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Sainik Finance & Industries Ltd.

BSE: 530265 Sector: Financials
NSE: N.A. ISIN Code: INE584B01013
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OPEN 28.35
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VOLUME 240
52-Week high 52.40
52-Week low 24.50
P/E
Mkt Cap.(Rs cr) 31
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sainik Finance & Industries Ltd. (SAINIKFINANCE) - Director Report

Company director report

The Member(s)

Your directors have immense pleasure in presenting 30thAnnual Report of Sainik Finance & Industries Limited (‘the Company') alongwith the Audited Standalone Financial Statements and the Auditor's Report thereon forthe financial year ended 31st March 2022.

1. FINANCIAL RESULTS

(Amount in Rupees Lakhs)

Particulars For the financial year 2021-22 F or the financial year 2020-21
Revenue from operations 1562.02 2078.63
Other income 18.30 403.89
Total Revenue 1580.32 2482.52
Profit before finance costs depreciation and tax 845.32 1527.44
Finance Costs 1767.30 1683.94
Profit before depreciation and tax (921.98) (156.50)
Depreciation for the financial year - 0.34
Profit /(Loss) before tax (921.98) (156.84)
Direct Taxes ( current and deferred taxes) 109.47 61.32
Profit / (Loss) after Tax (812.51) (95.52)
Other Comprehensive Income for the year (net of tax) (2.28) 1.97
Total Comprehensive income (Loss) for the year (814.79) (93.55)
Transfer to Reserve Fund - -

2. COVID-19- A GLOBAL "PANDEMIC"

Financial year 2021-22 ("year under review") was once againdominated by the COVID-19 pandemic as new waves of infection swept across countries. InIndia the second wave (called ‘Delta') proved far more deadly than the firstthat struck in 2020. The advent of the highly transmissible variant ‘Omicron' inearly January 2022 (the third wave) spread much dread across the world. Fortunately whilehighly transmissible Omicron was not as clinically deadly as Delta. So while many gotinfected almost all got well again within a week or so without hospitalisation andmortality.

The impact of the second and third wave of the pandemic on theperformance of the Company. The extent to which the COVID-19 pandemic will impact theCompany's impairment loss / allowance on assets and future results will depend onfuture developments which are highly uncertain and the Company will continue to closelymonitor the same. The appropriate measures were taken by the Company to mitigate the riskof COVID-19 to its business operations.

3. APPLICABILITY OF INDIAN ACCOUNTING STANDARDS (‘IND AS')AND PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared and presented in accordance withIndian Accounting Standards (‘Ind AS') as per the Companies (Indian AccountingStandards) Rules 2015 as amended from time to time and notified under section 133 of theCompanies Act 2013 (the Act) along with guidelines issued by the Securities and ExchangeBoard of India (SEBI) and the guidelines issued by the Reserve Bank of India(‘RBI') as applicable to a Non-Banking Finance Company (‘NBFC'). Thefinancial statements have been prepared on a going concern basis. The Company uses accrualbasis of accounting except in case of significant uncertainties. The accounting policieshave been consistently applied by the Company and are consistent with those used in theprevious year. The financial statements are presented in Indian rupees.

For all periods up to and including the year ended 31 March 2019 theCompany had prepared its financial statements in accordance with accounting standardsnotified under Section 133 of the Companies Act 2013 read together with paragraph 7 ofthe Companies (Accounts) Rules 2014 and the Companies (Accounting Standards) AmendmentRules 2016 and the NBFC Master Directions The financial statements for the year ended 31March 2020 was the first which has been prepared in accordance with Ind AS and the Companyhas applied Ind AS 101. The Financial Statements of the Company for the financial yearended 31st March 2022 has been prepared in accordance with the provisions ofInd AS.

4. TRANSFERS TO RESERVES AND PROVISIONS

Except as mentioned below no amount was proposed to transfer to anyreserve by the Company during the year under review.

