The Company has received the Order of Adjudication of Penalty under Section 454 of the Companies Act, 2013 read with Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 for violation of Section 118(10) and Section 134(5)(A)of the Companies Act, 2013 read with Rule 8 and 8A of the Companies (Accounts) Rules,2014, issued by the Adjudicating Officer in the second week of January 2024.The penalty imposed on the Company, its Managing Director and Chief Financial Officer for violation of Section 118(10)was Rs.35,000/- and for violation of Section 134(5)(A) was Rs. 12,00,000/- and the penalty has been levied for every year of violation.The Company, being aggrieved by the Order of Adjudication of Penalty passed by the Adjudicating Officer, filed a Memorandum of Appeal in Form ADJ dated January 25,2024 to the Regional Director, South Chennai having jurisdiction in the said matter and hearing of the same was held on February 27, 2024.The Regional Director considered the Appeal of the Company and reduced the penalty to 15% i.e., Rs.5,250/- on Section 118(10) and Rs.1,80,000/- on Section134(5)(A).Since the

Company is liable to pay the penalty imposed by the Regional Director within a period of ninety days from the date of the receipt of the copy of the order, the Company vide letter dated March 07, 2024, has requested for issue of detailed order in this regard for further course of action.

PERSONNEL

During the year under review, no employee was in receipt of remuneration in excess of limits laid down under the companies act other than below. There are no employees employed throughout the financial year were in receipt of remuneration which in aggregate was more that Rs.60,00,000/- per annum or Rs.500,000/- per month.

DUES TO SME’S

Management has determined that there were balances outstanding at the beginning of the year and transactions have been entered with micro, small and medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. During the current year the outstanding amount is 0.58 (Lakhs) based on the information available with the company as at March 31, 2024.

CASH AND CASH EQUIVALENTS (FOR PURPOSES OF CASH FL OW STATEMENT

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

LEASES

The Company’s lease assets consist of leases for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from the use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-to-use asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short term and low value leases, the Company recognizes the lease payments as an operating expense on a straightline basis over the term of the lease. The right-to-use asset is initially recognised at cost which comprises of the initial amount of lease liability adjusted for lease payments made or prior to commencement date plus any direct cost i.e. lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment loss if any. The Company applies the short-term lease recognition exemption to its short-term leases of Buildings (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). Lease payments on short-term leases are recognised as expense on a straight-line basis over the lease term.

CAPITAL MANAGEMENT

For the purpose of the Company’s Capital management, capital includes equity capital and all other reserves. The Company’s capital management objective is to maximize the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. The Company manages its capital structure and makes adjustment in the light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings less cash and short-term deposits.

FINANCIAL RISK MANAGEMENT

In course of its business, the Company is exposed to certain financial risks that could have significant influence on the Company’s business and operational / financial performance. These include market risk including interest rate risk and equity price risk), credit risk and liquidity risk. The Board of Directors reviews and approves risk management framework and policies for managing these risks and monitors suitable mitigating actions taken by the management to minimize potential adverse effects and achieve greater predictability to earnings. In line with the overall risk management framework and policies, the treasury function provides services to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. Borrowings, trade payables and other financial liabilities constitute the Company's primary financial liabilities and investment in unquoted equity shares, trade receivables, loans, cash and cash equivalents and other financial assets are the financial assets.

OTHER FINANCIAL ASSETS

Credit risk refers to the risk of default on the other financial assets to the Company that may result in financial loss. The maximum exposure from other financial assets amounting to Rs.536.54 lakhs as of March 31, 2024 (Rs. 523.83 lakhs as of March 31, 2023).

Other financial assets mainly constitute receivable from Corporate Borrowers. Credit risk is being managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to allow credit terms in the normal course of business. In the case of the Company, the credit period offered varies between 30 to 60 days and there have been no significant cases of impairment historically.

CASH AND CASH EQUIVALENTS AND DEPOSITS WITH BANKS

The credit risk on cash and bank balances is limited because the counterparties are banks with high credit ratings. Therefore, the risk of default is considered to be insignificant.

