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SREI Infrastructure Finance Ltd.

BSE: 523756 Sector: Financials
NSE: SREINFRA ISIN Code: INE872A01014
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OPEN 2.42
PREVIOUS CLOSE 2.54
VOLUME 9899
52-Week high 6.97
52-Week low 2.42
P/E 26.89
Mkt Cap.(Rs cr) 122
Buy Price 2.42
Buy Qty 4392.00
Sell Price 2.44
Sell Qty 10650.00
OPEN 2.42
CLOSE 2.54
VOLUME 9899
52-Week high 6.97
52-Week low 2.42
P/E 26.89
Mkt Cap.(Rs cr) 122
Buy Price 2.42
Buy Qty 4392.00
Sell Price 2.44
Sell Qty 10650.00

SREI Infrastructure Finance Ltd. (SREINFRA) - Director Report

Company director report

(Report of Advisory Committee chaired by the Administrator)

DEAR MEMBERS

The Reserve Bank of India (RBI) vide Press Release dated October 042021 in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank ofIndia Act 1934 (RBI Act) superseded the Board of Directors of your Company and SreiEquipment Finance Limited (SEFL) Wholly Owned Subsidiary of your Company on October 042021 owing to governance concerns and defaults by your Company and SEFL in meeting variouspayment obligations and the RBI appointed Mr. Rajneesh Sharma as the Administrator of yourCompany and SEFL under Section 45-IE (2) of the RBI Act. Thereafter RBI vide its PressRelease dated October 4 2021 in exercise of the powers conferred under Section 45-IE5(a) of the RBI Act constituted a 3 (Three) member Advisory Committee to assist theAdministrator in discharge of his duties and to advise the Administrator in the operationsof your Company and SEFL during the Corporate Insolvency Resolution Process (CIRP). Themembers of the Advisory Committee are Mr. T T Srinivasaraghavan former Managing Directorof Sundaram Finance Limited Mr. Farokh N Subedar former Chief Operating Officer andCompany Secretary Tata Sons Limited and Mr. Venkat Nageswar Chalasani former DeputyManaging Director State Bank of India (appointed w.e.f. June 23 2022). Mr. RSubramaniakumar former MD & CEO of Indian Overseas Bank who was originally appointedas a Member of the Advisory Committee on October 04 2021 resigned from the AdvisoryCommittee w.e.f. June 22 2022.

On October 08 2021 the RBI filed a Petition before the Hon'bleNational Company Law Tribunal Kolkata Bench (Hon'ble NCLT/ Adjudicating Authority)under Section 227 read with Section 239(2)(zk) of the Insolvency and Bankruptcy Code 2016(IBC / IBC Code / Code) read with Rules 5 and 6 of the Insolvency and Bankruptcy(Insolvency and Liquidation Proceedings of Financial Service Providers and Application toAdjudication Authority) Rules 2019 (FSP Rules) to initiate CIRP against your Company andSEFL. Accordingly in terms of Rule 5(b)(i) of the FSP Rules an interim moratorium cameinto effect on the date of filing of the application to initiate CIRP. Thereafter CIRPwas initiated against your Company and SEFL by an Order dated October 8 2021 of theHon'ble NCLT. The Hon'ble NCLT vide the said Order confirmed the appointmentof the Administrator to perform the functions of an Interim Resolution Professional /Resolution Professional and to complete the CIRP of your Company and SEFL as requiredunder the provisions of the Code and also announced commencement of the moratorium underSection 14 of the Code with effect from October 08 2021.

Accordingly your Company along with SEFL is presently undergoingCIRP under the provisions of the Code along with the Regulations and Rules thereunder andthe Administrator performing the duties of the Resolution Professional under the Codealong with the Advisory Committee is presenting this Report.

The Administrator of your Company in light of the provision of the Codehad constituted the Committee of Creditors (CoC) of your Company and SEFL u/s 21 of theCode read with Regulation 17 of the CIRP Regulations based on the claims submitted by theCreditors.

Pursuant to an application filed by the Administrator with theHon'ble NCLT seeking ‘group Insolvency' for your Company and SEFL onDecember 21 2021 the Hon'ble NCLT vide its order dated February 14 2022(‘Consolidation Order') ordered the consolidation of the CIRP of your Companyand SEFL and has directed the Administrator to constitute a unitary and integrated CoC toconduct CIRP of both the Companies and to conduct the requisite processes in a concertedmanner. The Hon'ble NCLT also directed the Administrator to call for consolidatedresolution plans for both your Company and SEFL under the Code and the Regulations framedthereunder. Accordingly the Administrator of your Company pursuant to the saidConsolidation Order had constituted a unitary and integrated CoC to conduct CIRP of yourCompany and SEFL and has called for consolidated resolution plans for both the Companiesunder the Code and the Regulations framed thereunder.

In accordance with the provisions of the Code and with the approval ofthe Committee of Creditors of your Company the Administrator on February 25 2022 invitedexpressions of interest (EOI) from prospective resolution applicants. Subsequentlyresolution plans were invited from eligible prospective resolution applicants on the basisof the Request for Resolution Plan (RFRP) as approved by the CoC.

On April 06 2022 the final list of Prospective Resolution Applicantsas per Regulation 36A(12) of CIRP Regulations read with FSP Rules were received andupdated on the website of the Company under the linkhttps://www.srei.com/storage/app/media/documents/2022/april/Srei_Final%20List%20of%20PRAs.pdf

The Boards Report (Report of Advisory Committee chaired by theAdministrator) is being taken on record by the Administrator and the Advisory CommitteeMembers (ACM) only for the purpose of compliance. Further the Company's existingmanagement has confirmed to the Administrator and the Advisory Committee about the factualposition prevalent in your company prior to their joining.

The Thirty Seventh Annual Report together with the Audited Accounts ofyour Company for the financial year ended March 31 2022 is being presented. Since theBoard of Directors of your Company was superseded by the RBI under press release datedOctober 04 2021 the said following report is being presented by the Administrator andthe Advisory Committee of the Company in fulfilment of their duties under the Code. Thesummarised financial performance of your Company is as follows.

KEY FINANCIALS FINANCIAL SUMMARY & STATE OF AFFAIRS

(Rs in Lacs)

Consolidated

Standalone

Particulars
Year ended 31st March 2022 Year ended 31st March 2021 Year ended 31st March 2022 Year ended 31st March 2021
Total Income 312197 348879 3230 5001
Total Expenses (including impairment on financial instruments depreciation etc.) 559577 1066760 4583 8518
Profit / (Loss) Before Exceptional Items & Tax (247380) (717881) (1353) (3517)
Exceptional Items 310455
Adjustment on disposal /cessation of Subsidiaries and Associate
Profit / (Loss) Before Tax from continued operations (247380) (717881) (1353) (313972)
Profit / (Loss) Before Tax from discontinued operations
Profit / (Loss) Before Tax (247380) (717881) (1353) (313972)
Current Tax* 252 115
Income Tax in respect of earlier year* 6881 (4387) (2926) (54)
Deferred Tax* (38) 20230 (19446)
Profit / (Loss) After Tax but before Loss of Associate (254475) (733839) 1573 (294472)
Share of Profit/ (Loss) of Associate
Profit / (Loss) After Tax before adjusting Minority Interest (254475) (733839) 1573 (294472)
Non-Controlling Interest 56 81
Profit / (Loss) After Tax after adjusting Minority Interest (254475) (733920) 1573 (294472)
Surplus brought forward from previous year (Retained Earnings) (1218576) (39663) (25738) 36288
Other Comprehensive Income (net of tax) (17688) 13771 (32707) 13927
Profit Available for Appropriation (Retained Earnings) (1473135) (773308) (256117) (258162)
Paid up Equity Share Capital 50309 50309 50309 50309
Amount transferred to Reserves (446032)
Other Equity excluding Revaluation Reserves (640417) (368209) (77721) (46587)
Earnings Per Share (Rs.)* 50.58 (145.87) 0.31 (58.53)

OPERATIONAL REVIEW

Some of the key highlights of your Company's performance duringthe year under review are:

Total Income is Rs3230 Lacs as against Rs5001Lacs in the last year.

Profit / (Loss) before taxation is Rs(1353) Lacsas against Rs(313972) Lacs in the last year.

Net Profit / (Loss) after taxation is Rs1573 Lacsas against Rs(294472) Lacs in the last year.

Key Financial Ratios (in terms of Schedule V of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015) are asunder -

Particulars 2021-22 (%) 2020-21 (%)
Return on Net worth Negative Negative
Yield on Average Funds Nil Nil
Cost of Funds 10.00 10.00
Gross Interest Spread Nil Nil
Return on Average Assets on Books Negative Negative
Capital to Risk Assets Ratio (CRAR) (7.82) % 25.83

Ratios where there has been a significant change (i.e. change of 25 percent or more as compared to the immediately previous financial year) along with reasonsthereof:

Return on Networth is negative & Profit After Tax of your Companyduring the Financial Year 2021-22 was Rs1573 Lacs compared to Loss After Tax of Rs294472 Lacs in Financial Year 2020-21 while Networth stands at negative Rs4452Lacs in Financial Year 2021-22 compared to negative Rs6079 Lacs in Financial Year2020-21.

SEFL reported a loss after tax of Rs2772.92 Crores for thefinancial year ended March 31 2022 as compared to Rs7136.11 Crores for theFinancial Year ended on March 31 2021. At the end of the financial year the Gross NPAs %of SEFL were 71.52% as against 60.94 % in the previous year. The net NPAs (excludingimpairment Reserve) for SEFL were 61.88% at the end of the Financial Year under review asagainst 51.65% in the previous year. The net NPAs (including impairment Reserve) for SEFLwere 52.97% at the end of the Financial Year as against 43.52% in the previous year.

Considering the above facts your Company has assessed the carryingamount of its investment in SEFL in compliance with Ind AS and has made an impairmentprovision of Rs3104.55 Crores during the Quarter and Financial Year ended on March31 2021 bringing down the carrying amount of its investment in SEFL to Rs1. Thishas resulted in negative net worth of your Company.

Gross Interest Spread is computed as the difference between yield onaverage funds and cost of funds. Since your Company has not done any lending businessduring the year there is no interest income and hence Gross Interest Spread is nil.

Return on Average Assets on Books is negative since there is loss inyour Company due to impairment provisions on Investments.

The Financial Statements of your Company have been prepared inaccordance with Ind AS and the relevant provisions of the Companies Act 2013 and rulesmade therein as applicable and Regulation 48 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as ‘SEBI Listing Regulations 2015'). Accounting policies have beenconsistently applied except where a newly issued accounting standard if initially adoptedor a revision to an existing accounting standard requires a change in the accountingpolicy hitherto in use. Management evaluates all recently issued or revised accountingstandards on an on-going basis. Your Company discloses standalone and consolidatedunaudited financial results on a quarterly basis which are subjected to limited reviewand standalone and consolidated audited financial results on an annual basis.

Your Company has been complying with all the norms prescribed by theReserve Bank of India (RBI) including the Fair Practices Anti Money Laundering and KnowYour Customer (KYC) guidelines from time to time as per their circulars.

Standalone

During the financial year under review the standalone and consolidatedfinancial statements for the year ended March 31 2022 have been prepared as per the IndAS. For the financial year under review your Company suffered a Loss Before Taxes of (Rs1353)Lacs as against (Rs3517) Lacs in the previous financial year and Profit/Loss AfterTax for the year under review is (Rs1573) Lacs as against a loss of (Rs294472)Lacs in the previous financial year.

Consolidated

During the financial year under review your Company's totalrevenue on consolidated basis stood at Rs312197 Lacs as compared to Rs348879Lacs in the previous financial year. The overall operational expenses for the financialyear under review were Rs559577 Lacs as against Rs1066760 Lacs in theprevious financial year. Operating Loss Before Tax for the year under review stood at Rs(247380)Lacs as compared to Rs(717881) Lacs in the previous financial year. The LossAfter Tax for year under review stood at Rs(254475) Lacs as against Rs(733839)Lacs in the previous financial year.

TRANSFER TO RESERVES

Your Company has not transferred any amount to reserves due to lossesincurred during the Financial Year ended on March 31 2022.

CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP)

The Administrator under Section 13 of the Code read with Regulation 6of the Corporate Insolvency Resolution Process (CIRP) Regulations had issued a publicannouncement as prescribed in Form A on October 11 2021 for attention of the creditors ofyour Company to submit their claims against your Company. The Administrator on receipt ofthe claims from the creditors has prepared a list of creditors (including FinancialOperational Workmen & Employees and Other Creditors) along with their securityinterest therein pursuant to Regulation 13(2)(c) of the CIRP Regulations and such list ofcreditors has been made available to the stakeholders of your Company on yourCompany's website. The claims have been admitted based on the information availablein the books of accounts and records available with your Company and the informationprovided by the respective creditors in this regard.

It is pertinent to note that the admission of claims is a part of theCIRP and the same are subject to revision / modification till such date they arefinalized.

