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Directors Report of SE Investments Ltd.

Mar 31, 2013

The Directors have pleasure in presenting the Twenty First Annual Report of your Company with the Audited Statement of Accounts for the year ended March 31, 2013.

FINANCIAL HIGHLIGHTS

Your Company''s fnancial performance for the year under review has been encouraging and is summarized below:

Particulars (Rs. In Lacs) (Rs. In Lacs) 2012-13 2011-12

Total Income 21904.28 21098.39

Less: Expenditure 5196.55 3825.30

Proft before Depreciation, Interest & Tax (PBDIT) 16707.73 17273.09

Less: Interest 6261.23 7121.84

Proft before Depreciation & Tax (PBDT) 10446.50 10151.25

Less: Depreciation 57.21 76.24

Proft Before Tax (PBT) 10389.29 10075.01

Less: Provision for Tax 3344.67 3042.98

Proft After Tax (PAT) 7044.62 7032.03

Proft of Resulting Company 696.69

Net Proft After Tax (PAT) 7044.62 6335.34

Add: Proft b/f from the previous year 351.82 936.75

Proft Available for Appropriation 7396.44 7272.09

Dividend Including Tax 487.39 500.45

Provision for Standard Assets 19.70 13.41

Transfer to General Reserve 5000.00 5000.00

Transfer to Reserve Fund (RBI Act) 1408.92 1406.41

Balance Carried to Balance Sheet 480.43 351.82 review of Operations

The Company''s gross income for the fnancial year ended March 31, 2013 increased to Rs. 21904.28 Lacs from Rs. 21098.39 Lacs in the last year registering a growth of over 3.82%.

Proft before Tax (PBT) of the Company increased by 3.12% to Rs. 10389.30 Lacs during the year, up from Rs. 10075.01 Lacs in the last year.

Interest expenses for the year decreased by 12.08% to Rs. 6261.23 Lacs from Rs. 7121.84 Lacs in the last year. Depreciation was at Rs.57.21 Lacs as against Rs. 76.24 Lacs in the last year. Net Proft for the year increased by 11.20% to Rs. 7044.62 Lacs from Rs. 6335.34 Lacs in the last year.

An amount of Rs. 1408.92 Lacs was transferred to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs. 5000 Lacs was transferred to the General Reserve during the year under review. The Company''s Net Worth as on March 31, 2013, stood at Rs. 41894.35 Lacs, as against Rs. 36458.47 Lacs in the last year.

Dividend

Your Directors have recommended a dividend of Re. 1/- (10%) per equity share of Rs. 10/- each which will absorb Rs. 487.39 Lacs (inclusive of dividend tax) for the fnancial year ended March 31, 2013. This dividend, if approved at ensuing Annual General Meeting, will be paid to (i) all those equity share holders whose name appear in the Register of Members as on 24th September, 2013 (ii) to those whose name appear as benefcial owners and are furnished by National Securities Depository Ltd. and Central Depository Services (India) Ltd. for the purpose.

OpErAtIONS

The Financial Year 2012-13 was a year of satisfactory growth and the same is detailed below:

Disbursements

The fnancial year 2012-13 was very signifcant for the Company in creating a strong platfor m for sustained growth. TOTAL DISBURSEMENTS (including fgures of subsidiary) reached Rs. 12870.90 millions during fnancial year 2012- 13, recording 15.36% growth over Rs. 11156.91 millions achieved during fnancial year 2011- 2012. SEIL was successful in augmenting its portfolio without increasing the risk profle, mainly on account of increase in small loans and business loans.

Number of Customers

Total Customer Outreach stood at 561762 being increased by 7.41% as compared to previous year.

Net Worth and Capital to Risk Adjusted Assets Ratio

The Net Worth of the Company improved to Rs. 41894.35 Lacs as on 31st March, 2013 from Rs. 36458.47 Lacs as on 31st March, 2012. The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 39.28% as on 31st March, 2013 as against 36.37% as on 31st March, 2012 which is much above the requirement as stipulated by Reserve Bank of India and is one of the best in the industry.

fIXED DEpOSItS

The fxed deposits of the Company as on 31st March, 2013 stood at Rs. 2040.96 Lacs including accrued interest thereon against last year''s Rs. 2449.99 Lacs. There are Two (2) Unclaimed Matured deposit amounting to Rs. 1.02 Lacs lying with the company as on 31st March, 2013. The Company has decided not to accept/renew public deposit with effect from 1st October, 2012.

