Sulabh Engineers & Services Ltd

Dear Stakeholders,

Board of Directors is privileged to present with great honor, this 41^st Annual Report together with Audited statement on the business and operations of the company for the year ended on 31^st March, 2024.

(Rs in lakhs)

RESULTS OF OPERATIONS AND STATE OF AFFAIRS (STANDALONE)

The highlights of the performance during the year under review are as under:

• Total Revenue from Operations decreased in current year to 0.72 % to Rs. 141.69 Lakh (as compare to Previous Year Rs. 142.72 Lakh)

• Profit Before Interest & Dep. increased to 34.27% Rs.159.07 Lakh (as per Previous year Rs. 118.47 Lakh)

• Profit after tax of the Company is also increased to 32.73 % in the current financial year which amounts to Rs. 105.68 Lakh as compared to previous year Rs. 79.62 Lakh.

RESULTS OF OPERATIONS AND STATE OF AFFAIRS (CONSOLIDATED)

The highlights of the performance during the year under review are as under:

• Total Revenue from Operations slightly decreased in current year to 13.08% to Rs.315.50 Lakh (as compare to Previous year Rs. 363.06 Lakh)

• Profit before Interest & Dep. Decreased to 19.50 % Rs. 232.37 Lakh (as per Previous year Rs. 194.45 Lakh).

• However Profit after tax of the Company increased to 18.51 % in the current financial year which amounts to Rs. 174.82 Lakh (as compared to previous year Rs. 147.51 Lakh).

SHARE CAPITAL

The paid-up equity capital as on March 31, 2024 was Rs. 10.04,75.000/-. During the year under review, the Company has not issued shares with differential voting rights nor has issued any sweat equity. As on March 31, 2024, none of the Directors of the Company hold any convertible instalments of the Company.

DIVIDEND

it was decided by the Board not to declare any dividend this year.

DEPOSITS

During the year under review, the Company has neither invited nor accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 C‘the Act") read with the Companies (Acceptance of Deposits) Rules, 2014.

TRANSFER TO RESERVES

The Company transferred an amount of Rs. 21.14 Lakh/- to the Special Reserves under section 45-IC of RBI Act, during the year.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement of the Company prepared in accordance with applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 is provided in the Annual Report.

A statement containing the silent features of the financial statement of the subsidiary in the prescribed Form AOC-1 are annexed as "Annexure- F".

SUBSIDIARY COMPANIES

As on March 31, 2024 the Company has one subsidiary, M/s "Venkatswamy Mining And Estates Private Limited"

The audited financial statements, the Auditors Report thereon and the Board's Report for the Company's subsidiary for the year ended March 31, 2024 are available on the website of the Company. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

(The name of subsidiary changed from Rodic Coffee Estates Private Limited to new name as "Venkatswamy Mining And Estates Private Limited w.e.f. 29^th April, 2024)

LENDING OPERATIONS

The Company is a Non-Banking Financial Company ("NBFC") and is engaged in providing loans for Business or Capacity expansion. Working Capital loans, loans for Purchase of Equipment and Machinery, Term Loans against Property, personal loans, loans for Purchase of Commercial Property and other finance services.

DIRECTORS' RESPONSIBILITY STATEMENT

Tn terms of Section 134(5) of the Companies Act, 2013, your Board of Directors states that:

a) In preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed and there are no material departures from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended on that date;

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

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down proper internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively;

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that the systems are adequate and are operating effectively.

CORPORATE GOVERNANCE

As was disclosed in the last year annual's report. The Company has been observing best governance practices and is committed to adhere to the Corporate Governance requirements on an ongoing basis. A separate section on Corporate Governance as stipulated under Part C of Schedule V and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance, as stipulated under Part E of Schedule V of the SEBI (Listing Obligation and Discloser Requirements) 2015 forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company does not meet the requirement of Section 135 of the Companies Act, 2013 for applicability of Corporate Social Responsibility and so the Company is not mandatorily required to contribute towards CSR for the financial year under review.

