DIRECTORS' REPORT
To
The Members,
Starteck Finance Limited
Your Directors have the pleasure in presenting the 39th Annual Report of the Company on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2024.
FINANCIAL HIGHLIGHTS
The summary of the Company's financial performance, both on a consolidated and standalone basis, for FY 2024 as compared to the previous FY i.e., FY 2023 is given below:
Standalone
Consolidated
PERFORMANCE REVIEW
During the year under review, the consolidated revenue from operations increased from Rs. 2821.85 lakhs to Rs. 3732.94 lakhs. There is a net profit after tax of Rs.1590.48 lakhs as against net profit of Rs. 2182.04 lakhs in the corresponding previous year.
The standalone revenue from operations increased from Rs. 2616.47 lakhs to Rs. 2790.27 lakhs. There is a net profit after tax of Rs. 1038.42 lakhs as against net profit after tax of Rs. 984.15 lakhs in the corresponding previous year.
NATURE OF BUSINESS
During the year under review, there was no change in the nature of business of the Company.
TRANSFER TO RESERVES
During the year under review, the Company has transferred an amount of Rs. 207.68 lakhs to the Statutory Reserves, in compliance with section 45-IC of the Reserve Bank of India ("RBI") Act, 1934.
DIVIDEND
Your Directors have recommended final dividend of 2.5 % i.e. Rs. 0.25/- per equity share having face value of Rs. 10 each for the financial year ended 31st March, 2024 held by persons/entities other than promoter and promoter group subject to approval of shareholders at the ensuing Annual General Meeting (AGM).
The dividend, if approved at the ensuing AGM, would be paid to those Members whose names appear in the Register of Members / Beneficial Owners maintained by the depositories as stated in Notice of the ensuing AGM. The Promoter & Promoter group have waived their rights to receive dividend.
SHARE CAPITAL
During the year under review, the Company has not allotted any Equity Shares, thus the paid up Equity Share Capital of the Company remains the same i.e. 99,10,330 equity shares of Rs. 10/- each. Also, the Company has not issued shares with differential voting rights and sweat equity shares. Also, the Authorised Share Capital of the Company remains the same i.e. Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 1,50,00,000 (One Crore Fifty Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each.
DEPOSITS
Your Company being a Non-Deposit taking Non-Banking Financial Company (NBFC) has not accepted any deposits from the public during the year under review.
SUBSIDIARY COMPANIES AND REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
The Company has total 3 Subsidiaries i.e. V Can Exports Private Limited, Chitta Finlease Private Limited and Bhuwalka Steel Industries Limited as on 31st March, 2024. There are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013. No Company became subsidiary, associate or JV during the year under review.
As per Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company, its subsidiaries, associates and joint venture entities in accordance with applicable Accounting Standards issued by The Institute of Chartered Accountants of India, forms part of this Annual Report. The performance and financial position of each of the subsidiaries, associates and Joint Venture companies for the year ended 31st March, 2024 is attached to the financial statements hereto in Form AOC 1.
In terms of Section 136 of the Companies Act, 2013, separate audited accounts in respect of each of subsidiaries have been placed on the website of the Company i.e. www.starteckfinance.com. Further, the Company shall provide a copy of separate audited annual accounts in respect of each of its subsidiary to any member of the company who asks for it and said annual accounts will also be kept open for inspection at the Registered Office of the Company.
The Company has formulated a policy for determining ‘material' subsidiaries and such policy is disclosed on Company's website www.starteckfinance.com.
MATTERS RELATING TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
In compliance with the provisions of section 152 of Companies Act, 2013, Mr. Pankaj Jain, Director (DIN: 00048283) of the Company retires by rotation and being eligible offers himself for reappointment. Appropriate resolution for aforesaid re-appointment is being placed for approval of the members at the ensuing Annual General Meeting.
Pursuant to the recommendation of Nomination and Remuneration Committee (NRC), Mr. Amit Pitale (DIN: 07852850) who was appointed by the Board as an Additional Director in the category of Non-Executive Non Independent Director of the Company w.e.f. May 30, 2023 has been re-designated as Whole Time Director & Chief Financial Officer w.e.f. July 10, 2023 and approval of Members was obtained in the Annual General Meeting of the Company held on September 26, 2023.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the ‘criteria of Independence' as prescribed under Section 149(6) of the Act and have submitted their respective declarations as required under Section 149(7) of the Act and Regulation 16(1) of the Listing Regulations that they are not aware of any circumstance or situation, which exists or is anticipated, that could impair or impact their ability to discharge their duties with an independent judgment and without any external influence as required under Regulation 25 of the Listing Regulations.