The Administrator after preparing the list of claims of the creditorshad constituted the Committee of Creditors (CoC) of your Company u/s 21 of the Code readwith Regulation 17 of the CIRP Regulations. The Committee of Creditors is comprised offinancial creditors of your Company as per Section 21 of the Code read with Regulation 17of the CIRP Regulations. The Committee of Creditors had met 3 (Three) times during theyear since initiation of CIRP. Further the CoCs of your Company and Srei EquipmentFinance Limited Subsidiary Company (SEFL) in their respective CoC meeting held onNovember 29 2021 approved the consolidation of CIRP of your Company and SEFL andauthorised the Administrator to file an application before Hon'ble NCLT Kolkata inthis regard. The Administrator of your Company by virtue of such authorization has filedan Interlocutory Application before the Hon'ble National Company Law TribunalKolkata Bench praying for the consolidation of the Corporate Insolvency ResolutionProcesses of both the Companies. The Hon'ble National Company Law Tribunal vide itsOrder dated February 14 2022 was pleased to admit the application and had directed forconsolidation of the Corporate Insolvency Resolution Processes of your Company and SreiEquipment Finance Limited (SEFL). Pursuant to the said Order the Administrator of yourCompany had constituted a unitary and integrated CoC to conduct CIRP of both the Companiesand had called for consolidated resolution plans for both the Companies under the Code andthe Regulations framed thereunder. The composition of the consolidated CoC is available onhttps://www.srei.com/storage/app/media/documents/2022/march/constitution-ofconsolidated-coc-sifl-and-sefl-pursuant-to-honble-nclt-order160322.pdf.The Consolidated CoC met 13 (Thirteen) times since its constitution.

In accordance with the provisions of the Code and with the approval ofthe Committee of Creditors of your Company (‘COC') the Administrator onFebruary 25 2022 invited expressions of interest (‘EOI') from prospectiveresolution applicants for both SEFL and your Company in a consolidated manner.Subsequently resolution plans were invited from eligible prospective resolutionapplicants on the basis of the Request for Resolution Plan (RFRP) as approved by the CoC.

The final list of eligible prospective resolution applicants as perRegulation 36A(12) of Insolvency and Bankruptcy Board of India (Insolvency ResolutionProcess for Corporate Persons) Regulations 2016 read with FSP Rules were received anduploaded on the website of your Company under the linkhttps://www.srei.com/storage/app/media/documents/2022/april/Srei_Final%20List%20of%20PRAs.pdf on April 06 2022.

As part of the CIRP of your Company the Administrator AdvisoryCommittee and the present management team of your Company have taken various initiativesto ensure "going concern" status of your Company as required u/s 20 of theInsolvency and Bankruptcy Code ("Code"). Further the Code and Regulationsthereunder stipulate prior approval by the CoC for certain actions to be taken during theprocess including as provided u/s 28 of the Code. The Administrator and the AdvisoryCommittee as set up by the RBI to assist the Administrator in discharge of his dutiesexercise oversight on the operations of your Company apart from running the CIRP inaccordance to the provisions of the Code and Regulations under the Code. The Administratorhas appointed Ernst & Young LLP and AZB & Partners as process and Legal Advisorsrespectively to assist him in the Completion of the CIRP of your Company. Further variouscommittees have been constituted/re-constituted by the Administrator with a view to have agroup of in-house executives of your Company who can help the business navigate itscompliance obligations.

The present management of your Company under the guidance of theAdministrator has undertaken various initiatives including efforts to strengthen thepolicies and processes functioning of the IT System legal internal audit internalfinancial controls and updating risk control matrices information security operationaland credit management risk and fraud risk management through in-house resources andengagement of external professional experts/consultants. The management team alsoinitiated steps for compliance of various applicable rules and regulations within yourCompany.

These initiatives contributed to strengthen your Company's overallgovernance structure and control environment. On conclusion and complete implementation ofall such initiatives it is expected that the operational efficiency will improve andoperational issues will get addressed.

The Administrator acting as the Resolution Professional under theprovision of the Code had appointed BDO India LLP as Transaction Auditor.

DIVIDEND

Owing to the loss incurred by your Company for the Financial Year underreview and due to the ongoing CIRP no dividend has been declared/ recommended on theEquity Shares for the Financial Year ended March 31 2022.

PUBLIC DEPOSITS

Your Company decided not to accept any further public deposits or renewsuch maturing deposits in any manner w.e.f. April 20 2010 and the entire amount ofoutstanding public deposits as on April 19 2010 together with interest promised to thedepositors was kept in an Escrow Account with a scheduled commercial bank for the purposeof making payment to the depositors as and when they raise the claim. As on March 31 2022your Company does not have any unpaid / unclaimed deposits payable to the depositors.

Being a Non-Banking Non Deposit taking Company your Company has notaccepted any deposits from the public/members under Section 73 of the Companies Act 2013read with Companies (Acceptance of Deposits) Rules 2014 during the year and within themeaning of the provisions of the Non-Banking Financial Companies Acceptance of PublicDeposits (Reserve Bank) Directions 2016.

PROMOTERS' GROUP SHAREHOLDING

As on March 31 2022 the total shareholding of the Promoters'Group of your Company is 60.80 per cent and none of the Promoter/Promoters' Groupshareholding is under pledge. Further in compliance with Regulation 31(2) of SEBI ListingRegulations 2015 the entire shareholding of promoter(s) and promoter group is indematerialised form.

TRANSFER OF LENDING BUSINESS INTEREST EARNING BUSINESS & LEASEBUSINESS OF YOUR COMPANY TO SREI EQUIPMENT FINANCE LIMITED AS A GOING CONCERN ON SLUMPEXCHANGE BASIS

During the Financial Year 2019-20 the Board of Directors of yourCompany and Srei Equipment Finance Limited (SEFL) wholly owned subsidiary of your Companyat their respective meetings held on July 04 2019 had for the purposes of consolidationof lending business approved the transfer assignment and delivery of the LendingBusiness Interest Earning Business & Lease Business of your Company together withassociated employees assets and liabilities (including liabilities towards issued andoutstanding non-convertible debentures) ("Transferred Undertaking") as a goingconcern by way of slump exchange to SEFL through a Business Transfer Agreement (BTA) inexchange of fully paid up equity shares to be issued and allotted by SEFL subject to allnecessary approvals.

Pursuant to the aforesaid BTA was signed and executed by your Companyand SEFL on August 16 2019. Pursuant to the said BTA the entire fund-based businessdivision of your Company alongwith all its assets and liabilities has been transferred toSEFL with effect from October 01 2019. Further an amendment to the aforesaid BTA wasexecuted on 14th November 2019 with SEFL. Pursuant to this your Company has entered intovarious assignment agreements in connection with the Transferred Undertaking with SEFLto give effect of the slump exchange and accordingly your Company and SEFL has passed therelevant accounting entries in their respective books of account effective October 012019 after receiving the approval of the shareholders debenture trustees few lendersstock exchanges and in-principle approval from some or the domestic lenders including leadbanks.

The consent or otherwise of other lenders is still awaited. Thesuperseded Board of Directors and erstwhile management of your Company as existed priorto the appointment of the Administrator had obtained expert legal and accounting opinionsin relation to the accounting of the slump exchange transaction which confirmed that theaccounting treatment so given is in accordance with the relevant Indian AccountingStandards (Ind AS) and the underlying guidance and frame work.

Moreover SEFL had also proposed the Schemes with its Creditors and theapplication to that effect had been filed with the Hon'ble National Company LawTribunal Kolkata Bench (Hon'ble NCLT). BTA inter alia constituted an integral partof the Scheme. The Hon'ble NCLT vide Order dated October 21 2020 directed SEFL tohold meetings of the Creditors to vote on the Scheme and the same was rejected by theCreditors and thus the slump exchange under the BTA did not fructify. Pending finaldecision in the matter SEFL and your Company had maintained status quo for BTA as per thedirections of Hon'ble NCLT.

After the commencement of CIRP an Application was filed by theAdministrator of your Company seeking to withdraw the Scheme of Amalgamation which hasbeen allowed by the NCLT by an order dated February 11 2022. Your Company is in theprocess of consolidated resolution of SIFL and SEFL and hence no further action is beingcontemplated regarding establishing the validity of the Business Transfer Agreement orotherwise consequent upon the withdrawal of Schemes as stated above. Accordingly thestatus quo regarding Business Transfer Agreement as it existed on the date ofcommencement of the Corporate Insolvency Resolution Process has been maintained.

DISCUSSION AND ANALYSIS REPORT

Economic Review

For two full years successive waves of the COVID-19 pandemic have keptglobal growth suppressed. Of late thanks to the increased pace of vaccination the virusseems to be losing its severity but the global economy is yet to come to terms with thedisruption caused by the pandemic. On top of that new challenges have emerged in the formof geo-political tensions between Russia and Ukraine. The disruption in global supplychains and logistics which started with the pandemic has now got prolonged with theRussia-Ukraine war. The sanctions which have been imposed on Russia by various developednations as a reaction to this turmoil are bound to push up prices of oil and gas as wellas impact global trade and commerce. In addition the unwinding of stimulus packages bymost developed nations is likely to push up cost of credit. A combination of all thesefactors along with subdued private consumption will further delay the recovery in globaleconomy.

As per the International Monetary Fund (IMF) global growth is expectedto moderate from 5.9 percent in 2021 to 4.4 percent in 2022 and then further to 3.8percent in 2023. With the new developments on the geo-political front and a lack ofclarity on whether the virus will mutate further the future still remains uncertain and afull-fledged recovery seems still some time away.

The Reserve Bank of India (RBI) remained accommodative throughout thepandemic supporting the government's supply-side initiatives to revive the economy.However the RBI may have to change its stance soon. The wholesale price index (WPI)inflation in double digits for 11 months in a row from April 2021 to February 2022 and theconsumer price index (CPI) inflation has been rising steadily. Now with the recentgeopolitical developments and the resultant spiking of commodity and energy prices asituation of spiraling inflation seems very likely in near future. Meanwhile the pandemichas had a severe impact on the micro small and medium enterprises (MSMEs). A steady risein unemployment has kept private sector consumption muted. In this backdrop crowding inof private investment is likely to take longer. Public investment will therefore remainthe key in holding up investment demand.

However amidst all these developments the global investor'sbullishness on the India Story seems to be intact. After recording a total FDI (equity +reinvested earnings + other capital) of USD 81.97 billion in 2020-21 India was able toattract FDI worth USD 60.34 billion during April-December of 2021-22. As on end-March2022 India's foreign exchange reserves stood at around USD 620 billion enough forthe RBI to deal with possible currency volatilities especially during times ofgeopolitical tension.

The government is working towards regaining the lost economic momentumthrough rapid infrastructure creation. These projects through upstream and downstreamlinkages are expected to generate new employment create entrepreneurship opportunitiesfuel domestic demand and eventually crowd in private investment.

Developments in the NBFC sector

In India as on September 2021 there were approximately 9680 Non-Banking Financial Companies (NBFCs). These entities play an active role in promotingfinancial inclusion as well as in nation building. They cater to the funding needs of theMicro Small and Medium Enterprises (MSMEs) and also provide structured credit especiallyto those companies providing services like construction and transportation in theinfrastructure sector.

The NBFCs have been facing difficult times even before the pandemic.Ever since the IL&FS episode in 2018 the options for raising resources for NBFCs havebecome very limited. It is worth noting that while the RBI serves as a lender of lastresort for the banks the NBFCs have no such recourse. Ideally an institution should becreated exclusively for refinancing the NBFCs in the lines of the National Housing Bankwhich refinances the Housing Finance Companies (HFCs).

The pandemic-related stress continued for the NBFCs during the yearunder review. Although the RBI opened a special liquidity window for the NBFCs only theones owned by the government or backed by big corporate houses and with superior ratingswere able to access it. Thus majority of the NBFCs continued to face massive mismatch intheir cash flows whether involved in retail lending or wholesale lending. Already thebusiness model of some of these NBFCs which are into structured credit is under threatespecially those which have extended credit facilities primarily to infrastructurecompanies.

In spite of performing many of the same functions as banks the NBFCshave been subject to asymmetrical regulations vis-?-vis the banks. Even before thepandemic a trend of regulatory convergence of the NBFCs with the banks was visible butonly from the asset side and not the liability side. During the year under review thattrend of regulatory convergence from the asset side continued.

The RBI introduced a ‘scale-based regulation' aimed atmitigating any systemic risk amid looming fear of rise in bad loans post the pandemic.Those include

Base Layer Middle Layer Upper Layer and Top Layer. The Middle Layerentails the ones with asset size of over Rs1000 crore and all deposit taking NBFCsirrespective of their asset size. Your Company falls in the said Middle Layer.