DEPOSITS FROM PUBLIC

The Company being a non-deposit taking NBEC, has not accepted any deposits from the public during the year under review.

CHANGE IN NATURE OF BUSINESS

The Company continues to operate in the same business and there is no change in the nature of business during the period under review.

STATUTORY COMPLIANCE

The Company has complied with Ind AS as prescribed under section 133 of the Companies Act, 2013. The Company has also complied with the directions issued by RBI from time to time.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a suitable and adequate Internal Control System which indeed is commensurate with the size, scale and complexity of its operations. Internal control systems are integral to Company's corporate governance framework. Internal Auditors report to the Chairman of the Audit Committee of the Board and ensure compliances with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of the company is duly constituted.

All the other directors except Mr. Vimal Kumar Sharma and Mrs. Seema Mittal are Independent and Non- Executive Directors and are not liable to retire by rotation. As Mr. Vimal Kumar Sharma is the Managing Director of the company not liable to retire by rotation, therefore pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company Mrs. Seema Mittal retires by rotation at the ensuing Annual General Meeting and offers herself for reappointment.

Mr. Vijay Kumar Jain (DIN: 08208856), Independent Director whose tenure of Five years is due for expire on 28^th September,2024, Board & NRC has recommended to the members, the proposal for reappointment of Mr. Vijay Kumar Jain as an Independent Director for a second term of five consecutive years with effect from September 28, 2024.

DECLARATION BY INDEPENDENT DIRECTOR(S)

The Company has received declaration from all the Independent Directors that they meet with the criteria of independence as prescribed under Subsection (6) of Section 149 of the Companies Act, 2013 read with Rule 6 (1) and (3) of Companies (Appointment and Qualifications of Directors) Rules, 2014 as amended from time to time & Regulation 16 & 25 of the SEBI (Listing Obligation and Discloser Requirements) 2015.

During the year, all of Independent Directors convened a separate meeting without the presence of Non- Independent Directors and members of the management as per provisions of Clause VII of Schedule IV to the Companies Act, 2013. In that meeting of Independent Directors, performance of non-independent directors. Chairman and the Board as a whole were reviewed and evaluated.

FORMAL EVALUATION OF THE PERFORMACE OF THE BOARD, COMMITTEES OF THE BOARD AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of 134(3)(p) the Companies Act, 2013 and Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually including Independent Directors as well as the evaluation of the working of its Committees. The evaluation was carried on the basis of structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, level of engagement and participation. Board culture, execution and performance of specific duties, obligations and governance. The Board has expressed their satisfaction with the evaluation process.

In pursuant to Regulation 17(10) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the evaluation of Independent Directors were done by the entire board of directors which includes -

(a) Performance of the directors; and

(b) Fulfillment of the independence criteria as specified in the regulations and their independence from the management.

COMPANY'S POLICY RELATING TO DIRECTOR'S APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished as attached to this report. "Annexure A". The weblink for the same is https://www.sulabh.org.in/upload/PDF700000292.

FAMILIARIZATION PROGRAM

The Company has adopted the Familiarization Programme to familiarize Independent Directors of the Company. On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. The details of program for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company at www.sulahh.onz.in

Statutory Auditors

During the year under review, on August 02, 2024, the Board of Directors, based on the recommendation of the Audit Committee but subject to approval of shareholders to be obtained at the General meeting of the company, recommended the appointment of M/s Ranjit Jain & Co. Chartered Accountants (FRN: 322505E) as Statutory Auditors of the Company to fill the casual vacancy caused due to the resignation of M/s Satish Soni & Co. (FRN 109333W). M/s Satish Soni & Co., Chartered Accountants, resigned on 02^nd August, 2024, from the designation of Statutory Auditor of the company citing the fact that due to personal reasons. The said appointment is pursuant to applicable provisions of the Companies Act 2013 and the SEB1 Listing Regulations, 2015. The existing/outgoing Auditor has not raised any concern or issue and there is no reason other than as mentioned in their resignation letter. M/s Ranjit Jain & Co. Chartered Accountants shall hold office upto the ensuing annual general meeting of the company.

