Dear Members,
Your Directors are pleased to present the Thirty-fourth (34th)
Annual Report together with Audited Annual Financial Statements (including Audited
Consolidated Financial Statements) of the Company for the Financial Year ended 31st March,
2023.
financial highlights
(Rs. in Lakhs)
Particulars |
Standalone |
Consolidated |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 (Restated) |
Total Revenue |
- |
- |
1,03,981.84 |
63,142.82 |
Profit/(Loss) before Interest, Depreciation & Tax |
82.28 |
(14.64) |
(2,032.32) |
(3,702.30) |
Less: Depreciation |
15.77 |
17.66 |
819.75 |
415.62 |
Less: Interest |
1.53 |
1.38 |
86.76 |
163.62 |
Profit/(Loss) before share of profit/(loss) of an associate;
exceptional items and tax |
64.98 |
(33.68) |
(2,938.83) |
(4,281.54) |
Share of Profit/ (Loss) on Associates accounted for using
equity method |
- |
- |
(8,489.82) |
(518.61) |
Profit/ (Loss) Before Exceptional Item and Tax |
64.98 |
(33.68) |
(11,428.65) |
(4,800.15) |
Exceptional Items |
- |
- |
(796.45) |
1,15,748.53 |
Profit /(Loss) before Tax |
64.98 |
(33.68) |
(12,225.10) |
1,10,948.38 |
Less: Tax Expenses |
|
|
|
|
- Current Tax |
- |
- |
22.18 |
13,075.27 |
- Deferred Tax |
- |
- |
(2,287.32) |
11,354.15 |
- Short/(Excess) Provision for Tax relating to prior years |
- |
5.37 |
(13.04) |
7.74 |
Profit/(Loss) after Tax |
64.98 |
(39.05) |
(9,946.92) |
86,511.22 |
Other Comprehensive Income |
|
|
|
|
A (i) Items that will be not reclassified subsequently to
profit or loss |
|
|
|
|
(a) Remeasurement gain/loss on defined benefit plans |
(4.43) |
(4.20) |
(122.74) |
(25.94) |
(b) Share of Other Comprehensive Income in Associate Company |
- |
- |
2.43 |
- |
(ii) Income tax relating to items that will not be
reclassified to profit or loss |
- |
- |
0.78 |
0.24 |
B (i) Items that will be reclassified subsequently to profit
or loss |
- |
- |
- |
- |
(a) Remeasurement gain/loss on defined benefit plans |
- |
- |
- |
- |
(b) Share of Other Comprehensive Income in Associate Company |
- |
- |
- |
- |
(ii) Income tax relating to items that will not be
reclassified to profit or loss |
- |
- |
- |
- |
Other Comprehensive Income |
(4.43) |
(4.20) |
(119.53) |
(25.70) |
Total Comprehensive Income |
60.55 |
(43.25) |
(10,066.45) |
86,485.52 |
Profit/ (Loss) for the year attributable to |
|
|
|
|
Owner of the company |
64.98 |
(39.05) |
(7,221.05) |
62,680.54 |
Non-controlling Interest |
- |
- |
(2,725.87) |
23,830.68 |
Total Comprehensive income for the period attributable to |
|
|
|
|
Owner of the company |
60.55 |
(43.25) |
(7,310.18) |
62,660.55 |
Non-controlling Interest |
- |
- |
(2,756.27) |
23,824.97 |
Consolidated Financial Statements
As required under SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015 [hereinafter referred to as "SEBI (LODR) Reg,
2015"] and in accordance with the Indian Accounting Standard notified under the
Companies (Indian Accounting Standards) Rules, 2015, Consolidated Financial Statements of
the Company and its subsidiaries form part of the Annual Report and are reflected in the
consolidated financial statements of the Company. These statements have been prepared on
the basis of audited financial statements received from the subsidiary companies as
approved by their respective Boards.
dividend
The Board of Directors do not recommend any dividend for the financial
year 2022-23.
In accordance with Regulation 43A of SEBI (LODR) Reg, 2015 your company
has adopted Dividend Distribution Policy with effect from June 22, 2021. The Policy lays
down various parameters to be considered by the Board before declaration/recommendation of
dividend to the members of the Company. The Dividend Distribution Policy is available on
the website of the Company at
https://www.sastasundarventures.com/Pdf/Dividend_Distribution_Policy.pdf
transfer to reserve
The Company has not transferred any amount to the General Reserve
Account during the financial year ended 31st March, 2023. STATE OF COMPANY'S AFFAIRS &
OPERATIONS
During the financial year under review your Company, made significant
progress on advancing its strategies. With the strategic partnership with the Flipkart
group, the Company is well positioned to build upon momentum and drive long term,
sustainable growth. The Company is committed to build a longterm business that offers a
data-driven, digital supply chain for pharmaceuticals, diagnostics and wellness in India,
catering to both B2B and B2C spaces.
On a standalone basis, the revenue of your Company is NIL as against
NIL during the previous year. EBIDTA for the current year is Rs 82.28 Lakhs as compared to
EBIDTA of Rs (14.64) Lakhs during the previous financial year. The net profit for the year
under review is Rs 64.98 Lakhs as against Rs (39.05) Lakhs in the previous year.