CREDIT RATING

The Bank Borrowings of the Company has been assigned rating of "CARE A-" by CARE Limited which denotes "ADEQUATE SAFETY".

tIMELY rEpAYMENt Of LOAN LIABILITIES

The Company has not defaulted in payment of interest and/or repayment of loans to any of the fnancial institutions and /or banks during the year under review.

DIrECtOrS

In terms of Article 115 of the Articles of Association of the Company, Shri Suresh Chand Sharma and Shri Brij Lal Goel, Directors, retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it.

SUBSIDIARY

We have only one subsidiary - M/s Nupur Finvest Private Limited (NBFC).

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors'' Report, Balance Sheet and Proft and Loss account of our subsidiary. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided exemption to companies from complying with Section 212, provided such companies publish the audited consolidated fnancial statements in the Annual Report. Accordingly, the Annual Report 2012-13 does not contain the fnancial statements of our subsidiary but discloses the consolidated fnancial statement giving information of its subsidiary. The audited annual accounts and related information of our subsidiary, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered offce at Delhi.

futurE prOSpECtS

The year 2012-13 has been satisfactory for the Company. While on one hand, Company successfully scaled it operations through improved reach and streamlined business to an ever growing consumer base, on the other hand, it undertake funding initiatives, mitigating interest risk to a large extent.

- SEIL plans to achieve new horizons in the Business loans including Small and Medium Enterprises (SME)/ Priority sector, Lending to Corporates, Individuals , Partnership Firms and others.

- SEIL proposes to open new branches at Bangalore, Pune, Indore, Bhopal, Hyderabad and at other suitable business place.

- The Company is also looking to venture into other activities similar in nature being housing loans for LIG (Low Income Group).

The Company and its subsidiary aims at leveraging the opportunities provided by a growing economy and continues to see healthy growth in its lending activities.

Our Company is continuously improving its performance and looking for new areas for broader development in fnance sector. Through a variety of innovative ideas & initiatives, we are looking at enhancing the fnance facilities for weaker and poor section of the society.

SEIL sees growth opportunities in each of its existing business area and will also be expanding the focus of activities to new areas, arising from the strong growth momentum in the economy.

MANAGEMENt DISCuSSION AND ANALYSIS Of fINANCIAL CONDItION

Management Discussion and Analysis of fnancial conditions and results of operations of the Company for the year under review, as required under Clause 49 of the listing agreement with the Stock Exchanges, is given as a separate statement forming part of the Annual Report.

rESIGNAtION Of DIrECtOrS

During the year Mr. Yashwant Rao Deshmukh and Dr. Shyam Lal Garg resigned from Board of Directors and Committees on 16th May, 2012 and 24th July, 2012 respectively.

AppLICAbILItY Of CONSOrtIuM fINANCING GUIDELINES

Consortium Financing Guidelines issued by Reserve Bank of India during the year is applicable to our Company. Pursuant to these guidelines, Central Bank of India has been appointed as the Lead Bank/Custodian for the same.

GOVErNANCE

Your Company is committed to adhere to the best practice of governance. It is always ensured, that the practices being followed by the Company are in alignment with its philosophy towards Corporate Governance. Your Company believes that the Corporate Governance is all about effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. In your Company, prime importance is given to reliable fnancial information, integrity, transparency, fairness, empowerment and compliance with law in letter and spirit.

Your Company proactively follows Government principles and practices as to meet the business and regulatory needs, which has enabled it to emerge as one of the best corporate governed companies of India.

Detailed compliances with the provisions of Clause 49 of the Listing Agreement for the year ended 2012-13 has been given in Corporate Governance Report, which is attached and forms part of this report.

Certifcate from the Statutory Auditor of the Company, M/s R. Lal & Company, Chartered Accountants, confrming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

AuDItOrS & AuDItOrS'' rEpOrt

M/s R. Lal & Company, Chartered Accountants & M/s P M S & Co.,Chartered Accountants, Joint Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received a certifcate from the Auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The Directors recommend the re-appointment of M/s R. Lal & Company, Chartered Accountants & M/s P M S & Co.,Chartered Accountants, as Joint Statutory Auditors of the Company.

The observations of Auditors in their report read with notes to the accounts are self explanatory and do not call for any further explanation.

huMAN rESOurCE DEVELOpMENt AND INDuStrIAL rELAtION

Your company strives to provide the best work environment with ample opportunities to grow and explore. The human resources development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for development of human resources are given in Management Discussion and Analysis Report.