Business Outlook & Future Plans

Most of the players within the NBFC sector including your Companyhave been experiencing difficult times because of the prolonged uncertainty due to bothunfavourable regulatory changes and the pandemic. Your Company in order to tide over theproblems was in the process of re-inventing its business model. It had also stoppedtaking exposure in project financing. With the government significantly increasing budgetallocations for infrastructure healthcare and agriculture sectors along with the massiveinvestments going into technology upgradation by both the government and corporatesectors your Company was preparing itself to tap the asset financing opportunitiesopening up in these sectors by consolidating assets and liabilities under its wholly-ownedsubsidiary Srei Equipment Finance Ltd. (SEFL) by way of a slump exchange. Your Company wasalso exploring new avenues of capital and resource mobilisation and was open to bringingin new set of investors if needed.

However on October 04 2021 the RBI initiated insolvency proceedingsagainst your Company and SEFL and superseded the boards of both the companies. To bringabout resolution of the two companies the RBI has appointed Mr. Rajneesh Sharma as theAdministrator for the two companies. Since then the focus has been exclusively on therecovery of dues from the customers. The Administrator has also invited bids for the twocompanies.

With the Central Government stepping up its capital expenditure budgetby 35.4 per cent to Rs7.5 trillion for 2022-23 there will be plenty ofopportunities for your Company to tap into. In addition with the rich repository ofdomain knowledge across various infrastructure sectors your Company will be active in theInfrastructure Advisory space as there will be plenty of greenfield and brownfieldprojects coming up.

The Covid – 19 pandemic continued to impact India and world duringthe Financial Year ended March 31 2022 creating unforeseen challenges. The IndianConstruction and Mining Equipment Industry witnessed de-growth of 8% in FY-2022 primarilyattributed to the significant slowdown observed in construction activity across thecountry. The most significant decline was observed in the space of Roads and Highwaysconstruction which declined to -28.6 Kms per day during FY-2022 vis-a-vis 36.5 Kms per dayrecorded in FY-2021. Besides the pandemic induced slowdown natural disasters likecyclones and heavy rains in Southern India and ban imposed on construction activity inNorthern India due to pollution concern in latter half of 2021 had an adverse impact onthe CE industry. On a positive note exports grew at a phenomenal rate of 60% YoY inFY-2022. With new CEV-IV emission standards now completely adopted by the industry thereare significant opportunities for the Indian CE manufacturers to tap into the developedmarkets.

The Government of India's strong thrust on infrastructuredevelopment through the announcement of various mega plans including NationalInfrastructure Pipeline Gati Shakti Masterplan National Monetisation Plan constitutionof National Bank for Financing Infrastructure and Development (NABFID) and increase inbudget outlay on capital expenditure for Financial Year ended March 31 2023 by more than35% from INR 5.54 lakh crore to INR 7.50 lakh augurs well for the future of theindustry. The first three quarters of Financial Year ended March 31 2022 cumulativelyremained near to flat in terms of sales volume and registering a growth of only around2.5% as compared to Financial Year ended March 31 2021. There has been slow progress inroad construction lower budget allocation for airport development and inadequateutilization of funds for real estate and infrastructure leading to lower equipment sales.However high speed train and metro rail construction gave momentum for material handlingconcreting & material processing sub segments equipment. The earthmoving segment haswitnessed a ~14% YoY de-growth in sales. The primary driver for de-growth has been thedomestic Backhoe loader sales (34% decline YoY) especially impacted by the 70- 80 HPcategory. However exports have seen a significant growth compared to last year (~69%YoY) with increase in Backhoe loader (~73% YoY) and Crawler Excavator exports (~67% YoY)being the primary drivers. The road construction segment has witnessed a ~10% YoYde-growth in sales primarily due to fall in domestic sales showcasing a ~14% YoYde-growth.

The concrete equipment segment witnessed a ~57% YoY growth in overallsales. There is a strong uptick in domestic sales for Concrete Mixers by ~66% (YoY) andConcrete Pumps by ~51% (YoY). There is ~29% growth (YoY) in exports which is contributedby Concrete Mixers( ~36% YoY) Concrete Pumps (~25% YoY) and Batching Plants (~25% YoY).

BUSINESS REVIEW

I. INFRASTRUCTURE PROJECT ADVISORY

Infrastructure Project Advisory Division of your Company hasestablished its presence across the infrastructure spectrum as strategic advisors toCentral/State Governments Statutory Bodies PSUs and Urban Local Bodies. Your Companyoffers advisory consultancy and other allied value added services from concept tocommissioning in different domains of Infrastructure – majorly Urban and Industrialprecincts. Some of the projects undertaken are elaborated below:

FEE BASED ACTIVITIES

a) Multilateral Funded Projects/Assignments

Your Company has been successfully handling the prestigious AsianDevelopment Bank (ADB) funded Consulting assignment in the urban infrastructure domain Itsignals the entry of your Company into the multilateral funded projects in India.

Selection of Consulting Services for Project Design andManagement Consultant (PDMC): Project Readiness Financing for Improving Readiness ofIntegrated Urban Planning – funded by ADB. This project envisages development andpreparation of a comprehensive strategy for integrated urban infrastructure development in7 (seven) District Headquarter (DHQ) towns and 13-Urban Local Bodies (ULBs) in Tripuraalong with improved readiness of prioritised projects in the identified urban areas(amongst these identified DHQs and 13-ULBs) covering key economic/ border trade centersleading to increased external/ donor investments in urban infrastructure projects; andfaster & more efficient development of urban infrastructure projects bettermanagement of urban assets and strengthened capacity of urban development agencies todeliver urban services.

b) Smart City Mission Programme

Your Company has been associated with Smart City Mission Programmesince its inception in 2015 and associated in developing Smart City proposals. As of nowyour Company is actively providing support as Project Development and Management Advisorsfor overall project management of Smart City projects including designing developingmanaging and implementing smart city on two outputs viz. Area based development andPan-city solution for Bareilly in Uttar Pradesh which include detailed project reportsalong with floating of tenders under various categories for implementation.

c) Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

AMRUT programme aims at enhancement of 5 (five) basic urbaninfrastructure precincts along with creation of a platform for GIS based mapping of cityinfrastructure. Your Company has been actively supporting this initiative and has beenassociated with the following:

Independent Review and Monitoring Agency (IRMA) forRajasthan Cluster to carry out periodic review and monitoring of the projects;

Formulation of GIS-based Master Plan for 20 (twenty)towns/ cities Tripura with an objective to prepare Master Plan documents for the cities/towns under the Tripura Town & Country Planning Act 1975 along with Detailed MasterPlans for Water Supply and Storm Water Drainage Formulation of GIS based Master Plan for 2(two) clusters (26 cities/towns) in West Bengal.

d) Food Processing

For the Ministry of Food Processing Industries Government of Indiayour Company has been working as Programme Management Agency (PMA) for:

Mega Food Park Scheme to facilitate establishment of MegaFood Parks;

The Scheme for creation of infrastructure for AgroProcessing Clusters under the Central Sector Scheme – Kisan Sampada Yojana;

The Scheme of Creation/ Expansion of Food Processing/Preservative Capacities (CEFPPC) under the Central Sector Scheme – Scheme forAgro-Marine Produce Processing and Development of Agro Clusters (SAMPADA).

Tourism

Your Company has been working in the Tourism Sector forover a decade. Your Company has been successfully providing Project Management ConsultancyServices for ‘Loktak Lake Eco-Tourism Project' in Manipur. This project entailsestablishment of an effective PMC to work in close co-ordination with the Client forpreparation of Detailed Project Report (DPR) RFPs conducting Bid Process ManagementCo-ordination with Ministry of Tourism/ Other funding agencies for securing funds/ grantsand in intermittent design supervision

e) Other Infrastructure Engagements

Your Company continues to work for the following projects in the UrbanInfrastructure domain:

Project Management Consultant (PMC) for implementation of5 (five) specific Sewerage Schemes in Goa;

Independent Engineer & Auditor for Food Corporationof India to oversee/ supervise setting up of Silos on Design Build Finance Own &Operate (DBFOO) basis for storage of food grains at Sangrur in Punjab and Kannauj in UttarPradesh;

Appointment of Third Party Inspection Agency for JalJeevan Mission Project in Kargil District.

f) International Engagements

During the year under review your Company has also worked on fewinternational advisory assignments focused in Africa and Bangladesh.

To enhance the capacities of the line ministries andother individuals or groups related to the development endeavours and with the aim ofinstitutionalizing the PPP capacity building program in the country the PPP AuthorityGovt. of Bangladesh engaged your Company led Consortium for providing ComprehensiveTraining Services on PPP in Bangladesh.

Your Company has been working with the Ministry ofFisheries and Water Resources Republic. of Gambia as Consultant for preparation of adetailed engineering design of Municipal Waste Collection Centres in selected Wards withinthe municipality of Brikama (BAC) and to carry out supervision of the works. The projectis funded by the African Development Bank.

It is being anticipated that the next wave of opportunity in GovernmentAdvisory shall be across 2 (two) major areas (i) more technology and domain specific witheven more strategic support like operational management of smart and specificinfrastructures that are now being created; and (ii) on revamping more social attributesconnected with livelihood missions in Urban spheres owing to the post pandemic era.

Leveraging its core competency coupled with strategic planning forsectors like Urban Infrastructure (specially focus on water supply sanitation and solidwaste management) Tourism Transportation Industrial Park GIS-based Master Plan etc.your Company is working on initiatives for sustainable growth.

ii) FINANCIAL SOLUTIONS ADVIOSRY

Your Company leveraged its financing and operating experience of around30 (thirty) years to provide customized financing advisory solutions. The unique featureis an integrated offering to your Company's customer base encompassing both financialadvisory and capital market services. Additionally your Company has developed a deepunderstanding of the Insolvency and Bankruptcy Code (IBC) process through ourrelationships with various stakeholders involved in the Corporate Insolvency ResolutionProcess (CIRP).

During the year under review your Company undertook variousassignments pertaining to both IBC and normal transaction advisory mandates. The pandemicinduced stress in the economy will continue to offer select opportunities in the future.

INFRASTRUCTURE EQUIPMENT FINANCE - SREI EQUIPMENT FINANCE LIMITED

Srei Equipment Finance Limited (SEFL) a wholly owned subsidiary ofyour Company is registered with the Reserve Bank of India (RBI) as a systemicallyimportant non-deposit taking NBFC and is one of the significant financiers in theConstruction Mining and allied Equipment (CME) sector in India. In addition to CME yourCompany is also diversified into financing of tippers IT and allied equipment medicaland allied equipment farm equipment and other assets. The financial products and servicescomprise loans for new and used equipment and leases.

Infrastructure sector is a key driver for the Indian economy and isresponsible for driving the country towards a holistic development. According to theDepartment for Promotion of Industry and Internal Trade (DPIIT) FDIs in the constructiondevelopment sector (townships housing built up infrastructure and constructiondevelopment projects) and construction (infrastructure) activities stood at US$ 25.93billion and US$ 23.99 billion respectively between April 2000 and December 2020.According to industry experts the logistics sector in India is expected to grow at a CAGRof 10.7 percent between 2020-2024.

The infrastructure sector is considered as the backbone of thecountry's economy as it integrates projects on a large scale and strengthens itscompetitiveness on a global level. It is estimated that India should invest $4.5 trillionin Infrastructure by 2030 to support faster growth. India plans to spend US$ 1.4 trillionon infrastructure during 2019-23 to have a sustainable development of the country. TheNational Infrastructure Pipeline (NIP) which was launched in December 2019 is a part ofthat attempt to invest $4.5 trillion. The NIP pipeline since then has been increased from6835 projects to more than 7600 projects. The Government has suggested investment of Rs50 trillion (US$ 750 billion) for railways infrastructure from 2018-30. India and Japanhave joined hands for infrastructure development in India's Northeast states and arealso setting up an India-Japan Coordination Forum for Development of Northeast toundertake strategic infrastructure projects for the region.

Public Capital Investment in Union Budget of 2022-23

Public investment to continue to pump-prime privateinvestment and demand in 2022-23

Outlay for capital expenditure stepped up sharply by35.4% to Rs7.50 Lac crore in 2022-23 from Rs5.54 Lac crore in the currentyear Outlay in 2022-23 to be 2.9% of GDP

Effective Capital Expenditure' of Central Governmentestimated at Rs 10.68 Lac crore in 2022-23 which is about 4.1% of GDP

Keeping the future in mind the Indian infrastructure equipment sectoris undergoing sweeping changes not just in terms of higher demand but also due to thedigitalization and intelligentization of manufacturing for rolling out highly advancedequipment. In view of the projected growth and government's ‘Make in India'initiative most Original Equipment Manufacturer (OEMs) are upgrading their manufacturingfacilities in an intelligent and innovative way by using automation robotic and advancedtechnologies; producing high-tech machines that meet global quality standards.