On a consolidated basis, the revenue of your Company stood at Rs
1,03,981.84 Lakhs as against Rs 63,142.82 Lakhs during the previous year. The EBIDTA for
the current year is Rs (2,032.32) Lakhs as compared to EBIDTA of Rs. (3,702.30) Lakhs
during the previous financial year. The net loss for the year under review is Rs
(9,946.92) Lakhs as against profit of Rs 86,511.22 Lakhs in the previous year.
composite scheme of arrangement
During the year under review the board of directors of your Company at
its meeting held on 27th March, 2023 has approved the Composite Scheme of
Arrangement between Sastasundar Ventures Limited ("SVL" or "Demerged
Company" or "Amalgamated Company"), Microsec Resources Private Limited
("MRPL" or "Resulting Company") and Sastasundar Healthbuddy Limited
("SHBL" or "Amalgamating Company") and their respective shareholders
and creditors ("Scheme of Arrangement" / "Scheme") under Section
230-232 and other applicable provisions of the Companies Act, 2013.
The composite scheme of arrangement after the approval of the Board on
27th March, 2023 was then filed with both the Stock Exchanges for obtaining
their No Objection Certificate in terms of the SEBI Master Circular for Scheme of
Arrangement. However, the Stock Exchange had returned the Scheme to the Company with the
instruction to re-file the same along with audited financials of the unlisted companies
involved in the Scheme. Therefore, the Scheme was again placed before the Board in its
meeting held on 14th July, 2023 for their approval for re-filing to the Stock
Exchange along with audited financial statement for the Financial Year 2022-23 of unlisted
companies involved in the Scheme.
The proposed Scheme entails the following:
Demerger of Financial Services Business Undertaking from
Sastasundar Ventures Limited to Microsec Resources Private Limited; and
Amalgamation of Sastasundar Healthbuddy Limited with Sastasundar
Ventures Limited, subsequent to the completion of demerger referred above.
Purpose and Rationale for the Demerger of the Financial Services
Business from SVL to MRPL
SVL is a multi-business corporate engaged in the business of providing
healthcare and financial services. The aforesaid businesses of SVL have been nurtured over
a period of time and are currently at different stages of growth. This scheme is in the
best interest of the Companies and their respective shareholders, employees, creditors and
other stakeholders on account of following benefits:
(a) Demerger shall lead to creation of a separate, distinct and focused
entity housing the Financial Services Business leading to greater operational
efficiencies;
(b) Segregating the businesses would enable independent business
opportunities, attracting different sets of strategic partners and other stakeholders and
would bring about greater internal control on business processes / ease in decision
making;
(c) Independent group structure for each of the Business Segments of
the group will ensure required depth and focus on each of the segments and adoption of
strategies necessary for the growth of the respective segments. The structure shall
provide independence to the management in decisions regarding the use of their respective
cash flows for dividends or capital expenditure in their respective businesses; and
(d) Cost savings are expected to flow from more focused operational
efforts, rationalization, standardization and simplification of business processes,
productivity improvements, and the elimination of duplication, and optimum rationalization
of administrative expenses and utilization of human resources.
Purpose and Rationale for the Amalgamation of SHBL with SVL
SHBL is engaged in the business of wholesale trading of medicinal
products, healthcare products and other Over the Counter (OTC) products and food
processing unit. The aforesaid business of SHBL has been nurtured over a period of time.
This scheme is in the best interest of the Companies and their respective shareholders,
employees, creditors and other stakeholders on account of following benefits:
(a) SHBL is the main operational entity in the Healthcare Segment of
the group and therefore it's Amalgamation with SVL shall result in maximization of overall
shareholder value;
(b) Achieve simplification of group structure, optimal utilization of
resources, better administration and cost reduction;
(c) Creating synergies in operations, benefit of scale and enhancing
competitive strength since duplication of administrative efforts, legal and regulatory
compliances will be unified; and
(d) Independent group structure for each of the business segments of
the group (i.e., Healthcare Business and the Financial Services Business) will ensure
required depth and focus on each of the segments and adoption of strategies necessary for
the growth of the respective segments. The structure shall provide independence to the
management in decisions regarding the use of their respective cash flows for dividends or
capital expenditure in their respective businesses.
The aforesaid scheme is subject to necessary approvals from the BSE
Limited, the National Stock Exchange of India Limited, the Securities and Exchange Board
of India, the NCLT and other statutory or regulatory authorities.
deposits
During the year under review, the Company has neither accepted nor
renewed any deposits from the public within the meaning of Section 73 of the Companies
Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
share capital
The paid up Equity share capital of the Company as at 31st March, 2023
stood at Rs. 31.81 crores divided into 31810500 equity shares of face value of Rs. 10
each. There has been no change in the Authorised and Paid up Share Capital of the Company
during the year under review.
A) Issue of equity shares with differential rights: The Company did not
issue equity shares with differential voting rights during the financial year 2022-23.
B) Issue of sweat equity shares: The Company did not issue sweet equity
shares during the financial year 2022-23.
C) Issue of employee stock options: The Company did not issue stock
options during the financial year 2022-23.
D) Provision of money by Company for purchase of its own shares by
employees or by trustees for the benefit of employees: The Company does not have a scheme
for purchase of its own shares by employees or by trustees for the benefit of employees.
CHANGE IN NATURE OF BUSINESS, IF ANY
There has been no change in the nature of business of the Company
during the financial year ended 31st March, 2023.
LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the note no. 5 to the
Financial Statements.
material changes and commitments
No material changes and commitments affecting the financial position of
your Company have occurred between the end of the financial year of the Company to which
financial statements relates and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATOR/COURTS/TRIBUNALS IMPACTING THE GOING CONCERN
status and company's operations in future
There were no significant and material orders passed by the Regulators
or Courts or Tribunals during the year impacting the going concern status and the
operations of the Company in future.
internal control systems and their adequacy
Your Company's Internal Control Systems are commensurate with the
nature, size and complexity of its business and ensure proper safeguarding of assets,
maintaining proper accounting records and providing reliable financial information.
The Audit Committee have laid down internal financial controls to be
followed by the Company and such policies and procedures have been adopted by the Company
for ensuring the orderly and efficient conduct of its business, including adherence to
Company's policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records and the timely
preparation of reliable financial information.
An external independent firm carries out the internal audit of the
Company operations and reports to the Audit Committee on a regular basis. Internal Audit
provides assurance on functioning and quality of internal controls along with adequacy and
effectiveness through periodic reporting.
However, the management of subsidiary of the company, during the year
has detected misappropriation of cash collections from customers aggregating to Rs. 796.45
lakhs (Sastasundar Healthbuddy Limited- Rs. 161.40 Lakhs) (Retailer Shakti Supply Chain
Pvt Ltd - Rs. 635.05 Lakhs) by few employees of the Sastasundar Healthbuddy Limited
("SHBL"), subsidiary of the company and Retailer Shakti Supply Chain Pvt Ltd
("RSCPL "), step down subsidiary of the company. The statutory auditors in this
regard have also expressed their adverse opinion, the details of which are given elsewhere
in this report. Report on the Internal Financial Control under Section 143(3)(i) of the
Companies Act, 2013 is attached as annexure to the Independent Auditors Report of the
Consolidated Financial Statement for the FY 2022-23 which is part of the report.
SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES:
As on March 31, 2023 the Company has nine subsidiaries (both direct and
step down). During the financial year, no company became/ ceased to be subsidiaries, joint
ventures and associates.
In accordance with Section 129(3) of the Companies Act, 2013, the
Company has prepared consolidated financial statements of the Company and all its
subsidiaries forms part of the Annual Report. Further a statement containing the salient
features of the financial statements of each of the subsidiaries in the prescribed format
Form AOC-1, forms part of the Annual Report. The annual accounts of the subsidiary
companies will be made available to the shareholders on request and will also be kept for
inspection by the shareholders at the registered office of your Company.
Further as per section 136 of the Companies Act, 2013, the audited
financial statements, including the consolidated financial statements and related
information of the Company are available at our website at www.sastasundarventures.com.
A Policy has been formulated for determining the Material Subsidiaries
of the Company pursuant to Regulation 46 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 [hereinafter referred to as "SEBI (LODR) Reg,
2015"]. The said Policy has been posted on the Company's website at the
http://www.sastasundarventures.com/Pdf/SVL_ PolicyforDeterminationofMaterialSubsidiary.pdf
As per the provisions of Regulation 16(1)(c) of the SEBI (LODR)
Regulations, 2015, the Company has two material unlisted subsidiary, Sastasundar
Healthbuddy Limited and Retailer Shakti Supply Chain Private Limited.
The Company does not have any Joint Venture Company. The Company has
one Associate Company i.e. Flipkart Health Limited (formerly Sastasundar Marketplace
Limited).
BOARD OF DIRECTORS:
a) Directors and Key Managerial Personnel
As per the provision of the Companies Act, 2013 Mr. Ravi Kant Sharma
(DIN: 00364066) retires by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment. Your Directors recommended the re-
appointment of Mr. Ravi Kant Sharma as Director.
The tenure of Mr. Banwari Lal Mittal (DIN: 00365809) as Managing
Director & CEO expires on 30th June, 2023. The Board of Director at their meeting held
on 30th May, 2023, on the recommendation of Nomination and Remuneration Committee and
subject to the approval of members, had re-appointed Mr. Banwari Lal Mittal as Managing
Director & CEO for a period of 5 years w.e.f. 1st July, 2023 without any remuneration.
The approval of members is being sought at the ensuing Annual General Meeting.
None of the Directors of the Company are disqualified for being
appointed as Directors, as specified in section 164(2) of the Companies Act, 2013 and Rule
14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. Further,
in the opinion of the Board, the Independent Directors also possess the attributes of
integrity, expertise and experience as required to be disclosed under Rule 8(5)(iiia) of
the Companies (Accounts) Rules, 2014.
The details of Director being recommended for reappointment as required
under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are
contained in the accompanying Notice convening the ensuing Annual General Meeting of the
Company. Appropriate Resolution(s) seeking your approval to the re-appointment of Director
are also included in the Notice.
Pursuant to Section 203 of the Companies Act, the Key Managerial
Personnel of the Company are Mr. Banwari Lal Mittal, Managing Director, Mrs. Manisha
Sethia, Chief Financial Officer and Mr. Pratap Singh, Company Secretary.