During the year under review the Company did not require to transferany amount to Special Reserve Funds in order to comply with the provisions of Section 45IAread with section 45IC of the Reserve Bank of India Act 1934 as the Company incurred netlosses of Rs.814.79 lakhs during the year under review and also a net losses of Rs.93.55lakhs during the previous year. As on 31st March 2022 the Company has madethe provision of Rs.264.38 Lakhs for Sub Standard Assets and Rs.1203.05 Lakhs for StandardAssets in order to comply with the guidelines of the Reserve Bank of India.

5. OPERATIONS OF THE COMPANY

During the year under review the Company was engaged in carrying onthe business as NonBanking Financial Company without accepting public deposits for whichthe Certificate of Registration has been obtained from the Department of Non- BankingSupervision Reserve Bank of India New Delhi.

6. PERFORMANCE REVIEW

During the year under review the Company's total income hasdecreased to Rs.1580.32 Lakhs as compared to Rs.2482.52 Lakhs in the previous year. TheCompany incurred losses before tax of Rs.921.98 Lakhs as compared to the losses ofRs.156.84 Lakhs in the previous year.

7. NON-PERFORMING ASSETS OF THE COMPANY

Your Company is in adherence to the provisions of Indian AccountingStandards (Ind AS) with respect to computation of Stage-3 Assets Non- performing assets(NPA). Your Company's assets have been classified based on expected performance.Exposure at Default (EAD) is the total amount outstanding including accrued interest as onthe reporting date. Further in compliance with Ind AS accounting framework Interestearned on NPA's is recognized net of expected losses if the present realisable valueof the security is greater than the outstanding loan dues.

During the year under review using a pro-active collection andrecovery management system supported by analytical decision making your Company was ableto contain its gross NPAs at Rs.264.38 Lakhs as compared to Rs.272.38 Lakhs in previousfinancial year. Your Company reviews the delinquency and loan portfolio on regular basis.Further the information on the Business overview and outlook and state of affairs of yourCompany have been discussed in detail in the MDA which forms part of this Annual Report.

8. SHARE CAPITAL OF THE COMPANY

The Authorised share capital of the Company is Rs.1100.00 Lakhs dividedinto 11000000 Equity shares of Rs.10/- each. Issued Subscribed and Paid up Share Capitalof the Company is Rs.1088.00 Lakhs divided into 10880000 Equity Shares of Rs.10/- eachfully paid up.

Out of the above 9453770 Equity Shares being 86.89% of theCompany's paid up equity shares capital are in dematerialized form as on 31stMarch 2022 and balance 1426230 Equity Shares being 13.11% of the Company's paid upequity shares capital are in physical form. The Company request all the shareholders whohold equity shares in physical form to get their equity shares dematerialised with theirdepository at earliest. Our Registrar & Transfer Agent is M/s Indus Portfolio PrivateLimited having their communication office at G-65 Bali Nagar New Delhi -110015.

9. PAYMENT OF DIVIDEND

Your directors do not recommend any dividend for payment to theshareholders / members of the Company for the financial year ended on 31stMarch 2022.

10. DIRECTORS & KMP OF THE COMPANY

As on date the Board of the Company comprises of Seven Directorsconsisting of Four Independent Directors (including one Women Director) threeNon-Executive Non Independent Directors as on date who bring in a wide range of skills andexperience to the Board. The Board of Directors of the Company are:

Name of Director Designation DIN
Sh. Rudra Sen Sindhu Non- Executive Non-Independent Director 00006999
Sh. Kuldeep Singh Solanki Non- Executive Non-Independent Director 00009212
Sh. Sarvesh Sindhu Non- Executive Non-Independent Director 06545787
Sh. Ramesh Shah Non- Executive Independent Director 00029864
Sh. Samai Singh Non- Executive Independent Director 00235036
Smt. Nishi Sabharwal Non- Executive Independent Director 06963293
Sh. Bharat Sinh Non- Executive Independent Director 00347364

In term of the Section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Sh. Sarvesh Sindhu (DIN-06545787) Non- Executive director ofthe Company retires by rotation at ensuing Annual General Meeting being eligible offershimself for re-appointment. Your directors recommend his re-appointment as director of theCompany.