The NBFC sector was moving towards a silent recovery when the Covid-19pandemic struck in the last quarter of FY-2020 and stalled its recovery. The consolidatedbalance sheet of NBFCs decelerated in 2019-20 due to stagnant growth in loans and advancessurrounded with a challenging macroeconomic environment weak demand compounded by riskaversion of the banks and FIs to lend to NBFCs liquidity stress and rising borrowingcosts in the wake of the IL&FS default. The initial phase of the lockdown due topandemic was relatively higher on NBFCs since they were unable to function howevertowards the end of H1 the NBFC sector especially that of NBFCs-ND-SI (non-deposit takingsystemically important NBFCs) gained traction due to pickup in loans and advances. Havingsaid that while the asset quality for the overall NBFC sector deteriorated theinfrastructure sector bore the brunt more compared to the other sectors. This is expectedto worsen in the coming months due to the economic damage inflicted by Covid-19 acrosssegments.

While the infrastructure sector continues to enjoy thegovernment's focus in the long term the current fiscal is all about businesscontinuity and survival for all businesses across all sectors including the constructionequipment sector and the NBFC sector.

As the liquidity was constrained in general across the NBFCs there wasa market slowdown due to which there was a decline in disbursements across the sector. Inthe last financial year SEFL focused entirely on collection of its dues and carrying outits Advisory Services. There were no disbursements as RBI had restricted any freshdisbursements.

Existing: In FY-2021 SEFL's total income decreased by 34% to Rs3455crores and your company reported a net loss of Rs7136 crores.

Proposed : In FY-2022 SEFL's total income decreased by 9% to Rs3142crores and your company reported a net loss of Rs2773 crores.

Since the forthcoming year is extremely uncertain due to the secondwave and contemplated third wave of Covid-19 as expected by medical experts SIFL willenhance its focus on recovery of dues from customers advisory services stabilization ofits operations facilitating the on-going debt resolution process and the capital raisingprocess through investor engagement.

RESOURCES

During the year under review your Company has not mobilised anyadditional resources through non-convertible debentures (‘NCDs') ExternalCommercial Borrowings Masala Bonds Subordinate Debt Perpetual Debt Bank Borrowingsetc.

As regards to NCDs issued earlier PDI amounting to Rs320 Crores(Rupees Three Hundred and Twenty Crores only) are unlisted and PDI amounting to Rs 10Crores (Rupees Ten Crores only) are listed on the Stock Exchanges.

Your Company received the consent of the Investors and DebentureTrustees for waiver of interest payable on listed and unlisted PDI for Financial Year2021-22. Accordingly pursuant to the consents received the interest amount on the PDIamounting to Rs330 Crores (Rupees Three Hundred and Thirty Crores only) was not dueand payable by your Company for Financial Year 2021-22.

Upon commencement of the CIRP of your Company interim moratorium /moratorium under Section 14 of the Code was imposed with effect from October 08 2021. Themoratorium on initiation and continuation of legal proceedings including debt enforcementaction ensures a stand-still period during which creditors cannot resort to individualenforcement action. Further the Company has been admitted under the CIRP on October 082021 and under the Code the treatment of creditors under the resolution plan is as perdebts due as on insolvency commencement date and therefore no interest are accrued andpayable after this date. Further any such payment of interest and principal may amount toaccording preferential treatment to a set of creditors to the prejudice of otherstakeholders. In accordance with law all creditors are bound by the process laid outunder the IBC Code. Brickwork Ratings India Pvt. Ltd. has revised the rating assigned toPerpetual Debt Instrument (PDI) of your Company to ‘BWR D (Single D)' on April07 2021.

RISK MANAGEMENT

The risk management strategy of your Company is based on a clearunderstanding of various risks associated with the operating business module adherence towell-laid risk identification and assessment procedures followed with continuousmonitoring.

Risk management continues to be the core area of your Company'soperations especially in an environment which is characterized by increasing uncertaintieslike Covid-19 pandemic changes in operational procedures owing to market alignment etc.

Your Company's risk policies and procedures are derived from theguidance and relevant directives provided from time to time by the Reserve Bank of India(RBI) applicable for designated classifications of Non-Banking Finance Companies (NBFCs)that your Company is included in and other regulatory authorities and continuously benchmarked with industries best practices.

The risk strategy of your Company is enunciated and overseen by theRisk Committee under the direct supervision of the RBI appointed Administrator &Advisory Committee that strives to put in place specific policies frameworks and systemsfor effectively managing the various risks. Policies approved from time to time by theCommittee in consultation with other committees constitute the governing framework forvarious types of risk and business activities undertaken within this policy framework.

The contours of credit risk assessment are defined by a comprehensiveand well-defined consolidated Risk Policy. Your Company has adopted strict measurestowards formulating an effective operational risk management strategy which involvesidentification assessment review control and reporting of key operational risks.Further your Company also has a well-defined approach to identify measure and mitigateinformation technology risks which are based on the globally accepted ISO27001:2013standard.

In addition to managing operational risk prudently ‘Know YourCustomer (KYC) and ‘Anti-Money Laundering (AML) Policy' are in place whichhelps to prevent your Company from being used intentionally or unintentionally by criminalelements for money laundering.

In order to stay ahead in the IT curve a full-fledged BusinessContinuity Plan aligned with the risk management procedures has been kick started withemphasis on modules like Disaster Recovery (DR). Your Company's servers are entirelyhosted on our AWS Cloud Data Centers in Asia Pacific (Mumbai) Region. As part of thepolicy automated AMI (Amazon Machine Image) backups are performed daily weekly andmonthly for all servers (application as well as data) and also all databases are backed updaily. All these backups are stored on Amazon S3 which guarantees 99.99 per centdurability and 99.99 per cent availability by redundantly storing objects on multipledevices across multiple Availability Zones (Data Centres).

HUMAN RESOURCES ACTIVITIES

During the year under review your Company experienced an unprecedentedshift in the way of life and business due to the global pandemic of Covid -19 and had toquickly adapt to the new normal. The major shift was to encourage employees to work fromhome and maintain social distancing norms. To adapt to the new way of working how weinteract and how we experience work life balance was a major challenge. Your Companyfocused on employee engagement as the utmost prominent priority and ensured regularcommunication and organized reach out sessions from the leader's desk. Engagementactivities with employees and also their family members were organised to connect withthem digitally and motivate them during challenging times.

Your Company has continued to focus on leveraging technology anddigitization as a key part of its people strategy driven by HR. Along with engagementyour Company focused on leveraging technology to impart virtual instructor led learningprograms to upskill and reskill employees and building organizational capability. Learningwas also used as a tool to engage with employees across the country strengthening thecollaborative culture.

For your Company all employees form part of an extended family –the Srei Parivar and your Company has continued in its efforts to encourage wellness inmind body and spirit. Your Company focused on Wellness Mental Health Meditation as wellas Financial Wellness sessions for employees to help them reduce anxiety stress and buildresilience.

With restrictions easing your Company cautiously rotated back intoworking at the office and focused on ensuring a safe and hygienic environment. Allemployees were informed on return to work protocols.

The cloud-based Human Resource Management System (HRMS) which waslaunched earlier has been extracted to cover more areas of HR operations.

The employee count of your Company stands at 20 (Twenty) as on March31 2022.

INFORMATION TECHNOLOGY

Business practices around the world have changed during the last twoyears due to the Covid-19 pandemic. Face-to-face meetings have given way to video calls.Homes have become the new offices. Technology is not just a utility anymore but alifeline. Your Company has proactively leveraged its technology wherein a major portion ofthe workforce was benefitted through availing work from home facilities.

Your Company manages a variety of risks that can significantly affectits performance and ability to meet the expectations of its customers shareholdersregulators and other stakeholders. Information Security risk includes the risks arisingfrom unauthorized access use disclosure disruption modification or destruction ofinformation or information systems. In view of the same your Company has conducted ITRisk Assessment to assess its IT-related vulnerabilities and to ensure that propercontrols are in place. Your Company has also developed Key Risk Indicators pertaining toIT Security in order to monitor changes in the levels of risk exposure and mitigate themin time.

The Company's Cyber Security Operations Centre (C-SOC) which wasoperationalized during the previous financial year continues to monitor and improve itssecurity posture while preventing detecting analyzing and responding to cyber securityincidents. Your Company has not yet experienced any material losses relating tocyber-attacks.

Your Company runs regular awareness campaigns to educate its employeesregarding the various aspects of Information Security through various modes like periodicnewsletters awareness sessions and online trainings.

INTERNAL CONTROL AND AUDIT

Your Company's vision mission and core values have laid thefoundation for internal controls. On the administrative controls side your Company has aproper reporting structure oversight committees and rigorous performance appraisal systemto ensure checks and balances. On the financial controls side your Company has in placesegregation of duties and reporting mechanism to deter and detect misstatements infinancial reporting.

Your Company's Internal Control System is commensurate with thenature of its business and the size and complexity of its operations and ensurescompliance with policies and procedures. The Internal Control Systems are being constantlyupdated with new / revised standard operating procedures.

Further in accordance with the latest legislation your Company'sInternal Financial Controls (IFC) have been reviewed and actions have been taken tostrengthen financial reporting and overall risk management procedures. Further anInformation System (IS) Audit of the internal systems and processes is conducted at leastonce in a year to assess operational risks faced by your Company.

Your Company has a dedicated and independent Internal Audit Departmentreporting directly to the Audit Committee of the Board/Advisory Committee through theAdministrator. The purpose scope authority and responsibility of the Internal AuditDepartment are delineated in the Audit Charter approved by the Audit Committee. InternalAudit Department influences and facilitates improvements in the control environment byconstantly evaluating the risk management and internal control systems.

Furthermore the Audit Committee of your Company evaluates and reviewsthe adequacy and effectiveness of the internal control systems and suggests improvements.Significant deviations are brought to the notice of the Audit Committee and correctivemeasures are recommended for implementation. Based on the internal audit report processowners undertake corrective action in their respective areas. All these measures help inmaintaining a healthy internal control environment.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company perceives Corporate Social Responsibility (CSR) as anopportunity to contribute towards uplifting the society at large empowering individualsmaking them self-reliant. The CSR philosophy of your Company is embedded in its commitmentto all stakeholders namely consumers employees environment and society while yourCompany's approach extends both to external community as well as to yourCompany's large and diverse internal employee base & their families. YourCompany's sustainable approach towards practicing humble service to Humanity on asustainable basis has enabled it to continue fulfilling its commitment to be a sociallyresponsible corporate citizen.

Your Company has in place a Corporate Social Responsibility Policy (CSRPolicy) as per the provisions of the Companies Act' 2013 and Companies (CorporateSocial Responsibility Policy) Rules 2014 which inter-alia lays down the guidelines andmechanisms for undertaking socially useful projects for welfare and sustainabledevelopment of the Community at large. The said policy is available at the website of theCompany at https://www.srei.com/sifl_corporate-policies/Corporate_Social_Responsibility_CSR_Policy.pdf

During the financial year 2020-21 your Company had sanctionedcontribution of Rs7815000/- (Rupees Seventy Eight Lacs and Fifteen Thousand only)for disbursement to various entities. However as on March 31 2021 your Company coulddisburse an amount of Rs2495000/- (Rupees Twenty Four Lacs and Ninety FiveThousand only) being 0.66 per cent of the average net profits of last 3 (three) immediatepreceding financial years towards CSR activities pursuant to CSR Policy of your Company.The balance sanctioned amount of Rs5320000/- (Rupees Fifty Three Lacs and TwentyThousand only) could not be disbursed till March 31 2021 due to the establishment ofTrust and Retention Account (TRA) whereby all the business payments of your Company arecontrolled by the Bankers and your Company has no control on the cash flows. Severalrequests were made to the Bankers to disburse the aforesaid amount as committed to theconcerned entities. However the Bankers have not disbursed the entire sanctioned amount.Thereafter the Corporate Insolvency Resolution Process (CIRP) of your Company commencedfrom October 08 2021 pursuant to which your Company was further unable to disburse thebalance sanctioned amount of Rs5320000/- (Rupees Fifty Three Lacs and TwentyThousand only). Furthermore due to the ongoing CIRP your Company did not sanction anyfurther contribution towards CSR activities. Your Company is however committed to remain asocially responsible organization supporting the national aspirations and missions.

Prior to the supersession the Corporate Social Responsibility (CSR)Committee of your Company had been constituted in line with the provisions of Section 135of the Companies Act 2013 ("the Act").

An Annual Report on CSR activities for the Financial Year 2021-22 isset out as an annexure to the Board's Report and forms part of this Annual Report.

SREI WEBSITE

The website of your Company www.srei.com has been developed on the newresponsive technology based platform known as ‘Laravel' ensuring uniformdisplay across all devices like mobile tablet desktop etc. and all the operatingsystems. The website has an inbuilt sophisticated and customized content management systemfor easy change in content. A simple improved navigation system needs a lesser number ofclicks to reach the information available in the different sections of the website. Thecontemporary and smart look of the website ensures a customer centric approach catering tothe requirements of prospective customers investors and employees. The website carries acomprehensive database of information of interest to the investors including the financialresults financial products corporate codes and policies corporate presentations stockexchange intimation and business activities of your Company and the services rendered byyour Company. Some useful features like credit ratings and active and mature NCDsregistrar point NCDs touch points etc. are also available on the website. The customerscan also download essential documents directly from the website.