The statutory auditors have confirmed they are not disqualified from being appointed as auditors of the Company. There is no qualification, reservation or adverse remark or disclaimer made in the Auditor's Report, needing explanations or comments by the Board. The Statutory Auditors have not reported any incident of fraud to the Audit Committee in the year under review against the Company by its officers or employees as specified under Section 143(12) of the Act.

Secretarial Auditor

CS Gopesh Sahu, Practicing Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2023-2024 as required under section 204 of the Companies Act, 2013 and the rules there under. The Secretarial Audit report for the financial year 2023-24 forms part of the Annual

Report as "Annexure B" to the Board's Report.

The Secretarial Audit Report does not contain any qualification, reservations or adverse remark. Secretarial Auditor (Material Subsidiary Company )

CS Vaibhav Agnihotri, Practicing Company Secretary conducted the Secretarial Audit of "Venkatswamy Mining And Estates Private Limited (Material Subsidiary of Sulabh Engineers and Services Limited) for the financial year 2023-2024 as per requirement under Regulation 24A of SEBI (Listing Obligation and Disclosures Requirement) Regulations, 2015. Secretarial Audit Report of Material Subsidiary is also required to be attached with annual report of holding company, as "Annexure C" to the Board's Report.

COST RECORDS AND COST AUDITORS

The provisions of Cost Audit and Records as prescribed under Section 148 of the Act, are not applicable to the Company

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

REGISTRATION OF INDEPENDENT DIRECTORS WITH INDEPENDENT DIRECTOR'S DATABANK

The Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 required all existing and those aspiring to become independent directors to apply online to Indian Institute of Corporate Affairs (IICA) for inclusion of their names with the Independent Directors Databank.

All our Independent Directors have registered themselves with the Independent Director's Databank.

COMPLIANCE CERTIFICATE FROM SECRETARIAL AUDITORS ON COMPLAINCE OF CONDITIONS OF CORPORATE GOVERNANCE

A compliance certificate from the Secretarial Auditor regarding compliance of conditions of corporate governance is annexed as Annexure- I as a part of this report as per Regulation 34 read with Para E of Schedule V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015

Audit Committee

The Audit Committee comprises Independent Directors namely Mr. Deepak Agarwal (Chairman), Mr. Rakesh Chand Agarwal and Mr. Vimal Kumar Sharma as other members.

The Audit Committee coordinated with the Statutory Auditors, Internal Auditors and other key personnel of the Company and has rendered guidance in the areas of internal audit and control, finance and accounts.

All the recommendations made by the Audit Committee were accepted by the Board.

Four meetings of the Audit Committee were held during the year. The details of which are provided in Report on Corporate Governance.

Stakeholders' Relationship Committee

The Committee had one meeting during the year. The details of which are provided in Report on Corporate Governance. There is no unresolved pending investor grievance.

Nomination & Remuneration Committee

Matters as prescribed under Sub-Sections (1) and (3) of section 178 of the Companies Act, 2013

The Nomination & Remuneration Committee consists of three Independent Directors. The Committee had one meeting during the year. The details of which are provided in Report on Corporate Governance. The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Key Managerial Personnel, Directors and the remuneration payable to them and other employees as per the policy as available with the website of the Company.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Tn line with the best Corporate Governance practices, Company has put in place a system through which the Directors and Employees may report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics without fear of reprisal.

The Employees and Directors may report to the Compliance Officer and have direct access to the Chairman of the Audit Committee. The WBP may be accessed on the Company's website at the link www.sulabh.org.in.

RISK MANAGEMNT FRAMEWORK

The Board has formulated Risk management policy including procedures and risk assessment to ensure that the Board, its Audit Committee and its Executive Management should collectively identify the risks impacting the Company's business and take suitable action for risk identification, risk minimization and risk optimization.