Mr. Samai Singh Non-Executive Independent Director was reappointed fora second tenure of 5 years by way of Special resolution passed by shareholders at theirAnnual General Meeting held on 28th September 2017. The tenure of Sh. SamaiSingh as Independent Director of the Company will expire on 27th September2022.

Pursuant to the provision of Section 149(11) no independent directorshall hold office for more than two consecutive terms but such independent director shallbe eligible for appointment after the expiration of three years of ceasing to become anindependent director: Provided that an independent director shall not during the saidperiod of three years be appointed in or be associated with the Company in any othercapacity either directly or indirectly. Consequently Sh. Samai Singh is not eligible forreappointment as an Independent Director of the Company.

Subsequent to financial year under review on the recommendation ofNomination and Remuneration Company the Board of Directors in their meeting held on 12thAugust 2022 appointed Mr. Bharat Sinh as additional Director of the Company in capacityof Non-executive Independent Director with immediate effect. The Board of Directors of theCompany also recommend / propose to regularize the appointment of Sh. Bharat Sinh asIndependent Director of the Company in ensuing Annual General Meeting of the Members for afirst consecutive five years with effect from 12th August 2022 to 11thAugust 2027 subject to the approval of Members of the Company at ensuing Annual GeneralMeeting of the Company held on 30th September 2022. Your Board members believesthat induction of Mr. Bharat Sinh as Independent Director on the Board will support inbroadening the overall expertise of the Board and will bring wide experience particularlyin the areas of corporate governance and various laws. The Board also opinioned that Sh.Bharat Sinh Independent Director has integrity expertise and experience. He hasproficiency of the independent director as ascertained from the online proficiencyself-assessment test conducted by the Institute notified under sub-section of section 150of the Act.

As required under regulation 36(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the information on the particulars of theDirectors proposed for appointment/re- appointment has been given in the Notice of theAnnual General Meeting of the Company.

Mr. Renu Company Secretary and Compliance Officer designated as KMPtendered her resignation from the Company with effect from 11th March 2022.Mr. Nikhil Sukhija a qualified member of Institute of Company Secretaries of India hasbeen appointed as Company Secretary and Compliance officer of the Company with effect from3rd June 2022 and he has also been designed as KMP of the Company with effectfrom 29th day of July 2022.

Pursuant to the provisions of section 203 of the Act as on datefollowing are the key managerial personnel of the Company:

a) Mr. Akash Shrivastava - Chief Executive Officer
b) Mr. Jagdish Chandra - Chief Financial Officer and
c) Mr. Nikhil Sukhija - Company Secretary.

11. Declaration by Independent Directors

The independent directors have submitted a declaration of independencestating that they meet the criteria of independence provided under section 149(6) of theAct read with regulation 16 of the SEBI Listing Regulations as amended. The independentdirectors have also confirmed compliance with the provisions of rule 6 of Companies(Appointment and Qualifications of Directors) Rules 2014 as amended relating toinclusion of their name in the databank of independent directors.

The Board took on record the declaration and confirmation submitted bythe independent directors regarding them meeting the prescribed criteria of independenceafter undertaking due assessment of the veracity of the same in terms of the requirementsof regulation 25 of the SEBI Listing Regulations.

During the year under review non-executive directors of the Companyhad no pecuniary relationship or transactions with the Company other than the sittingfees commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Company.

12. COMPLIANCE WITH CODE OF CONDUCT

All Board members and senior management personnel have affirmedcompliance with the Company's Code of Conduct during the year ended review. Adeclaration to this effect signed by the Chief Executive Officer is included in thisAnnual Report.

13. PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS ITS COMMITTEE ANDINDIVIDUAL DIRECTORS.

In compliance with the requirement of the Companies Act 2013 and theSEBI Listing Regulations as amended from time to time the Board of Directors on annualbasis evaluates the functioning of the Board its Committees Chairman and of theIndividual Directors. The Board as a whole and the committee thereof were being evaluatedon various parameters including but not limited to their compositions experiencequalifications diversity roles and responsibility of each and every directors towardsStakeholders strategic participation governance compliances culture and dynamics andquality of relationship between Board Members and the Management.