None of the Directors of the Company receives any commission from the
Company.
b) Declaration by the Independent Director(s)
All the Independent Directors have furnished the requisite declarations
that they meet the independence criteria as laid down under section 149(6) of the
Companies Act, 2013 read with the rules made thereunder and Regulation 16(1)(b) of the
SEBI (LODR) Reg, 2015. Further, the Board of Directors has taken on record the declaration
and confirmation submitted by the Independent Director under regulation 25(8) after
assessing its veracity. The Independent Directors have also submitted a declaration
confirming that they have registered their names in the databank of Independent Directors
as being maintained by the Indian Institute of Corporate Affairs (IICA) in terms of Rule 6
of the Companies (Appointment and Qualification of Directors) Rules, 2014. The Independent
Directors have complied with the code for Independent Director as prescribed under
Schedule IV of the Companies Act, 2013.
c) Familiarization Programme undertaken for Independent Director
In terms of Regulation 25(7) of the SEBI (LODR) Reg, 2015, your Company
is required to conduct Familiarisation Programme for Independent Directors to familiarise
them about your Company including nature of Industry in which your company operates,
business model, responsibilities of the Independent Directors, etc. Further, pursuant to
Regulation 46 of the SEBI (LODR) Reg, 2015, your Company is required to disseminate on its
website, details of familiarization programmes imparted to the Ids including the details
of the same. During the year, the Company has organised one familiarisation Programme of
the Independent Directors. The details of the familiarisation programme of Independent
Directors are provided in the Corporate Governance Report. The link to the details of
familiarization programmes imparted to the Independent Directors is
http://www.sastasundarventures.com/Pdf/FamiliarizationProgrammeForIndependentDirector.pdf
d) Board Evaluation
The Nomination and Remuneration Committee of the Company has formulated
and laid down criteria for Performance evaluation of the Board (including Committees) and
every director (including Independent Directors) pursuant to the provisions of Section
134, Section 149 read with the code of Independent Director (Schedule IV) and Section 178
of the Companies Act, 2013 read with Rules framed thereunder and Regulation 19(4) read
with Part D of Schedule II of SEBI (LODR) Reg, 2015.
For annual evaluation of the Board as a whole, its Committee(s) and
Individual Directors including the Chairman of the Board, the Company has formulated a
questionnaire to assist in evaluation of the performance. The manner in which the
evaluation has been carried out has been explained in the Corporate Governance Report.
During the year under review, the Independent Directors of the Company
reviewed the performance of Non-independent Directors, the board as a whole and the
chairperson of the Company, taking into account the views of executive and non- executive
directors.
e) Remuneration Policy
The Board has on the recommendation of the Nomination &
Remuneration Committee adopted the Remuneration Policy, which inter alia includes policy
for selection and appointment of Directors, Key Managerial Personnel, Senior Management
Personnel and their remuneration. The remuneration policy of the Company aims to attract,
retain and motivate qualified people at the Executive and at the Board levels. The
remuneration policy seeks to employ people who not only fulfill the eligibility criteria
but also have the attributes needed to fit into the corporate culture of the Company. The
salient features of the Policy has been disclosed in the Corporate Governance Report,
which forms part of this Annual Report. The said policy is available at the weblink:
https://sastasundarventures.com/Pdf/SVL_Remuneration_policy.pdf.
meetings of the board of directors and committee
a) Board of Directors
The Board meets at regular intervals to discuss and decide on business
policy and strategy apart from other Board business. However, in case of special and
urgent business need, the Board's approval is taken by passing resolutions through
circulation, as permitted by law, which are confirmed in the subsequent Board meeting.
During the year under review, five Board Meetings were convened and held on 30th
May, 2022, 13th August, 2022, 14th November, 2022, 14th
February, 2023 and 27th March, 2023, the details of which are given in the
Corporate Governance Report. The meetings were held in compliance with the various
provisions of the Act/Listing Regulations.
b) Audit Committee
The composition, number of meetings held and attended and terms of
reference of the Audit Committee has been furnished in the Corporate Governance Report
forming a part of this Annual Report. There has been no instance where the Board has not
accepted the recommendations of the Audit Committee.
c) Nomination and Remuneration Committee
The composition, number of meetings held and attended and terms of
reference of the Nomination and Remuneration Committee has been furnished in the Corporate
Governance Report forming a part of this Annual Report.
d) Stakeholders Relationship Committee
The composition, number of meetings held and attended and terms of
reference of the Stakeholders Relationship Committee has been furnished in the Corporate
Governance Report forming a part of this Annual Report.
e) Risk Management Committee
The composition, number of meetings held and attended and terms of
reference of the Risk Management Committee has been furnished in the Corporate Governance
Report forming a part of this Annual Report.
f) Investment Committee
The composition, number of meetings held and attended and terms of
reference of the Investment Committee has been furnished in the Corporate Governance
Report forming a part of this Annual Report.
g) Separate Meeting of Independent Directors
The Independent Directors met on 14th November, 2022 and 27th March,
2023 without the attendance of Non-Independent Directors and members of the Management.
The Independent Directors at its meeting held on 14th November, 2022 reviewed
the performance of Non-Independent Directors and the Board as a whole, the performance of
the Chairman of the Company, taking into account the views of Executive Directors and
Non-Executive Directors and assessed the quality, quantity and timeliness of flow of
information between the Company Management and the Board that is necessary for the Board
to effectively and reasonably perform their duties. The independent directors at its other
meeting held on 27th March, 2023, reviewed the draft composite scheme of
arrangement and fairness opinion for issue of Report from the Committee of Independent
Directors
auditors
(a) Statutory Auditors
M/s. JKVS & Co., Chartered Accountants (Firm Registration Number:
318086E), the Statutory Auditors of the Company have been appointed as Statutory Auditors
of the Company by the Members of the Company from the conclusion of 33rd Annual General
Meeting held on 29th September, 2022 till the conclusion of 38th Annual General Meeting of
the Company to be held in the year 2027.