The Independent Directors also confirmed that they have duly registered their names in the data bank for Independent Directors maintained by Indian Institute of Corporate Affairs. Further, the Board is of the opinion that the Independent Directors of the Company possess requisite qualities to act as Independent Directors including integrity, relevant expertise and experience. The Board further confirms that the Independent Directors who were required to, have duly passed the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
The certificate under Regulation 34(3) of Listing Regulations forms part of this Annual Report.
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES Number of Meetings of the Board of Directors
Seven meetings of the Board were held during the year. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Annual Report.
The Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time.
The Board has constituted the Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility Committee of the Board with specific terms of reference as per the requirements of the Listing Regulations and the Act and they make specific recommendations to the Board on matters within their areas of purview.
The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.
Additionally, during the year under review, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations. For further details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act and to the best of their knowledge and belief and according to the information and explanations obtained from the Management, the Directors of your Company state that:-
• In the preparation of the annual accounts, the applicable Accounting Standards have been followed and there were no material departures from the same;
• Such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2024 and of the profits of the Company for the year ended on that date;
• Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
• The annual Accounts of the Company have been prepared on a going concern basis;
• Internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
• Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
COMMITTEES OF THE BOARD
a) Audit Committee
An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the section on Corporate Governance, under the head, ‘Audit Committee' for matters relating to constitution, meetings and functions of the Committee.
b) Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with the provisions of subsection (3) of Section 178 of the Companies Act, 2013. Kindly refer to the section on Corporate Governance, under the head, ‘Nomination and Remuneration Committee' for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee.
c) Corporate Social Responsibility Committee
The brief outline of the Policy and the initiatives undertaken by the Company during the year are set out in Annual Report on CSR activities as Annexure I as per the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments thereto. The CSR Policy is available on the Company's website at www.starteckfinance.com.
d) Other Board Committees
For details of other Board Committees' viz. Stakeholders Relationship Committee and others, kindly refer to the section ‘Committees of the Board of Directors' which forms part of the Corporate Governance Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
In compliance with the provisions of Section 177(9) of the Companies Act, 2013, the Board of Directors of the Company has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company. The Whistle Blower Policy of the Company is placed on the website of the Company www.starteckfinance.com.
RISK MANAGEMENT
The Company's management systems, organizational structures, processes, standards, code of conduct and behaviors together form the system that governs how the Company conducts its business and manages associated risks. The approach is based on identification, evaluation, and mitigation of operational, strategic and environmental risks, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.
ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD
A formal evaluation mechanism has been adopted for evaluating the performance of the Board, the Committees thereof and individual Directors. The evaluation is based on criteria which include, among others, providing strategic perspective, integrity and maintenance of confidentiality and independence of judgment, attendance, time devoted and preparedness for the Meetings, quality, quantity and timeliness of the flow of information between the Board Members and the Management, contribution at the Meetings, effective decision making ability, monitoring the corporate governance practices, role and effectiveness of the Committees and effective management of relationship with stakeholders. Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of its directors individually and the committees of the Board and the same is reviewed by the Nomination and Remuneration Committee.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure II attached hereto.
The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is available for inspection by the members at registered office of the Company during business hours on working days up to the date of the ensuing AGM. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at cosec@starteckfinance.com, whereupon a copy would be sent.
PAYMENT OF REMUNERATION/COMMISSION TO WHOLE TIME DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANIES
Mr. Amit Pitale, Whole time Director of the Company did not receive any remuneration or commission from any subsidiary company during the FY 23-24. The Company has no holding company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Your Company, being an NBFC registered with RBI and engaged in the business of giving loans in ordinary course of its business, is exempt from complying with the provisions of Section 186 except sub-section (1) of the Companies Act, 2013 ("the Act") with respect to loans. The details with regard to Loans, guarantee & Investments made by the Company are given in Notes of the Standalone financial statements, forming part of this Annual Report.