The Individual Directors including the Chairman and IndependentDirectors are also evaluated on the basis of their qualifications experience knowledgeand their competency and while evaluating the performance of each and every Directorindividually the Board also give utmost check to their ability to work as teamcommitment towards the functions assigned contribution and availability at Board Meetingand other business matters etc.

The above criteria are broadly based on the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on 5th January2017 & by ICSI.

The review concluded by affirming that the Board as a whole theCommittee(s) Chairman and the individual Director continued to display a commitment togood governance by ensuring a constant improvement of processes and procedures andcontributed their best in the overall growth of the organization.

14. REMUNERATION POLICY

The Board on the recommendation of the Nomination and RemunerationCommittee adopted a "Policy on Nominations and Remuneration for Directors KeyManagerial Executives Senior Management and other Employees" which inter-alialays down the criteria for identifying the persons who are qualified to be appointed asDirectors and/or Senior Management Personnel of the Company along with the criteria fordetermination of remuneration of Directors KMPs Senior Management and other employeesand their evaluation and includes other matters as prescribed under the provisions ofSection 178 of the Act and SEBI Listing Regulations. The "Policy on Nominations andRemuneration for Directors Key Managerial Executives Senior Management and Other isavailable on the Company's website www.sainikfinance.com. The summary of Nominationand Remuneration Policy is stated in the Corporate Governance Report. No Remuneration hasbeen paid to any Directors of the Company during the financial year 2021-22 except sittingfees.

Disclosure under section 197 (12) of the Companies Act 2013 read withrules made thereunder

Disclosures with respect to the remuneration of Directors and employeesas required under Section 197 of the Act and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (Rules) is given below:

The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; Name of the Director Ratio to the median
N.A. N.A.
The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Name of Director/ CS/ CFO % Increase
Jagdish Chandra CFO 10
Akash Shrivastava CEO 10
Renu Company Secretary* 25
The percentage increase in the median remuneration of employees in the financial year; NIL
The number of permanent employees on the rolls of Company at end of the financial year under review; 6
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; NIL
Affirmation that the remuneration is as per the remuneration policy of the company. Yes; the remuneration is as per the remuneration policy of the company.

*Mrs. Renu resigned from the position of Company Secretary w.e.f. 11thMarch 2022.

None of employees of the Company has received remuneration ofRs.10200000 per annum and Rs.850000 per month during the financial under review.Details of employees remuneration as required under provisions of Section 197 of theCompanies Act 2013 and Rule 5(2) and 5(3) of Rules are available at the registered officeof the Company during working hours 21 days before the Annual General Meeting and shall bemade available to any shareholders on their request in written.

15. BOARD MEETINGS HELD DURING THE YEAR UNDER REVIEW

During the year under review Six (6) Board Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between two board meetings was within the period prescribed under the Companies Act2013.

Additionally a meeting of the Independent Directors of the Company washeld on 15 th March 2022 with the participation of all Independent Directorsof the Company at the meeting.

16. DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors acknowledges the responsibility for ensuringcompliance with the provisions of section 134(3)(c) read with section 134(5) of theCompanies Act 2013 in the preparation of the Financial Statement for the financial yearended on 31st March 2022 and state:

i) That in the preparation of Annual Accounts for the financial yearended as at 31st March 2022 the applicable Accounting Standards have beenfollowed along with proper explanation relating to the material departures.

ii) That the Directors have selected such Accounting Policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at thefinancial year ended as at 31st March 2022 and of the profit and loss of the Company forthe financial year ended on 31st March 2022.

iii) That the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the Assets of the Company and for preventing and detecting fraud or otherirregularities.

iv) That the Directors have prepared the Annual Accounts on a"Going Concern basis".

v) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

vi) There is a proper system to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory and secretarial auditors and external consultants including audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe board is of the opinion that the Company's internal financial controls wereadequate and effective during financial year 2021-22

17. PUBLIC DEPOSITS

The Company has not invited or accepted any public deposits within themeaning of Section 73 of the Companies Act 2013 and the rules made thereunder and section45-I(bb) of the Reserve Bank of India Act 1934 during the year under review. The Companydoes not hold any public deposit as on date and will not accept the same in future withoutthe prior approval of Reserve Bank of India in writing.