M/s. JKVS & Co., Chartered Accountants, the Statutory Auditors have
submitted their Independent Auditor Report for the financial year ended 31st March, 2023
and they have made no qualification, reservation, observation or adverse remarks or
disclaimer in their Standalone Audit Report. However, the Consolidated Audit Report for
the financial year ended 31st March, 2023 have been qualified on account of qualification
in the subsidiary companies accounts, which has been detailed below together with
management comments thereof.
Qualification in Consolidated Audit Report of FY 2022-23 and Auditors
Opinion on Internal Control systems and their adequacy
The Statutory Auditor in their Consolidated Audit Report for FY 2022-23
has expressed Qualification with respect to Financial Statement of subsidiaries and
opinions with respect to internal controls. The management of the subsidiaries believes
that the Company has adequate internal financial control system in place which operates
effectively. The Internal Audit team monitors and evaluates the efficacy and adequacy of
internal control system in the Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company. Based on the report of internal
audit, management undertakes corrective actions in their respective areas and thereby
strengthens the controls.
i) The Independent Auditors of Sastasundar Healthbuddy Limited
("SHBL"), subsidiary company have given a Qualified Opinion on the financial
statements of SHBL for the year ended March 31, 2023 vide their report dated July 13,
2023, which has been considered by the statutory auditors of the Company. The basis for
Qualified Opinion described by the Independent Auditors of SHBL in their report is as
under:
A) Qualification with respect to Investment by SHBL in 0.01%
Non-Cumulative Compulsorily Convertible Preference Shares (CCPS) issued by its associate
(erstwhile wholly owned subsidiary) and opinion in respect to internal controls for
management review of estimates in relation to valuation of Investments in 0.01%
Non-Cumulative Compulsorily Convertible Preference Shares (CCPS) issued by its associate
(erstwhile wholly owned subsidiary).
Qualification in Audit Report
We draw attention to Note 47 of the Consolidated Financial Statement
with regard to fair valuation of the investment in 0.01% Non-Cumulative Compulsorily
Convertible Preference Shares (CCPS) issued by its associate (erstwhile wholly owned
subsidiary) by the management based on its internal assessment and best estimate of the
milestone shares, milestone events and milestone consideration, as defined in the Put Call
Option Agreement dated 19 November 2021 and its subsequent amendments. Pending
finalisation of the terms and conditions of the milestone shares, milestone events and
milestone consideration, the auditor of subsidiary company were unable to obtain
sufficient appropriate audit evidence about the fair value the CCPS as at 31 March 2023.
Consequently, we were unable to determine whether any adjustments to these amounts were
necessary and its resultant impact on the loss for the year ended 31 March 2023.
Adverse Opinion on internal Controls
SHBL internal control system for management review of estimates in
relation to valuation of investments was not operating effectively which resulted in
non-compliance with Ind AS.
Management's Response
SHBL has received 99,873 number of 0.01% Non-Cumulative Compulsorily
Convertible Preference Shares (CCPS) from its associate (erstwhile wholly owned
subsidiary) in the previous financial year. SHBL has entered into a Put Call Option
Agreement on the 19th November 2021 with its associate and the purchaser ('the investor')
(the Holding Company of the associate) whereby it agreed to sell 75.1% of the aforesaid
CCPS ('milestone shares') to the investor at a specified consideration on achievement of
certain milestones on or before the milestone event target dates by SHBL.
The put call option agreement was subsequently amended on 3rd March
2022 and 17th April 2023. As per the last amendment, SHBL agreed to transfer 12,612 CCPS
to the investor for an agreed consideration, against which Rs. 1,669.23 lakhs were
received in May 2023, and 4,182 CCPS to be converted into equity shares of the associate
as per the conversion ratio defined in the agreement, post achievement of the specified
milestones. With respect to the remaining CCPS, it was decided that SHBL, the associate,
and the investor will mutually discuss and agree in writing the terms and conditions of
the remaining milestone events, milestone shares and milestone consideration. The maximum
overall consideration payable for all milestones has been specified by the amendment
agreement dated 17 April 2023 which is in line with the amended Put Call Option Agreement
dated 3rd March 2022.
The management of SHBL, based on its internal assessment and best
estimate of milestone events, milestone shares and milestone consideration, has derived
the fair value of the investment for the aforesaid CCPS by engaging an independent
registered valuer. Further, the management estimates that all the milestone events would
fall due within a period of 12 months from the Balance Sheet date and hence 75.1% of the
aforesaid investment has been classified under current assets.
B) Qualification on determining the period specific effects of expenses
booked as exceptional item on comparative information for the prior periods.
Qualification in Audit Report
We draw attention to Note 34.1 of the financial statement, the Company
has recorded INR 161.40 lacs as an expense during the year and disclosed as exceptional
item. The Company has not determined the period specific effects on comparative
information for the prior periods of the impact of misappropriation of cash collections
from customers aggregating to INR 161.40 lacs by few employees. As a result, we are unable
to assess the likely impact of the non- compliance with the Ind AS 8 - Accounting
Policies, Changes in Accounting Estimates and Errors, on the financial statements
including the comparative information presented and disclosures thereof.