The Board reviews the risk trend, exposure and potential impact analysis and prepares risk mitigation plans, if necessary.

INVESTOR RELATIONS

At Sulabh engineers and Services Limited, we consider Investor Relations to be the key to building transparent, open and long-term relationships with our stakeholders. Our Investor Relations program is committed to maintaining effective communication with the investing community by adopting best practices.

Your Company always endeavors to keep the time of response to shareholders request / grievance at the minimum. Priority is accorded to address all the issues raised by the shareholders and provide them a satisfactory reply at the earliest possible time. The Shareholders' Grievance Committee of the Board meets periodically and reviews the status of the Shareholders' Grievances. The shareholders of the Company continue to be traded in electronic forum and de-materialization exists with both the depositories viz.. National Securities Depository Limited and Central Depository Services (India) Limited.

MEETING OF BOARD

The Board of Directors held Five meetings during the year, the details of which are provided in Report on Corporate Governance. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

PARTICULARS CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUBSECTION (1) OF SECTION 18S

All Contracts / Arrangements / Transactions executed by the Company during the financial year with related parties were in the ordinary course of business and on ami's length basis. The Audit Committee reviews all Related Party Transaction on quarterly basis. Company have been clearly identified in Note No. 4.3 (in both Standalone and Consolidated) in the balance sheet section annexed to this report and Particulars of such related party transactions described in Form AOC-2 as required under Section 134 (3)(h) of the Act, read with Rule 8(2) of the Companies (Accounts) Rules 2014, which is annexed herewith as "Annexure G".

The related party disclosures as specified under Para A of Schedule V read with Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 is forming part in Notes to Financial Statements.

The board has approved a policy for related party transactions which has been hosted on the website of the Company. The web-link for the same https://www.sulabh.org.in/upload/PDF/00000061.pdf. The related party transactions, wherever necessary are earned out by company as per this policy. There were no materially significant related party transactions entered into by the company during the year, which may have potential conflict with the interest of the company at large. There were no pecuniary relationship or transactions entered into by any Independent Directors with the company during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The loan made, guarantee given or security provided in the ordinary course of business by a NBFC registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As the Company being a NBFC registered with RBI the restrictions contained in the said provisions are not applicable to the Company. During the year under review the Company has invested surplus funds in various securities in the ordinary course of business. For details of the investments of the Company refer to Note No. 2.3 of the financial statements.

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

As per the provisions of Section 134(3) (m) of the Companies Act, 2013, relating to conservation of energy and technology absorption. There is a system of proper check and control in order to avoid unnecessary wastage of power and energy.

Foreign Exchange earnings and outgo is NIL.

ANNUAL RETURN AS PER SECTION 92 (3) OF COMPANIES ACT 2013

In pursuance to the provisions of Section 92(3) of the Companies Act, 2013 read with Rules made thereunder and amended time to time, the Annual Return of the Company is available on the website of the company i.e. www.sulabh.org.in and the web link of the same is https://www. sulabh.org.in/upload/PDF/00000338.pdf

REPORTING FRAUD

During the year under review, no frauds have been reported by the Auditor (Statutory Auditor, Secretarial Auditor) to the Audit Committee / Board, under Section 143(12) of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES

Details of employee remuneration as required under the provisions of Section 197 of the Act and Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate statement and forms part of the Annual Report as "Annexure D".

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and also available on Company's website. All women employees (permanent, contractual, temporary and trainee) are covered under this Policy.

The following is a summary of Sexual Harassment complaints received and disposed off during the year:

a) No. of Complaints received: Nil

b) No. of Complaints disposed off: Nil

MANAGEMENT DISCUSSION AND ANALYSIS

As per the requirements of Regulation 34(2)(e) of SEB1 Listing Obligations and Disclosure Requirements,2015 is annexed herewith as "Annexure E".