SUBSIDIARY COMPANIES

The Statement in Form AOC-1 containing the salient features of thefinancial statement of your Company's subsidiaries pursuant to first proviso toSection 129(3) of the Companies Act 2013 (Act) read with Rule 5 of the Companies(Accounts) Rules 2014 forms part of the Annual Report. Further in line with Section129(3) of the Act read with the aforesaid Rules SEBI Listing Regulations 2015 and inaccordance with the Companies (Indian Accounting Standards) Rules 2015 (Ind AS Rules)read with Schedule III to the Companies Act 2013 Consolidated Financial Statementsprepared by your Company includes the financial information of its subsidiary companies.

A Report on the performance and financial position of each of thesubsidiaries included in the Consolidated Financial Statements prepared by your Company asper Rule 8(1) of the Companies (Accounts) Rules 2014 forms part of the annual accountsof each of the subsidiary companies and also forms part of Form AOC-1. The said Report isnot repeated here for the sake of brevity. Members interested in obtaining a copy of theannual accounts of the subsidiaries may write to the Company Secretary at the email idinvestor.relations@srei.com.

In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statements including the consolidated financial statements and relatedinformation of your Company and audited accounts of each of its subsidiaries areavailable on your Company's website www.srei.com.

Highlights of the performance of subsidiaries and their contribution tothe overall performance of your Company during the period under report are given below:

Turnover / Total Income for the Profit After Tax (PAT) for the % Contribution on Turnover / Total % Contribution on PAT for the
Name of the Subsidiary / Associate Financial Year ended 31.03.2022 Financial Year ended 31.03.2022 Income for the Financial Year Financial Year ended
(Rs. in Lacs) (Rs. in Lacs) ended 31.03.2022 31.03.2022
Srei Capital Markets Limited 32.48 (56.69) 0.010 0.004
Trinity Alternative Investment Managers Limited (TAIML) (Formerly Srei Alternative Investment Managers Limited) 1444.88 120.85 0.463 0.025
Hyderabad Information Technology Venture Enterprises Limited (Subsidiary of TAIML) 2.03 (6.00) 0.001 0.001
Cyberabad Trustee Company Private Limited(Subsidiary of TAIML) 0.34 0.18 0.000 0.000
Srei Asset Leasing Limited (Formerly Srei Finance Limited) 4.02 0.000 0.000
Bengal Srei Infrastructure Development Limited 1.72 (12.68) 0.001 0.005
Controlla Electrotech Private Limited 160.34 (26.45) 0.001 0.009
Srei Mutual Fund Trust Private Limited 0.01 (2.88) 0.000 0.001
Srei Mutual Fund Asset Management Private Limited 86.10 78.65 0.003 0.004
Srei Insurance Broking Private Limited 1958.61 200.14 0.620 (0.027)
Srei Equipment Finance Limited (SEFL) 314165 9807 97.880 97.437

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION

There is no such material change and commitment affecting the financialposition of your Company which have occurred between the end of the financial year of yourCompany to which the financial statements relate i.e. March 31 2022 and the date of thisReport.

POLICY FOR DETERMINING ‘MATERIAL' SUBSIDIARIES

As on March 31 2022 Srei Equipment Finance Limited (SEFL) a whollyowned subsidiary of your Company is a listed ‘material' subsidiary of yourCompany with its debt securities being listed on the Stock Exchanges in India. Howeveryour Company does not have any material unlisted subsidiary. Your Company has formulated aPolicy for determining Material Subsidiaries in accordance with SEBI Listing Regulations2015. The said Policy is available on your Company 's website athttps://www.srei.com/sifl-corporate-policies/Polic y_on_deter mining_M ater ial_Subsidiaries.pdf.

KEY MANAGERIAL PERSONNEL (KMPs)

The Reserve Bank of India (RBI) vide Press Release dated October 042021 in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank ofIndia Act 1934 (RBI Act) superseded the Board of Directors of your Company and appointedMr. Rajneesh Sharma Ex- Chief General Manager Bank of Baroda as the Administrator ofyour Company. Further RBI vide its Press Release dated October 04 2021 in exercise ofthe powers conferred under Section 45-IE 5(a) of the RBI Act constituted a 3 (Three)member Advisory Committee to assist the Administrator in discharge of his duties and toadvise the Administrator in the operations of your Company during the CIRP. The members ofthe Advisory Committee are Mr. T T Srinivasaraghavan former Managing Director of SundaramFinance Limited Mr. Farokh N Subedar former Chief Operating Officer and CompanySecretary Tata Sons Limited and Mr. Venkat Nageswar Chalasani former Deputy ManagingDirector State Bank of India (appointed w.e.f. June 23 2022). Mr. R Subramaniakumarformer MD & CEO of Indian Overseas Bank who was originally appointed as a Member ofthe Advisory Committee on October 04 2021 resigned from the Advisory Committee w.e.f.June 22 2022.

The following directors/executives of your Company are whole-time KeyManagerial Personnel (KMPs) in accordance with the provisions of Section 2(51) read withSection 203 of the Companies Act 2013 as on March 31 2022-

Name Designation
Mr. Manoj Kumar Company Secretary & CFO
Mr. Sourendranath Mukhopadhyay (Additional KMP) Deputy Chief Executive Officer
Mr. Vishnu Gopal Agarwal Financial Controller and
(Additional KMP) Chief Compliance Officer

Mr. Manoj Kumar was appointed as the Company Secretary w.e.f. April 012021 and was later appointed as the Chief Financial Officer (CFO) of the Company w.e.f.December 08 2021.

Mr. Rakesh Kumar Bhutoria resigned from the post of Chief ExecutiveOfficer (CEO) of the Company w.e.f. September 15 2021. Further Mr. Sandeep KumarSultania resigned from the post of Chief Financial Officer (CFO) of the Company w.e.f.December 07 2021.

Further Mr. Sourendranath Mukhopadhyay who was appointed as ChiefRisk Officer (CRO) w.e.f. July 01 2020 was re designated and appointed as Deputy ChiefExecutive officer w.e.f. May 21 2021. Furthermore he was appointed as a KMP of yourCompany w.e.f. June 30 2021.

NOMINATION AND REMUNERATION COMMITTEE

Prior to the supersession of the Board of Directors your Company had aduly constituted Nomination and Remuneration Committee in line with the provisions ofSection 178 of the Companies Act 2013. The composition of the committee prior to thesupersession was as follows: the Chairman of the Committee was Mr. Malay Mukherjee(Non-Executive & Independent Director) Dr. (Mrs.) Punita Kumar Sinha (Non-Executive& Independent Director) and Mr. Shyamalendu Chatterjee (Non-Executive &Independent Director). The

Board of Directors of your Company were superseded by RBI on October 42021 as noted above during the year under review the role of the Board and Committeeswas performed by the Administrator supported by the Advisory Committee.

Prior to the supersession the Nomination and Remuneration Committee ofyour Company held 4 (Four) meetings during the year 2021-22 on April 01 2021 May132021 June 30 2021 and August 14 2021. The Committee had formulated the Nominationand Remuneration Policy which broadly lays down the various principles of remunerationbeing support for strategic objectives transparency internal & external equityflexibility performance-driven remuneration affordability and sustainability and coversthe procedure for selection appointment and compensation structure of the Board membersKey Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company.The link of the policy is https://www.srei.com/sifl-corporate-policies/Nomination_and_Remuneration_Policy.pdf

However on March 16 2022 the Nomination and Remuneration committeewas re-constituted and the following members were inducted in the Committee: Mr. RajneeshSharma (Administrator) Mr. Sourendranath Mukhopadhyay (Deputy Chief Executive Officer)Mr. Jaidip Chatterjee (Head – Human Resources) and Mr. Manoj Kumar (CompanySecretary). Mr. Arunabha Acharya acts as the Secretary of the Committee. The committee wasfurther re-constituted on June 29 2022 due to the resignation of Mr SourendranathMukhopadhyay as a member of the Committee.

NOMINATION AND REMUNERATION POLICY & PERFORMANCE EVALUATION

Prior to supersession of the Board of Directors of your Company by theRBI on October 04 2021 your Company had a combination of Executive and Non-ExecutiveDirectors as well as Independent Directors including a Woman Independent Director on itsBoard of Directors.

The Nomination and Remuneration Policy of your Company has beenformulated as per the provisions of Section 178 of Companies Act 2013 and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

The said policy is available on the website of your Company athttps://www.srei.com/sifl-corporate-policies/Nomination_and_ Remuneration_Policy.pdf.

The Board of Directors of your Company was superseded by RBI on October04 2021 as noted above. Prior to the supersession of the Board of Directors 1 (one)meeting of the Independent Directors was held during the financial year under review onJune 19 2021. No evaluation of performance of Directors Board or the Committees thereofwas carried out till the appointment of Administrator by RBI.

The said policy is available on the website of your Company athttps://www.srei.com/sifl-corporate-policies/Familiarisation_Programme_for_Independent_Directors.pdf

Since your Company is undergoing Corporate Insolvency ResolutionProcess under the IBC Code the role of the Board and Committees is being fulfilled by theAdministrator supported by the Advisory Committee.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

Your Company has formulated a codified Whistle Blower Policyincorporating the provisions relating to Vigil Mechanism in terms of Section 177 of theCompanies Act 2013 and Regulation 22 of SEBI Listing Regulations 2015 in order toencourage Directors and Employees of your Company to escalate to the level of the AuditCommittee any issue of concerns impacting and compromising with the interest of yourCompany and its stakeholders in any way. Your Company is committed to adhere to highestpossible standards of ethical moral and legal business conduct and to open communicationand to provide necessary safeguards for protection of employees from reprisals orvictimisation for whistle blowing in good faith. The said Policy was last revised onNovember 09 2020 and is available on your Company's website athttps://www.srei.com/sifl-corporate-policies/Whistle_Blower_Policy.pdf

A Whistle blower committee is in place that reviews all matters andguides the management to implement the relevant guidelines in true spirit and keep avigil.

Further no complaints were reported under the Vigil Mechanism duringthe year.

POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT

Your Company is committed to provide and promote a safe healthy andcongenial atmosphere irrespective of gender caste creed or social class of theemployees. Your Company in its endeavour to provide a safe and healthy work environmentfor all its employees has developed a policy to ensure zero tolerance towards verbalphysical psychological conduct of a sexual nature by any employee or stakeholder thatdirectly or indirectly harasses disrupts or interferes with another employee's workperformance or creates an intimidating offensive or hostile environment such that eachemployee can realize his / her maximum potential.

Your Company has put in place a ‘Policy on Prevention of SexualHarassment' as per The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Policy is meant to sensitize the employees abouttheir fundamental right to have safe and healthy environment at workplace. As per thePolicy any employee may report his / her complaint to the Internal Complaints Committeeconstituted for this purpose. The said Policy is available on your Company's websiteathttps://www.srei.com/sifl-corporate-policies/Policy_on_Prevention_of_Sexual_Harassment.pdf.

Your Company affirms that during the year under review adequate accesswas provided to any complainant who wished to register a complaint under the Policy andthat your Company has complied with the provisions relating to the constitution ofInternal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

During the year your Company has not received any complaint on sexualharassment from any of the employees of your Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Your Company is exempted from the applicability of the provisions ofSection 186 of the Companies Act 2013 read with Rule 11 of the Companies (Meetings ofBoard and its Powers) Rules 2014 as your Company is engaged in the business of financingof companies or of providing infrastructural facilities.

Details of the investments made by your Company are given in Note No. 5in the Notes to accounts forming part of the audited (standalone) financial statements forthe financial year ended March 31 2022.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the CompaniesAct 2013 the Annual Return of your Company is available at https://www.srei.com/srei-annual-return.

PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions of your Company are entered in theordinary course of business and are on arm's length basis and are in compliance withthe applicable provisions of the Companies Act 2013 and SEBI Listing Regulations 2015.There are no materially significant transactions entered into by your Company withPromoters Directors or Key Managerial Personnel

(KMPs) which have potential conflict with the interest of your Companyat large. Your Company has not entered into any material related party transactions withany of its related parties during the Financial Year 2021-22. Members may refer to thenotes to the financial statements for details of related party transactions.

Since all related party transactions entered into by your Company werein the ordinary course of business and were on an arm's length basis Form AOC-2 isnot applicable to your Company. The related party transactions are entered into based onconsiderations of various business exigencies such as synergy in operations sectoralspecialisation and your Company's long-term strategy for sectoral investmentsoptimisation of market share profitability legal requirements liquidity and capitalresources of subsidiaries

In terms of Section 177 of the Companies Act 2013 and prior to thesupersession of the Board of Directors and subsequent dissolution of all Board Committeesyour Company obtained approval of the Audit Committee for entering into any transactionwith related parties as applicable. A statement of all related party transactions waspresented before the Audit Committee on a quarterly basis specifying the nature valueand terms and conditions of the transactions. Further post the supersession of the Boardof Directors by RBI vide its Press Release dated October 04 2021 and appointment of theAdministrator of your Company under Section 45-IE (2) of the RBI Act your Companyobtained approval of the Administrator for entering into any transaction with relatedparties.

