stakeholders Relationship Committee” is constituted in line withthe provisions of Section 178 (5) of the Companies Act, 2013 and comprise of following members : Mr. Ravi Bhushan Kumar Mrs. Neha Gupta

Page 25 of 75

Mr. Pranay Aneja

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES

In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the company has adopted a vigil mechanism policy. 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 irregularities within the Company. This policy is also posted on the website of the company i.e. www.stellarcapital.in under the link of http://stellarcapital.in/wp-content/uploads/2018/05/VIGIL-MECHANISM.pdf

PARTICULARS OF LOANS, GUARANTEE 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 Statements of the full particulars of the loans made and guaranteesgiven 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 utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186 (4) of the Act, the details of investments made by the Company are disclosed in the Financial Statements.

RELATED PARTY TRANSACTIONS

All the related party transactions entered during the financial year were on arms length basis and also in the ordinary course of the business. There were no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of Related Party Transactions are disclosed and forming part of the Annual Financial Statements.

COMPLIANCE OF SECRETARIAL STANDARDS

During the year Company has complied all the required compliances of Secretarial Standards -1 & 2 as prescribed by the Institute of Company Secretaries of India.

RISK MANAGEMENT POLICY

Managing of Risk is an Integral part of Companys strategy. Company has already implemented Risk Management Policy and the Board of Directors has prepared a comprehensive framework of risk management, for assessment of risks and to determine the responses to these risks so as to minimize their adverse impact on the organization. Such is available at the website of the company at http://stellarcapital.in/wp-content/uploads/2018/05/RISK-MANAGEMENT-POLICY.pdf

MANAGEMENT DISCUSSION ANALYSIS REPORT (MDAR):

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section which forms part of the Annual Report.

PRUDENTIAL NORMS AND DIRECTIONS OF RBI FOR NBFCS

Your company has complied with all the prudential norms prescribed by the Reserve Bank of India and has filed the required returns.

PARTICULARS OF EMPLOYEES

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: a) in the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the directors have 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 2021-22 and of the profit of the company for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis;

e) the directors had laid down proper internal financial controls and such internal financial controls are adequate and were operating effectively;

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

STOCK EXCHANGE LISTING

The Equity Shares of the Company are listed at the BSE Limited on SME Platform. The Company has already paid listing fees for the financial Year 2022-23 to the BSE.

ACKNOWLEDGEMENT

The Board of Directors gratefully acknowledge the continued co-operation, trust and support of the shareholders and would like to place on record its appreciation for the dedicated services rendered by the Employees at all levels. The Directors further express their gratitude to the Bankers, Customers and other associates for co-operation and confidence reposed by them in the Company.

ANNEXURE-II