18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company being an NBFC registered with the RBI and engaged in thebusiness of giving loans in ordinary course of its business is exempt from complying withthe provisions of section 186 of the Act with respect to loans and guarantees.Accordingly the disclosures of the loans given as required under the aforesaid sectionhave not been made in this Report.

19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate system of internal control gearedtowards achieving efficiency in its operations safeguarding assets optimum utilizationof resources and compliance with statutory regulations. The Company has an InternalControl System commensurate with the size scale and complexity of its operations.Testing of such Internal Control measures and systems forms a part of Internal Auditfunction. The Internal Auditors of the Company conduct audits of various departments basedon an annual audit plan covering key areas of operations. Internal Audit reviews andevaluates the adequacy and effectiveness of internal controls ensuring adherence tooperating guidelines and systems and recommending improvements for strengthening them. Tomaintain its objectivity and independence the Internal Audit function reports to theChairman of the Audit Committee of the Board. The Audit Committee of the Board ofDirectors reviews the adequacy of internal controls. This has improved the management ofthe affairs of the Company and strengthened transparency and accountability. TheManagement ensures adherence to all internal control policies and procedures as well ascompliance with regulatory guidelines. No significant audit observations andrecommendations have been received from the Internal Auditors of the Company.

20. AUDITORS OF THE COMPANY

a) Statutory Auditors:

Pursuant to the provisions section 139 142 and other applicableprovisions of the Companies Act 2013 and the Rules made thereunder and pursuant to therecommendations of the audit committee of the Board of Directors M/s Nagar Goel &Chawla Chartered Accountants New Delhi (bearing ICAI Registration No.009933N) StatutoryAuditors of the Company were appointed by the Members of the Company in their 25thAnnual General Meeting of the Company held on 28th September 2017 to holdoffice as Statutory Auditors from the conclusion of 25th Annual General Meetingtill the conclusion of the 30th Annual General Meeting of the Company to beheld for the financial year ending on 31st March 2022. However M/s Nagar Goel& Chawla Chartered Accountants has resigned from the Company due to dissolution oftheir firm and in order to fill up the casual vacancy the Board with the approval ofshareholders in the Extra Ordinary General Meeting of the Company held on Wednesday 25 thday of May 2022 appointed M/s VPGS & Co. Chartered Accountants (Firm Reg.No.507971C) New Delhi as Statutory Auditors of the Company to conduct statutory audit ofaccounts of the Company for the financial year ended 31st March 2022. Theyshall hold office until the conclusion of the ensuing Annual General Meeting of theCompany for the financial year- 2021-22. The Company approached M/s. Kumra Bhatia &Co. Chartered Accountants New Delhi (having Firm Regn. No.002848N) to appoint them asStatutory of Auditors of the Company in place of retiring Statutory Auditors- M/s VPGS& Co. Chartered Accountants New Delhi whose office is liable to retire/ expire onensuing Annual general meeting in term of section 139(8) of the Act.

After evaluating and considering various factors such as industryexperience competency of the audit team efficiency in conduct of audit independenceetc. the Board of Directors of the Company (‘Board') has based on therecommendation of the Audit Committee proposed the reappointment of M/s. Kumra Bhatia& Co. Chartered Accountants New Delhi (having Firm Regn. No.002848N) as the StatutoryAuditors of the Company for the first consecutive term of five years from the conclusionof 30th AGM till the conclusion of 35th AGM of the Company to beheld for the financial year ended 31-03-2027 at a remuneration as may be mutually agreedbetween the Board and the Statutory Auditors.

M/s. Kumra Bhatia & Co. Chartered Accountants New Delhi (havingFirm Regn.No.002848N) consented to their appointment as the Statutory Auditors and haveconfirmed that the appointment if made would be within the limits specified underSection 141(3)(g) of the Act and that they are not disqualified to be appointed as theStatutory Auditors in terms of the provisions of Section 139 and 141 of the Act and theRules framed thereunder.