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

pArtICuLArS Of EMpLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure "A" to the Directors'' Report.

DIrECtOrS'' rESpONSIbILItY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confrmed that:

(i) in the preparation of the accounts for the fnancial year ended on March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2013 and of the proft of the Company for the year under review;

(iii) the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

ENErGY CONSErVAtION, tEChNOLOGY AbSOrptION AND fOrEIGN EXChANGE EArNINGS AND OutGO:

After Demerger of Non Conventional Energy Division, Energy Generation Projects stands transferred to S. E. Power Limited (Transferree Company). Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given under S. E. Power Limited Annual Report.

fOrEIGN EXChANGE EArNINGS AND OutGO:

Earnings : NIL

Outgo : 3.73 lacs

ACKNOWLEDGMENtS:

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the co-operation extended by Banks, Government Authorities, Customers, Shareholders and Employees of the Company and looks forward to a continued mutual support and co-operation.

Place : New Delhi Sd/- Sd/-

Date : 2nd September, 2013 (Purushottam Agrawal) (Sunil Agarwal)

Chairman Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Twentieth Annual Report at your Company with the Audited Statement of Accounts for the year ended March 31, 2012.

FINANCIAL HIGHLIGHTS

Your Company's financial performance for the year under review has been encouraging and is summarized below:

(Rs. In Lacs) (Rs. In Lacs) Particulars 2011-12 2010-11

Total Income 21098.39 18143.66

Less: Expenditure 3825.3O 2905.59

Profit before Depreciation, Interest After Tax (PBDIT) 17273.09 15238.07

Less Interest 7121.84 6201.76

Profit before Depreciation & Tax (PBDIT) 10151.75 9036.31

Less: Deprerciation 76.24 427.68

Profit Before Tax (PBT) 10075.01 8608.63

Less: Provision for Tax 3042.98 2527.04

Profit After Tax (PAT) 7037.03 6081.59

Profit of Resulting Company 696.69 -

Net Profit After Tax (PAT) 6335.34 6081.59

Add: Profit b/f from the previous year 936.75 1780.18

Profit Available for Appropriation 7272.09 7861.77

Dividend including tax 500.45 501.92

Provision for Standard Assets 13.41 206.77

Transfer to General Reserve 5000.00 5000.00

Transfer to Reserve Fund (RBI Act) 1406.41 1216.32

Balance Carried to Balance Sheet 351.82 936.76

REVIEW OF OPERATIONS

The Company's gross income for the financial year ended March 31, 2012 increased to Rs. 21038.39 Lacs from Rs. 18143.66 Lacs in the last year registering a growth of over 16.29%.

The operating profit (PBDIT) of the Company increased by 13.35% to Rs. 17273.09 Lacs during the year, up from Rs. 15238.07 Lacs in the last year.

Interest expenses for the year increased by 14.83% to Rs. 7121.84 Lacs from Rs. 6201.76 Lacs in the last year. Depreciation was at Rs. 76.24 Lacs as against Rs. 427.68 lacs in the last year. Net Profit for the year increased by 4.17% to Rs. 6335.34 Lacs from Rs. 6081.59 Lacs in the last year.

An amount of Rs. 1406.41 Lacs was transferred to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs. 5000 Lacs was transferred to the General Resereve during the year under review. The Company's Net Worth as on March 31, 2012, stood at Rs. 36458.47 Lacs, as against Rs. 34984.14 Lacs in the last year.

DIVIDEND

Your Directors have recommended a dividend of Re. 1/- (10%) per equity share of Rs. 10/- each which will absorb Rs. 471.40 Lacs (Inclusive of dividend tax) for the financial year ended March 31, 2012. This dividend, if approved at ensuing Annual General Meeting, will be paid to (i) all those equity share holders whose name appear in the Register of Members as on 21st September, 2012 (ii) to those whose name as beneficial owners, are furnished by National Securities Depository Ltd and Central Depository Services (India) Ltd. for the purpose.

OPERATIONS

The Financial Year 2011-12 was a year of significant growth and the same is detailed below:

Disbursements

The financial year 2011-12 was very significant for the Company in creating a strong platform for sustained growth. TOTAL DISBURSEMENTS (including figures of subsidiary) reached Rs. 11156.91 millions during financial year 2011 12, recording 16.80% growth over Rs. 9552.30 millions achieved during financial year 2010-2011. SEIL was successful in augmenting its portfolio without increasing the risk profile, mainly on account of increase in small loans and business loans.