RESERVE BANK OF INDIA DIRECTIONS

The Company from the date of receipt of NBFC license continues to comply with all the applicable regulations, guidelines, etc. prescribed by the RBI, from time to time. As a systemically important non- deposit taking NBFC, the Company always strives to operate in compliance with applicable RBI guidelines and regulations and employs its best efforts towards achieving the same.

PREVENTION OF INSIDER TRADING

The Company has updated the Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre- clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All the Board of Directors and the designated employees have confirmed compliance with the Code. The Updated Code of Conduct has already posted on Company's website.

OTHERS

The Directors state that no disclosure or reporting is required in respect of the following items, during the year under review:

1. No sweat equity shares and shares with differential rights as to dividend, voting or otherwise were issued;

2. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future except following:

No significant or material orders were passed by the Regulators, Courts, or Tribunals that impact the going concern status and future operations of the Company, except for the following:

1) Show Cause Notice: On February 12,2018, a common Show Cause Notice was issued by the Learned Adjudicating Officer against 150 persons/entities, including the Company, for alleged violations of Regulation 3(a), (b), (c), (d), and Regulation 4(1), 4(2)(a), (b), and (e) of the SLBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

2) Adjudication Order: As a result of these proceedings, an Adjudication Order dated August 30, 2022 (Order No. GR/PU/2022-23/19002-19146) was issued by the Learned Adjudicating Officer of SLBI under Section 15-1 of the Securities and Exchange Board of India Act, 1992, read with Rule 5 of the Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995. The order imposed a penalty of Rs. 20,00,000/- on the Company for the alleged violations. An adverse order was also issued against the Promoters: Mrs. Deepa Mittal, Mr. Manoj Kumar Agarwal, Mr. Santosh Kumar Agarwal, Mrs. Sandhya Agarwal, Mi's. Ruchi Agarwal, Mrs. Krishna Agarwal, and Mr. Manish Agarwal.

3) Appeal to the Securities Appellate Tribunal: The Company filed Appeal No. 1038 of 2022 challenging the Adjudication Order dated August 30, 2022, before the Hon'ble Securities Appellate Tribunal. The Promoters, namely Mrs. Deepa Mittal, Mr. Manoj Kumar Agarwal, Mr. Santosh Kumar Agarwal, Mrs. Sandhya Agarwal, Mrs. Ruchi Agarwal, Mrs. Krishna Agarwal, and Mr. Manish Agarwal, also filed separate appeals against the same order.

4) Outcome of Appeal: On August 11, 2023, the Hon'ble Securities Appellate Tribunal allowed the appeal filed by Mr. Santosh Kumar Agarwal and set aside the Adjudication Order dated August 30, 2022, with respect to him.

5) Rejection of Other Appeals: On September 5, 2023, the Hon'ble Securities Appellate Tribunal rejected the Company's appeal. Consequently, the Adjudication Order dated August 30, 2022, has become binding on the Company. During the pendency of the appeal, the Company has already paid the penalty imposed by the Adjudication Order.

6) Dismissal of Promoters' Appeals: The Hon'ble Securities Appellate Tribunal also dismissed the appeals filed by the Promoters—Mrs. Deepa Mittal, Mr. Manoj Kumar Agarwal, Mrs. Sandhya Agarwal, Mrs. Ruchi Agarwal, Mrs. Krishna Agarwal, and Mr. Manish Agarwal on September 5, 2023.

Scale Based Regulations

Reserve Bank of India issued a circular on Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs on 22 October 2021 ("SBR Framework"). As per the framework, based on size, activity, and risk perceived, NBFCs are categorized into four layers, NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer (NBFC-ML), NBFC - Upper Layer (NBFC-UL) and NBFC - Top Layer (NBFC- TL). As per RBI categorization we, Sulabh Engineers and Services Limited as an NBFC come under - Base Layer (NBFC-UL). Company has made the Disclosure in the financial Statement as required under Scale Based Regulation (SBR) of RBI.

Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016

During the year under review, there was no application filed by or against the Company for corporate insolvency process under IBC before the NCLT.

The details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

During the year under review there was no instance of one-time settlement with any Bank or Financial Institution.