The Board of directors of the Company recommend to the shareholders forgranting their approval for appointment of M/s. Kumra Bhatia & Co. CharteredAccountants New Delhi as the Statutory Auditors of the Company for the first consecutiveterm of five years from the conclusion of 30th AGM till the conclusion of 35thAGM of the Company to be held for the financial year ended 31-032027.

Besides the audit services the Company would also obtaincertifications from the Statutory Auditors under various statutory regulations andcertifications required by clients banks statutory authorities audit related servicesand other permissible non-audit services as required from time to time for which theywill be remunerated separately on mutually agreed terms as approved by the Board inconsultation with the Audit Committee. The Board in consultation with the AuditCommittee may alter and vary the terms and conditions of re-appointment includingremuneration in such manner and to such extent as may be mutually agreed with theStatutory Auditors.

b) Statutory Auditors Report:

The Statutory Auditors have not made any adverse comments or given anyqualification reservation or adverse remarks or disclaimer in their Audit Report on theFinancial Statements for Financial Year 2021-22. The Emphasis of Matters and facts givenin auditors' report are self-explanatory. The same have also been explained in Notenos. 13 39 & 40 to Accounts of the Financial Statement of the Company for thefinancial year ended 31st March 2022. Hence no other explanation is requiredto be given in Board Report. Further the Statutory Auditors have not reported any fraudin terms of Section 143(12) of the Act

c) Secretarial Auditors:

Pursuant provisions of section 204 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has at its meeting held on 13th August 2021 appointed M/s S.S. Bhati& Associates a firm of Company Secretaries in practice to undertake the SecretarialAudit of the Company for the financial year 202122.

d) Secretarial Audit Report

The Secretarial Audit Report submitted by the Secretarial Auditor forthe financial ended 31st March 2022 in Form MR-3 is annexed as an Annexure-A and is forming integral part of this report. Such Secretarial auditors' reportis also self-explanatory and does not contain any qualifications reservations or adverseremarks.

21. CERTIFICATE FROM PRACTISING COMPANY SECRETARY WITH REGARDS TO NONDISQALIFICATION OF DIRECOTRS

A certificate from M/s S.S Bhati & Associate Practicing CompanySecretary to the effect that none of the directors on the Board of the Company have beendebarred or disqualified from being appointed or continuing as directors of the Company bythe Ministry of Corporate Affairs Securities and Exchange Board of India or any otherstatutory authority is attached and is forming part of Corporate Governance Report.

22. FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

With an aim to provide insights into the Company to enable theIndependent Directors to understand its business in depth and contribute significantly afamiliarization program has been designed for the Independent Directors. Pursuant toRegulation 25(7) of SEBI Listing Regulation the Company makes detailed presentations tothe Board including Independent Directors on the Company's operation and businessplans the nature of industry in which Company operates and model of respectivebusinesses major risks involved and risk management strategy of the Company.

The Independent Directors are made aware with their duties roleresponsibilities and liabilities at the time of their appointment/reappointment through aformal letter of appointment which stipulates various terms and conditions of theirengagement apart from clarifying their roles and responsibilities.

Further in line with the policy of the Company as framed in thisregard and in compliance with the requirements of the SEBI Listing Regulations afamiliarization exercise for Independent Directors of the Company was carried out on 15thMarch 2022 wherein all the Independent Director have participated aptly.

23. CODE OF CONDUCT

The Board of directors has approved a Code of Conduct which isapplicable to the members of the Board and all employees in the course of day to daybusiness operations of the Company. The Code has been placed on the Company's websitewww.sainikfinance.com. The Code lays down the standard procedure of business conduct whichis expected to be followed by the Directors and the designated employees in their businessdealings and in particular on matters relating to integrity in the work place in businesspractices and in dealing with stakeholders. All the Board Members and the SeniorManagement personnel have confirmed compliance with the Code.

24. MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013 read with the rules made thereunder and pursuant to the provision ofSEBI (Listing Obligations and Disclosure Requirements) 2015 the Company has establisheda Vigil Mechanism to be known as the ‘Whistle Blower Policy' for its Directorsand Employees to report instances of unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct. The aim of the policy is to provideadequate safeguards against victimization of Whistle Blower who avails of the mechanismand also provide direct access to the Chairman of the Audit Committee in appropriate orexceptional cases.

Accordingly Vigil Mechanism / Whistle Blower Policy have beenformulated with a view to provide a mechanism for the Directors and employees of theCompany to approach the Ethics Officer or the Chairman of the Audit Committee of theCompany. The purpose of this policy is to provide a framework to promote responsible andsecure whistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company. During the financial year 2021-22 no such complaint ofunethical or improper activity has been received by the Company.

25. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The Code requires pre-clearance for dealing in theCompany's shares and prohibits the purchase or sale of Company shares by theDirectors and the designated employees while in possession of unpublished price sensitiveinformation in relation to the Company and during the period when the Trading Window isclosed. The Board is responsible for implementation of the Code. All Board Directors andthe designated employees have confirmed compliance with the Code.

26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO:

The particular as prescribed under Rule 8(3) of the Companies(Accounts) Rules 2014 read with the provisions of Section 134(3) (m) of the CompaniesAct 2013 are as follow:

A) Conservation of energy-

Sr. Particular No. Remark
(i) The steps taken or impact on conservation of energy; Your Company carries out its business in an environmental friendly manner and is on the look-out for different ways & means to reduce the consumption of energy in its operations.
(ii) The steps taken by the company for utilizing alternate sources of energy; The Company does not require any alternative sources of energy.
(iii) The capital investment on energy conservation equipment; The Company's operations do not require capital investment on energy conservation equipment.

B) Technology absorption adaption and innovation:

Sr. Particular No. Remark
(i) The efforts made towards technology absorption; The Company continues to use the latest technologies for improving the productivity and quality of its services.
(ii) The benefits derived like product improvement cost reduction product development or import substitution; Not Applicable
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year. The details of technology imported; The year of import; whether the technology been fully absorbed; If not fully absorbed areas where absorption has not taken place and the reasons thereof; and The Company's operations do not require significant import of technology.
(iv) The expenditure incurred on Research and Development. The Company's operations do not require the expenditure on Research and Development

C) Foreign exchange earnings and Outgo

During the year under review there was no Foreign Exchange Earningsand Foreign Exchange Outgo.

27. MATERIAL CHANGES AND COMMITMENTS IF ANY

Apart from the information provided / disclosures made elsewhere in theDirectors' Report including Annexures thereof there are no material changes andcommitments affecting the financial position of the Company which occurred between theend of the financial year of the Company i.e. 31st March 2022 to which thisfinancial statement relates and till date of this Report.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review the Company has spent Rs.5.20 Lakhs onCorporate Social Responsibility (CSR) activities as against mandatory expenditures (CSRBudget) of Rs.5.19 Lakhs. Detailed information on the CSR policy and CSR initiatives takenduring year under review and Annual Report on CSR activities including composition of theCSR Committee is given in the Annexed as Annexure-B and is forming integral part ofthis report.

Further the Company's net loss calculated in accordance with theprovisions of section 198 of the Companies Act 2013 for the financial year ended 31stMarch 2022 is Rs.921.98lakh and average net loss of preceding three financial years isRs.276.62 Lakhs. Hence the Company does not require to spend any amount on CSR Activitiesduring the financial year 2022-23. Therefore the Committee did not recommend to the Boardthe CSR Budget for the financial year 2022-23 for making expenditure / contribution on theactivities mentioned in the CSR policy of the Company and in Schedule -VII of theCompanies Act 2013 as amended from time to time.