Adverse Opinion on internal Controls
SHBL did not have an appropriate internal control system for cash
collections and debtors balance reconciliations which resulted in the omission of
recording cash collected from debtors due to fraud.
Management's Response
During the year, the Management of the subsidiary (SHBL) based on its
internal assessment, has detected misappropriation of cash collections from customers
aggregating to INR 161.40 lacs by few employees of SHBL during the current financial year.
SHBL has referred the matter to the police department and after filing of the First
Information Report (FIR), the aforesaid employees were arrested by the police and an
investigation charge sheet has been filed with the Additional Chief Judicial Magistrate,
Baruipur, West Bengal by the police.
SHBL has expensed the aforesaid amount during the current year under
the heading "exceptional item" and SHBL is taking necessary legal action to
recover the amount.
SHBL had detected the misappropriation after the approval of Financial
Statement for the FY 2021-2022. Further the Determination of Specific Period were not
possible from the Investigation Charge Sheet of the Police Authorities. The
misappropriation is quantified on the date of the report.
SHBL is taking necessary legal action to recover the amount. However,
as conservative approach it has been decided to expenses off and hence charged off to
current FY 22-23 only.
The Management of the subsidiary has taken opinion from Independent
Chartered Accountant, where the opinion received was in line with Management estimate to
expense off in Current FY 22-23 only.
C) Qualification on Pending Reconciliation with reference to Note 16.2
under Trade Payables Qualification in Audit Report
Based on audit procedures performed in relation to trade payables, on
sample vendor balances we noted instances wherein the independent balance confirmations
received from vendors were not in agreement with the balances in the books of account. As
stated in Note 16.2 to the financial statements, the management is in the process of
reconciling the outstanding balances as at 31 March 2023. Pending reconciliations of the
said balances, we are unable to comment on the adjustments, if any, with respect to the
balances of trade payables arising out of such reconciliation and its consequential impact
on these financial statements.
Adverse Opinion on internal Controls
SHBL did not have an appropriate internal control system for
reconciliations of trade payables which could potentially result in material misstatements
in the Company's trade payables and related purchase balances
Management's Response
Trade Payables of SHBL as of 31st March 2023 are net of debit note
balance of Rs 822.87 lacs related to the return of goods (generally medicine).
This debit notes are related to return of Goods (generally medicine).
The suppliers take few months to issue credit notes as per normal trade practice in pharma
Industry and there is always a time lag between Purchase Debit Note Raised and Credit Note
Received. The management of SHBL is in the process of collecting and matching the debit
note with corresponding credit note issued by the vendor and reconciling the outstanding
balance of debit notes as at 31st March 2023.
ii) The Independent Auditors of Retailer Shakti Supply Chain Private
Limited ("RSSCPL"), a step down subsidiary have given a Qualified Opinion on the
financial statements of RSSCPL for the year ended March 31, 2023 vide their report dated
July 13, 2023, which has been considered by the statutory auditors of the company. The
basis for Qualified Opinion described by the Independent Auditors of RSSCPL in their
report is as under:
A) Qualification on determining the period specific effects of expenses
booked as exceptional item on comparative information for the prior periods.
Qualification in Audit Report
We draw attention to Note 34.1 of the Consolidated Financial
Statements, the Company has recorded INR 635.05 lacs as an expense during the year and
disclosed as exceptional item. The Company has not determined the period specific effects
on comparative information for the prior periods of the impact of misappropriation of cash
collections from customers aggregating to INR 635.05 lacs by few employees. As a result,
we are unable to assess the likely impact of the non-compliance with the Ind AS 8 -
Accounting Policies, Changes in Accounting Estimates and Errors, on the Consolidated
Financial Statements including the comparative information presented and disclosures
thereof."
Adverse Opinion on internal Controls
The step down subsidiary, RSSCPL did not have an appropriate internal
control system for cash collections and debtors balance reconciliations which resulted in
the omission of recording cash collected from debtors due to fraud.
Management's Response
During the year, the Management based on its internal assessment, has
detected misappropriation of cash collections from customers aggregating to INR 635.05
lacs by few employees of the subsidiary. The Management has referred the matter to the
police department and after filing of the First Information Report (FIR), the aforesaid
employees were arrested by the police and an investigation charge sheet has been filed
with the Additional Chief Judicial Magistrate, Baruipur, West Bengal by the police.
RSSCPL has expensed the aforesaid amount during the current year under
the heading "exceptional item" and the subsidiary is taking necessary legal
action to recover the amount. RSSCPL had detected the misappropriation after the approval
of Financial Statement for the FY 2021-2022. Further the Determination of Specific Period
were not possible from the Investigation Charge Sheet of the Police Authorities. The
misappropriation is quantified on the date of the report.
The subsidiary company is taking necessary legal action to recover the
amount. However, as conservative approach it has been decided to expenses off and hence
charged off to current FY 22-23 only.
Management has taken opinion from Independent Chartered Accountant,
where the opinion received was in line with Management estimate to expense off in Current
FY 22-23 only.
(b) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with corresponding Rules framed thereunder, M/s MKB & Associates, a firm of
Company Secretaries were appointed as the Secretarial Auditors of the Company to carry out
the secretarial audit for the year ending 31st March, 2023.
Annual Secretarial Audit Report
In terms of Section 204 of the Companies Act, 2013 and Regulation 24A
of the SEBI (LODR) Reg, 2015, a Secretarial Audit Report given by the Secretarial Auditors
in Form No. MR-3 is annexed with this Report as "Annexure- I". There are no
qualifications, reservations or adverse remarks made by Secretarial Auditors in their
Report.