As RBI superseded the erstwhile Board of Directors of your Companyowing to lack of Governance amongst various other reasons the present managementemphasizes good governance practices as paramount for your Company. For the financial yearended March 31 2022 the details of the related party transactions entered into by yourCompany in the ordinary course of business at arm's length basis are mentioned in thenotes to the accounts forming part of the audited (standalone) financial statements.

PARTICULARS OF EMPLOYEES

The Board of Directors of your Company has been superseded by theReserve Bank of India vide its Press Release dated October 04 2021 as noted above. Theratio of the remuneration of each erstwhile director holding position of director duringthe year under review to the median employees' remuneration and other details interms of Section 197(12) of the Companies Act 2013 read with Rule 5(2) & (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended bythe Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 are set out as an annexure to the Board's Report and forms a part of thisAnnual Report.

The statement containing particulars of employees as required underSection 197(12) of the Companies Act 2013 read with Rule 5(2) and Rule 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedby the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 forms part of this Report.

However as per first proviso to Section 136(1) of the Act and secondproviso of Rule 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Report and Financial Statements are being sent to the Membersof your Company excluding the said statement. Any Member interested in obtaining a copy ofthe said statement may write to the Secretarial Department at the Registered Office ofyour Company.

PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTFLOW

Your Company has no activity relating to Conservation of Energy andTechnology Absorption as stipulated in Rule 8(3) of Companies (Accounts) Rules 2014.However your Company uses information technology extensively in its operations and alsocontinues its endeavour to improve energy conservation and utilisation safety andenvironment.

During the year under review the total foreign exchange earnings andexpenditure of your Company was RsNil and Rs598.57 respectively (previousyear Nil and Rs494.28 Lacs respectively).

CREDIT RATINGS

Credit rating agencies have taken cognizance of various factors mainlycontinuing delays in debt servicing significant losses incurred cash flow mismatch anderosion of net worth of the Company etc. and hence downgraded credit ratings of variousloan facilities / financial instruments of your Company to the ‘default grade'since March / April 2021.

Subsequently the Board of Directors of your Company and Srei EquipmentFinance Limited Wholly owned Subsidiary Company was superseded by the Reserve Bank ofIndia (RBI) on October 04 2021 and it is presently being managed by the Administratorappointed by the RBI. Further as stated before your Company had been admitted underCorporate Insolvency Resolution Process (CIRP) by the Hon'ble National Company LawTribunal (NCLT) vide its order dated October 08 2021.

DETAILS OF TRANSFER OF UNCLAIMED AMOUNTS AND SHARES TO THE INVESTOREDUCATION AND PROTECTION FUND (IEPF)

The details of unclaimed amounts and shares transferred to the InvestorEducation and Protection Fund (IEPF) during the Financial Year 2021-22 have been mentionedin the Corporate Governance Report annexed to the Board Report.

As per section 124(5) of the Companies Act 2013 a company is requiredto transfer the amount lying in the unpaid dividend account for 7 years to the InvestorEducation Protection Fund ("IEPF"). However pursuant to the Order dated October08 2021 passed by the Hon'ble NCLT Kolkata CIRP has been initiated for yourCompany and the moratorium has commenced under Section 14 of the Code read with Rule5(b)(i) of FSP Rules effective from October 08 2021. Prior to the date of commencement ofmoratorium/CIRP i.e. October 08 2021 (CIRP commencement date) an amount of Rs18574/-(RupeesEighteen Thousand Five Hundred and Seventy Four) was transferable by Srei EquipmentFinance Limited (SEFL) wholly owned subsidiary of your Company to IEPF in terms ofsection 124 (5) of the Companies Act 2013 pertaining to the interest on application moneydue for refund of 2014-15 of SEFL. However the same has not been transferred post October08 2021 as your Company and SEFL Wholly Owned Subsidiary are under IBC. The IEPFAuthority has been requested to submit a proof of claim for the amount required to betransferred to IEPF as per IBC Rules.

Post commencement of moratorium/CIRP an amount of Rs31633/-(Rupees Thirty One Thousand Six Hundred and Thirty Three) is transferable by SreiEquipment Finance Limited wholly owned subsidiary of your Company to IEPF in terms ofsection 124 (5) of the Companies Act 2013 pertaining to the interest on application moneydue for refund of 2014-15 of your Company.

Further your Company is of the opinion that as per the provisions ofSection 238 of the Code provisions of IBC prevail over any other law to the extent of anyinconsistency. Therefore if any amounts are transferred to IEPF post insolvencycommencement date (i.e. after October 08 2021) or any time during the moratorium periodit would violate the provisions of Section 14 of the Code read with Rule 5(b)(i) of FSPRules. Accordingly the Company has written to IEPF authorities and requested guidance inthis regard to compliance with section 125(2)(c) of the Companies Act 2013 and awaittheir response. The amount to be transferred prior to the commencement of the moratoriumhas been duly transferred in accordance to section 125 of the Companies Act 2013.

AUDIT COMMITTEE

Prior to the supersession of the Board of Directors of your Company bythe RBI on October 04 2021the Audit Committee of your Company has been constituted inline with the provisions of Section 177 of the Companies Act 2013 read with Regulation 18of SEBI Listing Regulations 2015.

The Composition of the Audit Committee was as follows:

The Chairman of the Audit Committee was Mr. Malay Mukherjee(Non-Executive & Independent Director) Dr. (Mrs) Tamali Sengupta (Non-Executive &Independent Director) Member and Dr. (Mrs) Deepali Pant Rajeev Joshi (Non-Executive &Independent Director) Member of the Committee. The Company Secretary of your Company actsas the Secretary to the Audit Committee

2 (Two) meetings of the Audit Committee were held during the year2021-22 on June 30 2021 and August 14 2021.

During the year under review and prior to the supersession of theBoard there were no such instances wherein the Board had not accepted any recommendationof the Audit Committee.

AUDITORS

At the 35th AGM held on September 19 2020 D. K. Chhajer & Co.Chartered Accountants having Firm Registration No. 304138E allotted by The Institute ofChartered Accountants of India (ICAI) were appointed as Statutory Auditors of yourCompany to hold office for a term of 5 (Five) consecutive years from the conclusion of35th AGM till the conclusion of the 40th AGM of your Company. The Statutory Auditors holda valid peer review certificate as prescribed under Regulation 33(1)(d) of SEBI ListingRegulations 2015.

AUDITORS REPORT

The Administrator (assisted by the Advisory Committee) at the AdvisoryCommittee Meeting held on May 23 2022 and adjourned to May 27 2022 have inter-aliaconsidered and taken on record the Ind AS Audited Financial Results (Standalone &Consolidated) of your Company for Financial Year ended March 31 2022 as per Regulation33 and other applicable regulations of the SEBI Listing Regulations and in compliance withthe Ind AS as per the provisions of the Companies (Indian Accounting Standards) Rules2015.

The Report of the Statutory Auditors to the members for the financialyear under review contains Disclaimer of Opinion and the management's response to theBasis for Disclaimer of Opinion contained in the Statutory Auditors' Report(hereinafter referred to as "the Basis for Disclaimer of Opinion") are asfollows:

For Standalone Financials:

(a) Note No. 1.2 1.3(i) and 59 to the Statement which explains thatthe Administrator has initiated audits/reviews relating to the processes and compliancesof the Company and has also appointed professionals for conducting transaction audit asper Section 43 45 50 and 66 of the Code.

Hence the Statement is subject to outcome of such audits/reviews.Pending the outcome of the Transaction Audit we are unable to comment on the impact ifany of the same on the Statement. Note 59 explains that latest valuations from independentvaluers in respect of assets/collaterals held as securities is in progress. Hence pendingcompletion of the process we are unable to comment on the impact if any of the same onthe Statement. Further Note also explains that since the Administrator has taken charge ofthe affairs of the Company on October 4 2021 the Administrator is not liable orresponsible for any actions and regarding the information pertaining to the period priorto October 4 2021 and has relied upon the explanations clarifications certificationsrepresentations and statements made by the existing management of the Company who werealso part of the Company prior to the appointment of the Administrator.

(b) Note No. 51 to the Statement which explains that during thefinancial year 2019-20 the Company accounted for the slump exchange transaction andconsequently recognized the relevant assets and liabilities in its books of accountpursuant to the Business Transfer Agreement (‘BTA') with its subsidiary SreiEquipment Finance Limited (SEFL) with effect from October 1 2019 subject to necessaryapprovals.

The superseded Board of Directors and erstwhile management of theCompany obtained expert legal and accounting opinions in relation to the accounting of BTAwhich confirmed that the accounting treatment so given is in accordance with the relevantInd AS and the underlying guidance and framework. The Note further explains that duringthe financial year 2020-21 SEFL had filed two separate applications under Section 230 ofAct before the Hon'ble NCLT proposing Schemes of Arrangement (the Schemes) with allits secured and unsecured lenders. Since applications/appeals in connection with theScheme were pending before NCLT/NCLAT the superseded Board of Directors and erstwhilemanagement had maintained status quo on the Scheme including accounting of BTA. Both theschemes of arrangement were rejected by majority of the creditors and an application ofwithdrawal was filed by the Administrator in this matter which has been allowed by theTribunal vide order dated February 11 2022.

As stated in said note the Company is in the process of consolidatedresolution of SEFL and SIFL and hence no further action is being contemplated regardingestablishing the validity of BTA or otherwise consequent upon the withdrawal of Schemes.Accordingly the status quo regarding BTA as it existed on the date of commencement ofCIRP has been maintained. In view of the uncertainties that exist in the matter of BTAwe are unable to comment on the accounting of BTA as aforesaid done by the Company andaccordingly on the impact of the same if any on the Statement.

(c) Note No. 53 to the Statement which explains that the Administratorhas invited the financial/operational/other creditors to file their respective claims andthat the admission of such claims is in process. Further the note explains that theeffect in respect of the claims as on October 8 2021 admitted by the Administrator tillMay 4 2022 is in the process of being verified and updated from time to time as and whenthe claims are admitted and accordingly the figures of claims admitted and accounted inthe books of accounts might undergo changes during CIRP. Hence adjustments if anyarising out of the claim verification and submission process will be given effect insubsequent periods. We are unable to comment on the impact of the same if any on theStatement.

(d) Note No. 54 (b) to the Statement which explains the reasons owingto which the Company was not able to comply with the requirements of Section 135 of theAct in relation to depositing unspent amount related to Corporate Social Responsibility(CSR). As stated in the said note the Company has written to the Ministry of CorporateAffairs seeking exemption from the obligations of the Company under portions of Section135(5) and Section 135(7) of the Act. We are unable to comment on the impact of the sameor any other consequences arising out of such non-compliance if any on the Statement.

(e) Note No. 56 to the Statement which explains that the Company asper the specific directions from Reserve Bank of India (RBI) in relation to certainborrowers referred to as ‘probable connected parties/related parties' wasadvised to re-assess and re-evaluate the relationship with the said borrowers to assesswhether they are related parties to the

Company or to SEFL and also whether transaction with these connectedparties were in line with arm's length principles. However the said process was notconcluded and meanwhile the Company and SEFL have gone into CIRP. As stated in the saidNote the Administrator is not in a position to comment on the views adopted by theerstwhile management in relation to the RBI's direction since these pertain to theperiod prior to the Administrator's appointment. As stated in paragraph (a) abovethe Administrator has initiated a transaction audit/review relating to the process andcompliance of the Company and has also appointed professionals for conducting transactionaudit as per section 43 45 50 and 66 of the Code which is in process. We are unable tocomment on the impact of the same if any on the Statement.

(f) We have been informed that certain information including theminutes of meetings of the Committee of Creditors Advisory Committee and Joint Lendersare confidential in nature and cannot be shared with anyone other than the Committee ofCreditors and Hon'ble NCLT.

Accordingly we are unable to comment on the possible financial effectson the Statement including on presentation and disclosures if any that may have arisenif we had been provided access to that information.

(g) In view of the possible effects of the matters described inparagraph 5(a) to 5(f) above. we are also unable to comment on the Company'scompliance on various regulatory ratios/limits and consequential implications includingdisclosures if any.

Material Uncertainty Related to Going Concern

Note No. 55 to the Statement which states that the Company has beenadmitted to CIRP and that the Company has reported operational loss during the year endedMarch 31 2022 and earlier years as well. As a result the Company's net worth hasfully eroded and it has not been able to comply with various regulatory ratios/limits etc.All this have impacted the Company's ability to continue its operations in normalcourse in future. These events or conditions along with other matters as set forth in theaforesaid Note indicate that there is a material uncertainty which casts significantdoubt about the Company's ability to continue as a ‘going concern' inforeseeable future. However for the reasons stated in the said note the Company hasconsidered it appropriate to prepare the Statement on a going concern basis.