29. RELATED PARTY TRANSACTIONS

The main business of the Company is financing & investment insecurities etc. and granting loans to related or unrelated parties. All related partytransactions that were entered into during the financial year as per compliance ofprovision of Companies Act 2013 & SEBI regulations as certified by CEO & CFO ofthe Company forming part of Corporate Governance Report. All related party transactionsare placed before the Audit committee for their consideration and approval. None of thetransactions with related parties falls under the scope of section 188(1) of the Act.However the related party transactions so entered are disclosed in note No.36 toFinancial Statement of the Company as attached herewith. Further details of all relatedparty transactions including material related party transaction are also given in AOC-2attached herewith as Annexure- C and is forming integral part of this Report. ThePolicy relating to related party transactions duly approved by the Board of Directors ofthe Company has been placed on the Company's website www.sainikfinance.com

30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In terms of the provisions of Regulation 34(2)(e) of the SEBI ListingRegulations the Management's Discussion and Analysis Report covering the performanceand outlook of the Company is annexed herewith as Annexure-D and forming part ofthis Annual Report.

31. CORPORATE GOVERNANCE REPORT

The Company is committed to good Corporate Governance as therequirement of the Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. As required under Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a detailed report on Corporate Governancetogether with Certificate issued by M/s S.S. Bhati & Associates Practicing CompanySecretaries on compliance of conditions of Corporate Governance is annexed herewith as Annexure-Eand is forming integral part of this Report.

32. DISCLOSURE RELATING TO MAINTENANCE OF COST RECORD

As the Company is Non-Banking Finance Company the Central Governmentdoes not require to maintenance of cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013. Hence the provisions ofCost Audit are not applicable to the Company.

33. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

In compliance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 notified on December 9 2013 theCompany has a policy for Prevention of Sexual Harassment of Women at Workplace and hascomplied with the provisions of this Act. During the financial year ended 31stMarch 2022 no complaint of sexual harassment has been received by the Company during theyear under review.

34. DISCLOSURE ABOUT THE SHARES ISSUED ON PREFERENTIAL BASIS IF ANY.

During the year under review your Company has not made any allotmentof shares on preferential basis.

35. DISCLOSURE ABOUT SWEAT EQUITY SHARES AND ESOP SCHEME.

Your company has not issued sweat equity shares or given stock optionin the year under review.

36. SECRETARIAL STANDARDS OF ICSI

The Company has complied with the requirements prescribed under theSecretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings(SS-2) read with the MCA circulars granting exemptions in view of the COVID-19 pandemic.

37. ANNUAL RETURN

In compliance with the provision of Section 92(3) and Section 134(3)(a)of the Companies Act 2013 the copy of annual Return in Form MGT-7 as on 31stMarch 2022 is being placed on the website of the Company at www.sainikfinance.com

38. OTHER STATUTORY DISCLOSURES

a) The securities of the Company were not suspended from trading duringthe year under review on account of corporate actions or otherwise.

b) The Company has not defaulted in repayment of loans from banks andfinancial institutions. There were no delays or defaults in payment of interest /principle of any of its debt securities.

c) During Financial year under review there was no instance ofone-time settlement with Banks or Financial Institutions. Therefore as per rule 5(xii) ofCompanies (Accounts) Rules 2014 reasons of difference in the valuation at the time ofone-time settlement and valuation done while taking loan from the Banks or FinancialInstitutions are not reported.

d) The Securities of the Company are listed on BSE Limited Mumbai. Thelisting fee for the financial year- 2022-23 has been paid.

e) During the year under review the Company has neither made anyapplication nor any proceeding were pending under the Insolvency and Bankruptcy Code 2016("IBC Code"). Further at the end of the financial year Company does not haveany proceedings related to IBC Code.

39. ACKNOWLEDGEMENT

The Board of Directors places its gratitude and appreciation for thesupport and cooperation from its members the RBI and other regulators banks financialinstitutions and employees during the year under review. The directors also acknowledgewith appreciation the support and co-operation rendered by various Government authoritiesand departments. Your Directors would also wish to place on record their deep sense ofappreciation for the continued support of all the investors of the Company.

By Order of the Board of Directors
For SAINIK FINANCE & INDUSTRIES LIMITED
Kuldeep Singh Solanki Director Rudra Sen Sindhu Director
Place: New Delhi DIN: 00009212 DIN: 00006999
Dated: 12th August 2022

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