However, the secretarial auditor in its report have reported that
pursuant to an inspection carried out under Section 206(5) of the Companies Act, 2013;
proceedings have been initiated before the relevant judicial authorities for alleged
violations of the provisions of Companies Act, 2013; the Company has denied the alleged
violation in its reply to the Inspecting officer and is taking necessary steps to contest
the same.
The secretarial auditor in its report have further reported that the
management based on its Internal assessment, has detected misappropriation of cash
collections from customers aggregating to Rs. 796.45 lakhs (Sastasundar Healthbuddy
Limited - Rs. 161.40 Lakhs) (Retailer Shakti Supply Chain Pvt Ltd - Rs. 635.05 Lakhs) by
few employees of the Sastasundar Healthbuddy Limited ("SHBL"), subsidiary of the
company and Retailer Shakti Supply Chain Pvt Ltd ("RSCPL"), step down subsidiary
of the company during the current financial year. SHBL has referred the matter to the
police department and after filing of the First Information Report (FIR), the aforesaid
employees were arrested by the police and an investigation charge sheet has been filed
with the Additional Chief Judicial Magistrate, Baruipur, West Bengal by the police. The
management is taking necessary legal action to recover the amount and on conservative
approach has expensed the aforesaid amount during the current year under the heading
"exceptional item" in Consolidated financial statements for the Financial Year
2022-23.
As required under Regulation 24A of the SEBI (LODR) Reg, 2015,
Secretarial Audit Report in Form No. MR-3 of Sastasundar Healthbuddy Limited and Retailer
Shakti Supply Chain Private Limited, material unlisted subsidiaries of the Company is also
annexed herewith and marked as "Annexure- II and Annexure - III" respectively.
FRAUD REPORTING:
During the year, the management based on its internal assessment, has
detected misappropriation of cash collections from customers aggregating to Rs. 796.45
lakhs (Sastasundar Healthbuddy Limited - Rs. 161.40 Lakhs) (Retailer Shakti Supply Chain
Pvt Ltd - Rs. 635.05 Lakhs) by few employees of the Sastasundar Healthbuddy Limited
("SHBL"), subsidiary of the company and Retailer Shakti Supply Chain Pvt Ltd
("RSCPL "), step down subsidiary of the company during the current financial
year. SHBL has referred the matter to the police department and after filing of the First
Information Report (FIR), the aforesaid employees were arrested by the police and an
investigation charge sheet has been filed with the Additional Chief Judicial Magistrate,
Baruipur, West Bengal by the police.
The management is taking necessary legal action to recover the amount
and on conservative approach has expensed the aforesaid amount during the current year
under the heading "exceptional item" in Consolidated financial statements for
the Financial Year 2022-23.
related party transactions
During the financial year 2022-23, your Company has entered into
transactions with related parties as defined under Section 2(76) of the Companies Act,
2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in
the ordinary course of business and on arms' length basis and in accordance with the
provisions of the Companies Act, 2013, Rules issued thereunder and SEBI (LODR) Reg, 2015.
Thus the disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is
not required. However, your attention is drawn to the Related Party disclosure in Note No.
23 of the Standalone Financial Statements.
During the financial year 2022-23, there were no materially significant
related party transactions entered into by the Company, which may have a potential
conflict with the interest of the Company at large. There were no pecuniary relationship
or transactions entered into by any Independent Director with the Company during the year
under review.
At the Annual General Meeting held on 29th September, 2022 the Company
has taken approval from the members for Material Related Party Transaction(s) between
Sastasundar Healthbuddy Limited (SHBL), subsidiary of Sastasundar Ventures Limited and
Retailer Shakti Supply Chain Private Limited (RSSCPL), step down subsidiary of Sastasundar
Ventures Limited for an aggregate value of upto Rs. 300 crore for each financial year,
subject to such contract(s)/ arrangement(s)/ transaction(s) being carried out at arm's
length and in the ordinary course of business of SHBL and RSSCPL.
All Related Party Transactions are placed before the Audit Committee
and also before the Board for approval. Omnibus approval was obtained on a yearly basis
for transactions which were of repetitive nature. Transactions entered into pursuant to
omnibus approval of all the Related Party Transactions are placed before the Audit
Committee and the Board for review and approval on a quarterly basis.
The Company has formulated a policy on related party transactions for
purpose of identification and monitoring of such transactions. The said policy on related
party transactions as approved by the Board is posted at the Company's website at the
weblink http://www.sastasundarventures.com/Pdf/SVL_RelatedPartyTransactionPolicy.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo as per section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as
"Annexure - IV".
PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as
"Annexure - V" and forms part of the Report.
annual return
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of
the Act, as amended, read with Rule 12 of the Companies (Management and Administration)
Rules, 2014, the Annual Return of the Company for the Financial Year ended 31st March,
2023 is available on the website of the Company at
https://www.sastasundarventures.com/Pdf/Draft_Annual_ Return_31.03.2023.pdf
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal
mechanism to the Directors and Employees to report their concern about unethical
behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or
ethics policy. The policy provides for adequate safeguards against victimization of
employees who avail of the mechanism and also provides for direct access to the Chairman
of the Audit Committee. The details of the Whistle Blower Policy is explained in the
Corporate Governance Report and also posted on the website of the Company at the weblink
http://www. sastasundarventures.com/Pdf/SVL_whistle_blower_policy.pdf
During the year under review, no complaints have been
received/reported.
corporate social responsibility
The provisions relating to the Corporate Social Responsibility
("CSR") are not applicable to the Company.
business responsibility and sustainability report
The Securities and Exchange Board of India (SEBI) has mandated India's
top 1,000 listed entities based on market capitalization on the BSE and NSE as on March
31, 2022 to submit a 'Business Responsibility and Sustainability Report' (BRSR) along with
their Annual Report for the financial year 2022-23. This report is required to be in line
with the 'National Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business' (NVGs) as released by the Ministry of Corporate Affairs
(MCA) in July, 2011 and the amendment to Listing Regulations in May 2021. As per
Regulation 34(2)(f) of SEBI (LODR) Reg 2015, BRSR is a report on the nine principles of
the National Voluntary Guidelines on social, environmental and economic responsibilities
of business as framed by the MCA, is annexed herewith as "Annexure- VI" and
forms a part of this Report.
policy on prevention of insider trading
Your Company has adopted a Code for Prevention of Insider Trading with
a view to Regulate trading in equity shares of the Company by the Directors and designated
employees of the Company. The said Code of Conduct is available on the website of the
Company at www.sastasundarventures.com. The Code requires preclearance for dealing in
Company's shares and prohibit the purchase or sale of shares in your company by the
Directors and designated employees, while they are in possession of unpublished price
sensitive information and also during the period when the Trading Window remains closed.
corporate governance report and management discussion analysis report
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements as set out by SEBI. The
Company has also implemented several best corporate governance practices. The report on
Corporate Governance and Management Discussion & Analysis Report as stipulated under
Schedule V of the SEBI (LODR) Reg, 2015 forms an integral part of this report.
practicing company secretaries' certificate on corporate governance
In Compliance with the provisions of Regulation 34 of the SEBI (LODR)
Reg, 2015 read with Schedule V of the said Regulations, the Corporate Governance
Certificate issued by the Practicing Company Secretaries, M/s MKB & Associates,
Company Secretaries regarding compliance with the conditions of Corporate Governance as
stipulated is annexed to this report.
Your Company has taken adequate steps for strict compliance with the
Corporate Governance guidelines, as amended from time to time.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company has complied with Secretarial Standard on Meetings of the
Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company
Secretaries of India during the year under review.
LISTING WITH STOCK EXCHANGES
Your Company is listed with BSE Ltd. and National Stock Exchange of
India Ltd. and the Company has paid the Listing Fees to both the exchanges on time.
CHIEF EXECUTIVE OFFICER (CEO) / CHIEF FINANCIAL OFFICER (CFO)
CERTIFICATION
As required under Regulation 17(8) of the SEBI (LODR) Reg, 2015, the
CEO/CFO certification has been submitted to the Board and a copy thereof is contained
elsewhere in this Annual Report.
risk management
Your Company's risk management strategy strives to balance the
trade-off between risk and return and ensure optimal risk-adjusted return on capital, and
entails independent identification, measurement and management of risks across the various
businesses of your Company.
The Company has formulated a Risk Assessment & Management Policy
which identify, evaluate business risks and opportunities. The risk management system of
the Company is reviewed by the Audit Committee and the Board of Directors on a regular
basis. During the year, no major risks were noticed, which may threaten the existence of
the company.
The Company has duly constituted risk management committee, the details
of the same are covered in the Corporate Governance Report forming part of the Board's
Report.
directors' responsibility statement
The Directors acknowledges the responsibility for ensuring compliances
with the provisions of section 134(3)(c) read with section 134(5) of the Companies Act,
2013 and provisions of the SEBI (LODR) Reg, 2015 and in the preparation of the annual
accounts for the year ended 31st March, 2023 states that
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(b) they have 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 at the end of the
financial year and of the profit and loss of the company for that year;
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and were operating
effectively; and
(f) proper systems had been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
other disclosures
Your Directors state that:
1. No proceedings are pending against the Company under the Insolvency
and Bankruptcy Code, 2016.
2. The Company serviced all the debts & financial commitments as
and when they became due and no settlements were entered into with the bankers.
3. The company is not required to maintain cost records.
human resources
Our employees are our core resource and the Company has continuously
evolved policies to strengthen its employee value proposition. Your Company was able to
attract and retain best talent in the market and the same can be felt in the past growth
of SastaSundar Group. The Company is constantly working on providing the best working
environment to its Human Resources with a view to inculcate leadership, autonomy and
towards this objective, your company spends large efforts on training. Your Company shall
always place all necessary emphasis on continuous development of its Human Resources. The
belief "great people create great organization" has been at the core of the
Company's approach to its people.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to provide a safe and secure environment to
its women employees across its functions, as they are considered as integral and important
part of the Organisation. Your company has in place an Anti-Sexual Harassment Policy in
line with the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013.
In terms of provisions of Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, your
Company has duly adopted a Policy and has also complied with the provisions relating to
the constitution of Internal Complaints Committee (ICC).
There was no case of sexual harassment reported during the year under
review.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to thank the Regulatory and
Government Authorities, Bankers, Business Associates, Shareholders and the Customers of
the Company for their continued support to the Company. The Directors express their deep
sense of appreciation towards all the employees and staff of the Company and wish the
management all the best for achieving greater heights in the future.