For Consolidated Financials

(a) Note No. 1(a) and 1.1 to the Consolidated Financial Statementswhich explains that the Administrator has initiated audits/reviews relating to theprocesses and compliances of SIFL and its subsidiary Srei Equipment Finance Limited("hereinafter referred to as "SEFL") and has appointed professionals forconducting transaction audit as per Sections 43 45 50 and 66 of the Insolvency andBankruptcy Code (IBC) 2016 (‘the Code'). Hence the Consolidated FinancialStatements are subject to outcome of such audits/reviews. Pending the outcome of theTransaction Audit we are unable to comment on the impact if any of the same on theConsolidated Financial Statements. Further the Notes also explain that since theAdministrator has taken charge of the affairs of SIFL and SEFL on 4 October 2021 theAdministrator is not liable or responsible for any actions and regarding the informationpertaining to the period prior to 4 October 2021 and has relied upon the explanationsclarifications certifications representations and statements made by the existingofficials of SIFL and SEFL who were also part of the respective Companies prior to theappointment of the Administrator.

(b) Note No 54(b) to the Consolidated Financial Statements whichexplains that the latest valuations from independent valuers as a part of CorporateInsolvency Resolution Process ("CIRP") in respect of assets / collaterals heldas securities and considered for loan loss provision is in progress.

Further the Note also explains that the Consolidated Financial

Statements disclosures categorization and classification of assetsare subject to the outcome of such valuation process. Hence pending completion of theprocess we are unable to comment on the impact of the same if any on the ConsolidatedFinancial Statements.

c) Note No.55 to the Consolidated Financial Statements which explainsthat during the financial year 2019-20 the Holding Company and SEFL accounted for theslump exchange transaction and consequently recognized and derecognised relevant assetsand liabilities in the books of account pursuant to the Business Transfer Agreement(‘BTA') with effect from October 1 2019 subject to necessary approvals. Thesuperseded Board of Directors and erstwhile management of the Holding Company obtainedexpert legal and accounting opinions in relation to the accounting of BTA which confirmedthat the accounting treatment so given is in accordance with the relevant Ind AS and theunderlying guidance and framework. The Note further explains that during the financialyear 2020-2021 SEFL had filed two separate applications under Section 230 of theCompanies Act 2013 ("the Act") before the Hon'ble NCLT proposing Schemesof Arrangement (the Schemes) with all its secured and unsecured lenders. Sinceapplications/appeals in connection with the Schemes were pending before NCLT/NCLAT thesuperseded Board of Directors and erstwhile management had maintained status quo on theScheme including accounting of BTA. Both the Schemes were rejected by majority of thecreditors and an application of withdrawal was filed by the Administrator in this matterwhich has been allowed by the Tribunal vide order dated 11 February 2022.

As stated in the said Note the Administrator is in the process offiling consolidated resolution of SEFL and SIFL and hence no further action is beingcontemplated regarding establishing the validity of BTA or otherwise consequent upon thewithdrawal of Schemes. Accordingly the status quo regarding BTA as it existed on thedate of commencement of CIRP has been maintained. In view of the uncertainties that existin the matter of BTA we are unable to comment on the accounting of BTA as aforesaiddone by the Holding Company and SEFL and accordingly on the impact of the same If any onthe Consolidated Financial Statements.

(d) Note No.57 to the Consolidated Financial Statements which explainsthat the Administrator has invited the financial/ operational/other creditors to filetheir respective claims and that the admission of such claims is in process. Further thenote explains that the effect in respect of the claims as on 8 October 2021 admitted bythe Administrator till 4 May 2022 is in the process of being verified and updated fromtime to time as and when the claims are admitted and that the creditors can file theirclaims during CIRP. Accordingly the figures of claims admitted and accounted in the booksof account might undergo changes during CIRP. Hence adjustments if any arising out ofthe claim verification and submission process will be given effect in subsequent periods.We are unable to comment on the impact of the same if any on the Consolidated FinancialStatements..

Note No.57 to the Consolidated Financial Statements also explains thatSEFL as per the Code on the date of commencement of CIRP i.e. 8 October 2021 hasconverted foreign currency debt into INR and accordingly has not translated its foreigncurrency exposure as on 31 March 2022 as per requirements of Ind AS 21. We are unable tocomment on the impact of the same if any on the Consolidated Financial Statements..

(e) Note No. 58 to the Consolidated Financial Statement which statesthat SEFL has not provided for Rs199970 Lacs (approx.)for the year ended 31March 2022 pursuant to its admission under the CIRP in respect of its obligation forinterest on all the borrowings since insolvency commencement date i.e. 8 October 2021.Had SEFL provided its obligation for interest as aforesaid its profit before tax for theyear ended 31 March 2022 would have resulted in a loss before tax of

Rs 447380 Lacs for the year ended 31 March 2022.

(f) Note No. 59 to the Consolidated Financial Statements which explainsthe reasons owing to which SEFL has not been able to comply with guidelines of RBI inrelation to mandatory hedging of exposure in External Commercial Borrowings amounting to Rs27272Lacs as per contractual terms as at 31 March 2022. As stated in the said note SEFL hasreported the above fact to RBI and reply of the same is awaited from RBI. We are unable tocomment on the impact of the same or other consequences arising out of suchnon-compliance if any on the Consolidated Financial Statements.

(g) Note No. 62 to the Consolidated Financial Statements which explainsthat SIFL and SEFL as per the specific directions from Reserve Bank of India (RBI) inrelation to certain borrowers referred to as ‘probable connected parties/relatedparties' was advised to re-assess and reevaluate the relationship with the saidborrowers to assess whether they are related parties to SIFL or to SEFL and also whethertransactions with these connected parties were in line with arm's length principles.

The erstwhile management obtained legal and accounting views on thematter which stated that the said transactions were not related party transactions. Inview of the RBI's directions the erstwhile management of SEFL in line witharm's length principles was in the process of re-assessing and re-negotiating termsand conditions with such borrowers and all other borrowers who have been granted loanswith moratorium period and at interest rate which is linked with the cash flows of theproject. However the said process was not concluded and meanwhile SIFL and SEFL had goneinto CIRP. As stated in the said Note the Administrator is not in a position to commenton the views adopted by the erstwhile management in relation to the RBI's directionsince these pertain to the period prior to the Administrator's appointment. As statedin paragraph (a) above the Administrator has appointed professionals and has initiated atransaction audit/review relating to the process and compliance and has also appointedprofessionals for conducting transaction audit as per sections 43 45 50 and 66 of theCode which is in process. We are unable to comment on the impact of the same if any onthe Consolidated Financial Statements.

(h) Note No. 63 to the Consolidated Financial Statements which explainsthat based on the directions of RBI SEFL has made provisions amounting to Rs9807Lacs and Rs4991 Lacs in respect of direct tax cases and indirect tax casesrespectively where SEFL was under various stages of appeal with the relevant taxauthorities. However SEFL has not assessed whether the outflow of resource embodyingeconomic benefits is probable or not as per the requirements of Ind AS 37-‘Provisions Contingent Liabilities and Contingent Assets'. Hence in absence ofsuch assessment we are unable to comment on any non-compliance with Ind AS and thecorresponding impact if any of the same on the Consolidated Financial Statements.

(i) Note No. 64 to the Consolidated Financial Statements which explainsthe reasons owing to which SIFL and SEFL were not able to comply with the requirements ofSection 135 of the Act in relation to depositing unspent amount of CSR. As stated in thesaid note SIFL and SEFL have written to the Ministry of Corporate Affairs("MCA") seeking exemption from the obligations of the Companies under portionsof Section 135(5) and Section 135(7) of the Act. We are unable to comment on the impact ofthe same or any other consequences arising out of such non-compliance if any on theConsolidated Financial Statements.

(j) Note No.66 to the Consolidated Financial Statements which statesthat SEFL has not been able to maintain the asset cover as stated in the informationmemorandum/ debenture trust deeds etc. which is sufficient to discharge the principalamount at all times for the secured non-convertible debentures issued by SEFL. Further asstated in the said Note and paragraph (b) above latest valuations from independentvaluers in respect of assets is in progress and accordingly the percentage of assetcover given in Note No. 66 to the Consolidated Financial Statements is subject to theoutcome of such valuation process. Hence we are unable to comment on Note No. 66 as givenin the Consolidated Financial Statements.

(k) Note No. 67 to the Consolidated Financial Statements which explainsthat in relation to certain borrowings (including secured borrowings and NCDs) acquired bySEFL from SIFL pursuant to BTA as stated in Note No. 55 to the Consolidated FinancialStatements charges created on such borrowings are yet to be transferred in the name ofSEFL and are still appearing in the name of the Holding Company for the reasons stated inthe said Note. We are unable to comment on the impact of the same or any otherconsequences arising out of it on the Consolidated Financial Statements.

(l) Note No. 68 to the Consolidated Financial Statements which explainsthe reasons owing to which the SEFL was not able to comply with the requirements ofSection 125 of the Act in relation to transfer of certain amounts lying unpaid for 07years to Investor Education and Protection Fund (‘lEPF'). As stated in the saidnote SEFL has written to IEPF authorities and requested guidance in the matter. We areunable to comment on the impact of the same or other consequences arising out of suchnon-compliance if any on the Consolidated Financial Statements.

(m) SEFL's auditors had carried out independent balanceconfirmation process with respect to various parties/lenders responses for which arepending to be received as on the date of signing this report. Also the project progressreport for the year ended 31 March 2022 from various parties is yet to be received.Hence we are unable to comment on such balances and status and impact of the same on theStatement if any.

(n) We have been informed that certain information including theminutes ?of meetings of the Committee of Creditors Advisory Committee and Joint Lendersare confidential in nature and cannot be shared with anyone other than the Committee ofCreditors and Hon'ble NCLT.

Accordingly we are unable to comment on the possible financial effectson the Statement including on presentation and disclosures if any that may have arisenif we had been provided access to that information.

(o) In the view of the possible effects of the matters described inparagraph 5(a) to 5(p) above we are also unable to comment on the SEFL's complianceof the covenants in respect of all borrowings (including creation of charges) andconsequential implications including disclosures etc. if any.

(p) In view of the possible effects of the matters described inparagraph 5(a) to 5(o) above we are also unable to comment on the Holding Company'sand SEFL's compliance on various regulatory ratios/ limits and consequentialimplications including disclosures If any.

(q) Response to "Material Uncertainty Related to GoingConcern" of the Basis for Disclaimer of Opinion: Your Company had reported lossesduring the year ended 31 March 2022 and earlier year/periods as well. Hence the networth of the Company has fully eroded.

Note No. 61 to the Consolidated Financial Statements which states thatSIFL and SEFL has been admitted to CIRP and also indicates the factors that have furtherresulted into net loss during the year ended 31 March 2022 and earlier year as well. As aresult the Group's net worth has fully eroded and it has not been able to complywith various regulatory ratios/limits etc. All this have impacted the Group's abilityto continue its operations in normal course in future. These events or conditions alongwith other matters as set forth in the aforesaid Note indicate that there is a materialuncertainty which casts significant doubt about the Group's ability to continue as a‘Going Concern' in foreseeable future. However for the reasons stated in thesaid note SIFL and SEFL have considered it appropriate to prepare their ConsolidatedFinancial Statements on a going concern basis.

SECRETARIAL AUDIT REPORT

Your Company appointed Mr. Dhirendra Kumar Dhiraj Company Secretary inpractice having Membership No. A52509 Certificate of Practice (COP) No. 19266 as theSecretarial Auditor of your Company for Financial Year 2021-22 in place of Mr. SidharthBaid to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

The Secretarial Audit Report confirms that your Company has compliedinter alia with all the applicable provisions of the Companies Act 2013 and the Rulesmade thereunder the Securities Contracts (Regulation) Act 1956 and Rules madethereunder the Depositories Act 1996 and the Regulations and Bye-laws framed thereunderthe Foreign Exchange Management Act 1999 and the rules and regulations made thereunder tothe extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 Secretarial Standards issued by The Institute of Company Secretaries of India{Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and GeneralMeetings (SS-2)} all the Regulations of the Securities and Exchange Board of India (SEBI)as applicable to the Company including the SEBI (Substantial Acquisition of Shares andTakeovers) Regulations 2011 the SEBI (Prohibition of Insider Trading) Regulations 2015the SEBI (Issue and Listing of Debt Securities) Regulations 2008 the SEBI (Registrars toan Issue and Share Transfer Agents) Regulations 1993 and the Reserve Bank of IndiaDirections Guidelines and Circulars applicable to Systemically Important Non-DepositAccepting or Holding NBFCs (NBFC –ND – SI).

There have been certain observations by the Secretarial Auditor intheir report for the review period with respect to compliance under Companies Act 2013and SEBI and RBI regulations. The management's responses are stated in notes toaccounts for the F.Y. 2021-22. Further the other observations in the Audit Report arearising out of supersession of Board and initiation of CIRP.