The financial instruments are categorised into three levels based on the inputs used to arrive at fair value measurements as described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Inputs based on unobservable market data.

PROVISION FOR EXPECTED CREDIT LOSSESFINANCIAL ASSETS FOR WHICH LOSS ALLOWANCE IS MEASURED USING LIFE TIME

EXPECTED CREDIT LOSSES

The Company's main customer base is Corporate Borrowers. Historically the risk of default has been negligible or nil. Further, management believes that the unimpaired amounts that are past due by more than 60 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk. Hence, no impairment loss has been recognized during the reporting periods in respect of trade receivables.

LIQUIDITY RISK

The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows. The Company invests its surplus funds in bank fixed deposit which carry minimal mark to market risks.

MATURITIES OF FINANCIAL LIABILITIES

The following are the contractual maturities (principal and interest in the case of loan) of nonderivative financial liabilities, based on contractual cash flows.

MARKET RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk for the entity comprises two types of risk: currency risk, interest rate risk and equity price risk. Financial instruments affected by market risk include borrowings and investment in unquoted equity shares. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

CURRENCY RISK

The Company is not exposed to any currency risk since it does not has any transactions in any foreign currency.

SENSITIVITY ANALYSIS

Since the company is not exposed to any currency risk, sensitivity analysis is not applicable.

FAIR VALUE SENSITIVITY ANALYSIS FOR FIXED-RATE INSTRUMENTS

The company’s fixed rate instruments are carried at amortized cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

EQUITY PRICE RISK

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. In the case of the Company, the sole investment in equity shares is unquoted and does not expose the Company to equity price risks, however there can be changes in the equity price based on valuations done at different reporting periods owing to the operations and general business environment in which the investee operates. In general, the investment is not held for trading purposes.

EQUITY PRICE SENSITIVITY ANALYSIS

A 1% change in prices of equity instruments held as at March 31, 2024 and March 31, 2023 would result in an increase / decrease of Rs.7.53 Lakhs and Rs.7.02 Lakhs in fair value of the equity instrument respectively.

BORROWINGS FROM BANKS & FINANCIAL INSTITUTIONS

The Company doesn’t have any borrowings from Banks/Financial Institutions and no corresponding report is required to be filed in relation to the same.

RECEIVABLES AND PAYABLES

The receivables and payables as stated in Current Assets and Current Liabilities and in the opinion of the management have a value and realization equal to the amount at which they are stated in the Balance Sheet and no provision for doubtful debts has been made by the Company for the year ending March 31, 2024.

RECEIVABLES UNDER FINANCING ACTIVITY AND PROVISIONING/WRITE-OFF OF ASSETS

The Company doesn’t have any Receivables under financing activity and the provisioning/write off of assets is NIL and hence no report is required to be filed in relation to the same.

BENAMI TRANSACTIONS/PROPERTY

No proceedings have been initiated during the year or are pending against the Company as at March 31, 2024 for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

REGISTRATION OF CHARGE CREATION ON PROPERTY

The company has no charge on its receivables and hence, there are no related registration compliances involved.

UNDISCLOSED INCOME

The company doesn’t have any current or previous transactions that have not been recorded in the books of accounts and has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

REVALUATION OF PLANT, PROPERTY AND EQUIPMENT

There was no revaluation of assets during the year 2023-24.

WILFUL DEFAULTER

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

TITLE DEEDS OF IMMOVABLE PROPERTY NOT HELD IN THE NAME OF THE COMPANY

There are no Title Deeds of immovable property held in the name of the Company.

TRANSACTIONS WITH STRUCK OFF COMPANIES

The Company doesn’t have any transactions with struck off companies.

SCHEME OF ARRANGEMENT

The Company doesn’t have any scheme of arrangements to disclose during the year 2023-24. CRYPTO CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

GENERAL

1. The figures for the previous year have been regrouped / reclassified / rearranged where ever necessary with the conformity with the current year figures for facilitating proper comparisons.

2. There are no unexecuted capital contracts which are outstanding or remaining to be performed for the current year.

3. The figures have been rounded off and mentioned in Rs. In lakhs.