RELATED PARTY TRANSACTIONS
All related parties transactions were placed before the Audit Committee for its approval. An omnibus approval from Audit Committee was obtained for the related party transactions which are repetitive in nature.
All related party transactions, entered into during the financial year under review, were on an arm's length basis and were in the ordinary course of business. Your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act, in Form AOC 2, is not applicable.
During the year, the material significant related party transactions pursuant to the provisions of SEBI Listing Regulations has been duly approved by the Shareholders of the Company in the AGM held on 26th September, 2023. Disclosure on Related Party transactions is provided in notes to financial statement. The Policy on Related Party Transactions is available on the Company's website and can be assessed using the link www.starteckfinance.com.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Except as disclosed elsewhere in this report, there were no material changes and commitments affecting the Company's financial position which have occurred between the end of the financial year and the date of this report.
INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The internal financial controls of the Company are commensurate with its size, scale and complexity of operations. The Company has adopted policies and procedures to ensure integrity in conducting business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors. The internal financial controls with reference to the financial statements were adequate and operating effectively.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
During the year under review, there were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. No application is made and no proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one time settlement of the Company with any Bank or Financial Institution.
STATUTORY AUDIT AND AUDITORS' REPORT
Pursuant to the provisions of Section 139 of Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, M/s MKPS & Associates, Chartered Accountants (ICAI Firm Registration No. 302014E) were appointed as the Statutory Auditors of the Company for a term of 5 years to hold office from the conclusion of the 36th Annual General Meeting held on 28th September, 2021 till the conclusion of 41st Annual General Meeting of the Company to be held in the year 2026.
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their audit reports on the financial statements for the year ended 31st March 2024. No fraud has been reported during the audit conducted by Statutory Auditors of the Company.
SECRETARIAL AUDIT AND ANNUAL SECRETARIAL COMPLIANCE REPORT
As required under provisions of Section 204 of the Companies Act, 2013 and pursuant to Regulation 24A of Listing Regulations, the reports in respect of the Secretarial Audit for FY 2023-24 carried out by Mr. Veeraraghavan N., Company Secretary in practice, in Form MR-3 forms part to this report. The said report does not contain any qualification, reservation or adverse remark or disclaimer.
Further, in terms of the provisions of Regulation 24A of the SEBI Listing Regulations and Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 issued by SEBI, Mr. Veeraraghavan N., Company Secretary in practice, has issued the Annual Secretarial Compliance Report, confirming compliance by the Company of the applicable SEBI regulations and circulars / guidelines issued thereunder.
COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable in respect of the business activities carried out by the Company.
INTERNAL AUDIT
The Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organisation's risk management, control and governance processes. The Company had appointed M/s. Sandeep V. Chavan and Company, (Firm Registration No. 148937W), Chartered Accountants, as Internal Auditors of the Company for financial year 2023-24. Findings of the Internal Auditor are placed before Audit Committee, which reviews and discusses the actions taken with the Management.
ANNUAL RETURN
The Annual Return for the financial year ended 31st March, 2024, is available on the website of the Company at http://www.starteckfinance.com/Annual-Return.html
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The operations of the Company, being financial services related, require normal consumption of electricity. The Company is taking every necessary step to reduce its consumption of energy. Further, given the nature of the activities of the Company, the disclosure on technology absorption is not applicable to the Company.
Foreign Exchange Earnings and Outgo are as follows:
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has in place an appropriate policy which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. We further state that during the financial year under review, there were no complaints received/cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
OTHER DISCLOSURES Corporate Governance
The Corporate Governance Report as stipulated under Regulation 34(3) read with Schedule V of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the requirements of Corporate Governance forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis report has been separately furnished in the Annual Report and forms a part of the Annual Report.
UNCLAIMED AND UNPAID DIVIDENDS AND TRANSFER OF SHARES TO IEPF
Kindly refer section on Corporate Governance, under head ‘Unclaimed and Unpaid Dividends and transfer of Shares to IEPF' for the amounts of unclaimed and unpaid dividends lying with the Company.
ACKNOWLEDGEMENTS
Your Directors would like to express their sincere appreciation and gratitude for the support and co-operation from its shareholders, bankers, regulators and other business constituents.
Your Directors also wish to place on record their appreciation for the commitment and hard work put in by the Management and the employees of the Company.
For and on Behalf of the Board of Directors