CORPORATE POLICIES

The details of Policies adopted by your Company along with salientfeatures and summary of key changes if any during the year are provided as annexure tothis Report and forms part of this Annual Report.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Schedule V of SEBI ListingRegulations 2015 a separate section on Corporate Governance and a Certificate from aPracticing Company Secretary confirming compliance with the requirements of CorporateGovernance forms part of this Annual Report.

The Corporate Governance Certificate (CGC) contains certainobservations qualifications and remarks. The responses to all the aforesaid observationsqualifications and remarks are given herein below:

The Company to the extent applicable has complied with the conditionsof Corporate Governance as stipulated in Regulations 17 to 27 clauses (b) to (i) ofsub-regulation (2) of Regulation 46 and Para C D and E of Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 except given below:

a) The Company was delayed in the filing of Standalone and ConsolidatedFinancial Results and related disclosure of the Company for the Quarter and Half-Yearended on September 30 2021 in accordance to regulation 33 of SEBI Listing Obligations andDisclosure Requirements 2015.

b) As per Regulation 17(8) of SEBI LODR Regulations 2015 the ChiefExecutive Officer (CEO) and the Chief Financial Officer (CFO) shall provide the compliancecertificate to the Board of Directors as specified in Part B of Schedule II in LODRRegulations 2015 whereas the same has been provided by Company Secretary and ChiefCompliance Officer.

c) As per Para D of Schedule V a declaration signed by the ChiefExecutive Officer stating that the members of Board of Directors and Senior ManagementPersonnel have affirmed compliance with the code of conduct of Board of Directors andSenior Management whereas the same has been signed by Company Secretary and ChiefCompliance Officer.

DIRECTORS

As mentioned earlier in this Report Mr. Rajneesh Sharma was appointedas the Administrator of your Company since October 04 2021 and the management of yourCompany vests in him. He is assisted by a three-member Advisory Committee to discharge hisduties and its current Members are Mr. T T Srinivasaraghavan former Managing Director ofSundaram Finance Limited Mr. Farokh N Subedar former Chief Operating Officer and CompanySecretary Tata Sons Limited and Mr. Venkat Nageswar Chalasani former Deputy ManagingDirector State Bank of India.

Accordingly the disclosures pertaining to the Board of DirectorsBoard Meetings relationship between Directors inter-se shares and ConvertibleInstruments held by Non-Executive Directors separate meeting of Independent Directorsfamiliarization programme for Independent Directors Board qualifications and attributesand other disclosures pertaining to the Board of Directors were not applicable to yourCompany as on March 31 2022.

However before supersession of the Board of Directors of your Companythe constitution of the Board was as follows:

Mr. Hemant Kanoria (Chairman – Executive) Mr. Sunil Kanoria (ViceChairman – Non-Executive) Mr. Shyamalendu Chatterjee (Non-Executive andIndependent) Dr. Punita Kumar (Non-Executive and Independent) Mr. Malay Mukherjee(Non-Executive and Independent) Dr. Tamali Sengupta (Non-Executive and Independent) andDr. (Mrs.) Deepali Pant Rajeev Joshi (Non-Executive and Independent).

In accordance with the provisions of Section 152 of the Companies Act2013 (Act) and the relevant Rules and your Company's Articles of Association notless than two-thirds of the total number of Directors of a public company shall be personswhose period of office is liable to determination by retirement of Directors by rotationand one-third of such of the Directors for the time being as are liable to retire byrotation. However all such directors who were liable to the rotational retirement weresuperseded by RBI in exercise of the powers vested with RBI under Section 45-IE (1) of theReserve Bank of India Act 1934 as explained earlier in this Report.

MEETINGS OF THE BOARD & BOARD COMMITTEES

As stated earlier in this Report RBI on October 04 2021 hadsuperseded the Board of Directors of your Company and initiated CIRP process vide order ofthe Hon'ble NCLT dated October 08 2021. Accordingly no board meetings were heldduring the year under review since October 04 2021 i.e. after the said supersession.

However before supersession of the Board of Directors of your Companythe Board of Directors of your Company held 6 (six) Board Meetings on April 01 2021April 23 2021 May 21 2021 June 07 2021 June 30 2021 and August14 2021.

ADVISORY COMMITTEE

RBI vide its Press Release dated October 04 2021 in exercise of thepowers conferred under Section 45-IE of the RBI Act constituted a three (3) memberAdvisory Committee to assist the Administrator in discharge of his duties and to advisethe Administrator in the operations of your Company during the Corporate InsolvencyResolution Process (CIRP).

The Administrator is the Chairman of the meetings and the minimumquorum is Chairman and at least two advisors. Further even after initiation of CIRP ofyour Company vide NCLT order dated October 08 2021 the Advisory Committee shall continueas the Advisory Committee constituted under Rule 5 (c) of the Insolvency and Bankruptcy(Insolvency and Liquidation Proceedings of Financial Service Providers and Application toAdjudicating Authority) Rules 2019. The Advisory Committee advises the Administrator onthe operations of your Company during the CIRP.

Further as stated earlier that in accordance to the framework of theAdvisory Committee as approved by RBI primary responsibility of the Advisory Committee isto guide the Administrator to undertake all steps that will maximize the value for allstakeholders of your Company through a successful resolution. Since the Administrator alsotakes over the responsibility of the Board of Directors of your Company the AdvisoryCommittee will support the Administrator in fulfillment of his role and responsibilities.The members of the Advisory Committee are Mr. T T Srinivasaraghavan former ManagingDirector of Sundaram Finance Limited Mr. Farokh N Subedar former Chief Operating Officerand Company Secretary Tata Sons Limited and Mr. Venkat Nageswar Chalasani former DeputyManaging Director State Bank of India (appointed w.e.f. June 23 2022). Mr. RSubramaniakumar former MD & CEO of Indian Overseas Bank who was originally appointedas a Member of the Advisory Committee on October 04 2021 resigned from the AdvisoryCommittee w.e.f. June 22 2022.

SIGNIFICANT AND MATERIAL EVENTS AND ORDERS PASSED BY THE REGULATORS /COURTS / TRIBUNALS

Subsequent to the supersession of the Board of Directors of yourCompany by RBI vide its Press Release dated October 04 2021 RBI had filed an applicationfor initiation of corporate insolvency resolution process against your Company underSection 227 read with clause (zk) of sub-section (2) of Section 239 of the Insolvency andBankruptcy Code (IBC) 2016 read with Rules 5 and 6 of the Insolvency and Bankruptcy(Insolvency and Liquidation Proceedings of Financial Service Providers and Application toAdjudication Authority) Rules 2019 before Kolkata Bench of the Hon'ble NationalCompany Law Tribunal ("Hon'ble NCLT").

In the said petition being C.P. (IB) No. 295/KB/2021 the Hon'bleNCLT vide order dated October 8 2021 was pleased to admit the said petition applicationand accordingly Corporate Insolvency Resolution Process (CIRP) was initiated against yourCompany.

Accordingly Mr. Rajneesh Sharma was appointed as the Administrator ofSIFL in terms of rule 5(a)(iii) of the Insolvency & Bankruptcy (Insolvency andLiquidation Proceedings of Financial Service Providers and Application to AdjudicatingAuthority) Rules 2019 to carry out the functions as contemplated by Sections 15 17 1819 and 20 of the Insolvency and Bankruptcy Code 2016. The Order further provides thatthere shall be moratorium in terms of section 14 of the said Code in respect of yourCompany.

Your Company received a letter dated November 15 2021 from theSecurities and Exchange Board of India (SEBI) being a Show Cause Notice under Rule 4(1) ofthe SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules 1995 alleging thatyour Company failed to disclose material information to the Exchange(s) as per theprovisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 read with the provisions of SEBI Circular dated September 09 2015 withrespect to an interim order passed by National Company Law Appellate Tribunal (NCLAT) inresponse to the appeal filed by CARE Ratings Limited a rating agency before the AppellateAuthority against the order passed by NCLT restraining the credit rating agencies fromtreating the non-payment of interest / principal by your Company as a default. YourCompany appeared before the Adjudicating Officer (AO) of SEBI and the AO after taking intoconsideration the facts and circumstances of the case imposed a penalty of Rs200000(Rupees Two Lacs) on your Company. However the order is subject to the outcome of theappeal filed by SEBI before the Hon'ble Supreme Court in the matter of ‘DewanHousing Finance Corporation Ltd. v. Securities and Exchange Board of India.'

Further the interim moratorium / moratorium u/s 14 of IBC as declaredin respect of your Company prohibits all of the following namely:

(a) the institution of suits or continuation of pending suits orproceedings against the corporate debtor including execution of any judgment decree ororder in any court of law tribunal arbitration panel or other authority;

(b) transferring encumbering alienating or disposing off by thecorporate debtor any of its assets or any legal right or beneficial interest therein;

(c) any action to foreclose recover or enforce any security interestcreated by the corporate debtor in respect of its property including any action under theSecuritisation and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 (54 of 2002);

(d) the recovery of any property by an owner or lessor where suchproperty is occupied by or in the possession of the corporate debtor.

As mentioned earlier the Administrator had appointed BDO India LLP(BDO/Transaction Auditor) to review transactions of the Company qualified under sections43 to 51 and sections 65 and 66 of the Code. Accordingly the Administrator of theCompany received a report from the Transaction Auditor indicating that there are certaintransactions which are allegedly fraudulent in nature as per Section 66 of the Code.Basis the findings and observations of the Transaction Auditor various applications werefiled before the Hon'ble National Company Law Tribunal Kolkata Bench in respect ofdisbursements made to several parties post Financial Year ended March 31 2022.

Re-statement of accounts of subsidiary for the year ended March 312022

The audited consolidated financial statements for the year ended March31 2022 has undergone change during the quarter ended June 30 2022 retrospectively dueto revision of audited financial statements by Trinity Alternative Investment ManagersLimited a subsidiary of your Company after having received from them their set offinancial statements for consolidation of your Company's financial statements. As aresult of this retrospective adjustment Other Comprehensive Income (net of income tax)has reduced by Rs307 crores for the year ended March 31 2022. This has alsoresulted in change in Other Equity and Investments of your company as on March 31 2022.

BOARD'S RESPONSIBILITY STATEMENT

The financial statements of your Company for the financial year endedMarch 31 2022 have been taken on record by the Administrator while discharging the powersof the erstwhile Board of Directors of your Company which were conferred upon him by theRBI vide its press release dated October 04 2021 and subsequently powers conferred uponhim in accordance with the order of the Hon'ble NCLT dated October 08 2021 to runyour Company as a going concern during CIRP. The financial statements for the year endedMarch 31 2022 have been prepared on "going concern" assumptions.

The Administrator and Advisors have not been able to analyze in depththe accuracy validity completeness or authenticity of the information and figuresmentioned in the audited financial statements as they have joined after October 04 2021.In certain instances the amount of the claim admitted or to be admitted by theAdministrator under CIRP process may differ from the amount reflecting in the books ofaccounts of your Company. The audited financial statements are drawn on the basis offigures appearing in the books of accounts of your Company as on March 31 2022.

The Administrator and present KMPs have signed the financial statementssolely for the purpose of compliance and discharging their duties during CIRP period ofyour Company and in accordance with the provisions of the Code read with the regulationsand rules thereunder and based on the explanations clarifications certificationsrepresentations and statement made by the existing staff of your Company in relation tothe data pertaining to the period prior to the joining of the present management and donot have knowledge of the past affairs finances and operations of your Company.

GENERAL DISCLOSURES

Your Administrator states that no disclosure or reporting is requiredin respect of the following items as there were no transactions on these items during theyear under review:

Issue of equity shares with differential rights as todividend voting or otherwise;

Issue of sweat equity shares;

Your Company does not have any scheme of provision ofmoney for the purchase of its own shares by employees or by trustees for the benefit ofemployees;

There was no revision in the Financial Statements;

There was no change in the nature of business;

Maintenance of Cost records is not applicable to yourCompany.

ACKNOWLEDGEMENT

Your Administrator would like to express his grateful appreciation forthe excellent support and co-operation received from the Financial Institutions BanksCentral & State Government Authorities RBI SEBI MCA Stock Exchanges DepositoriesCredit Rating Agencies Customers Manufacturers Vendors Suppliers Business AssociatesMembers Debenture holders Debenture Trustees and other Stakeholders during the yearunder review. Your Administrator also place on record his deep appreciation for thevaluable contribution of the employees for the progress of your Company and look forwardto their continued co-operation in realisation of the corporate goals in the years ahead.

On behalf of the Srei Infrastructure Finance Limited

Rajneesh Sharma Administrator

The Administrator has been appointed under Rule 5(a)(iii) of theInsolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial ServiceProviders and Application to Adjudicating Authority) Rules 2019 under the Insolvency andBankruptcy Code 2016. The affairs business and property of Srei Infrastructure FinanceLimited are being managed by the Administrator who acts as an agent of the Company onlyand without any personal liability.

Date : September 06 2022 Place : Kolkata

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