Number of Customers

Total Customer Outreach stood at 522384 being increased by 37.15% as compared to previous year.

Net Worth and Capital to Risk Adjusted Assets Ratio

The Net Worth of the Company improved to Rs. 36458.47 Lacs as on 31st March, 2012 from Rs. 34984.14 Lacs as on 31st March, 2011. The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 36.37% as on 31st March, 2012 as against 35.87% as on 31st March, 2011 which is much above the requirement as stipulated by Reserve Bank of India and is one of the best in the industry.

FIXED DEPOSITS

The fixed deposits of the Company as on 31st March, 2012 stood at Rs 2449.99 Lacs excluding accrued Interest thereon against last year's Rs. 1884.43. No unclaimed matured deposits are lying with the company as on 31st March, 2012.

CREDIT RATING

The Bank Borrowing and fixed deposit programme of the Company is assigned rating of "CARE A-" & "CARE A" by CARE Limited respectively which denotes "ADEQUATE SAFETY".

TIMELY REPAYMENT OF LOAN LIABILITIES

The Company has not defaulted in payment of interest and/or repayment of loans to any of the financial institutions and/or banks during the year under review.

DIRECTORS

In terms of Article 115 of the Articles of Association of the Company, Shri Purushottam Agrawal and Dr. Arun Gopal Agarwal, Directors, retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. REGULARIZATION OF ADDITIONAL DIRECTORS AS DIRECTORS

Mr. Brij Lal Goel was appointed as Additional Director on 16th May, 2012 and Mr. Dharam Vir Gupta was appointed as Additional Director on 24th July, 2012. As per the provisions of the Section 260 of the Companies Act, 1956, Mr. Brij Lal Goel and Mr. Dharam Vir Gupta holds office upto the date of the forthcoming Annual General Meeting of the Company. The Company has received notice from a member proposing their candidature for the office of Director.

CONSOLIDATION OF EQUITY SHARES

The equity shares of the company were consolidated from Ten Equity Shares of the face value of Re. 1/- each into One Equity Share of the face value of Rs. 10/- each in the meeting of the Board of Directors of the company held on 24th September, 2011, pursuant to the Special Resolution passed by the shareholders of the Company on 29th August, 2011. Record Date for consolidation was 5th October, 2011 as decided in the meeting of Board of Directors of the Company.

SCHEME OF ARRANGEMENT AMONGST S. E. INVESTMENTS LIMITED, S.E. POWER LIMITED AND THEIR RESPECTIVE SHAREHOLDERS

The Board of Directors of your company has approved the Scheme of Arrangement amongst M/s. S. E. Investments Ltd. (Transferor Company), M/s. S. E. Power Ltd. (Transferee Company) and their Respective Shareholders in its meeting held on 19th November, 2010. The Appointed Date for the said Scheme has been fixed as 30.09.2010. The requisite majority of the Equity Shareholders, the Secured Creditors and the Unsecured Creditors & Fixed Deposit Holders of the Company in their respective meetings convened on 9th April, 2011 by order of Hon'ble High Court of Delhi Dated 23rd February, 2011 have approved the said Scheme of Arrangement Hon'ble High Court of Delhi has approved the Scheme of Arrangement on 1st November, 2011.

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve flank of India as applicable to it.

SUBSIDIARY

We have only one subsidiary - M/s. Nupur Finvest Private Limited (NBFC).

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' Report. Balance Sheet and Profit and loss account of our subsidiary. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2011-12 does not contain the financial statements of our subsidiary but discloses the consolidated financial statement giving information of its subsidiary. The audited annual accounts and related Information of our subsidiary, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office at Delhi.

FUTURE PROSPECTS

The year 2011-12 has been a milestone for the Company. While on one hand, Company successfully scaled it operations through improved reach and streamlined business to an ever growing consumer base, on the other hand, it undertake funding initiatives, mitigating interest risk to a large extent.

- SEIL plans to achieve new horizons in the Business loans including Small and Medium Enterprises (SME)/Priority sector, Lending to Corporates, Individuals, Partnership Firms and others.

- SEIL proposes to open new branches at Banglore, Pune and Indore etc.

- The Company is also looking to venture into other activities similar in nature being housing loans for LIG (Low Income Group).

The Company and its subsidiary aims at leveraging the opportunities provided by a growing economy and continues to see healthy growth in its lending activities.

Our Company is continuously improving its performance and looking for new areas for broader development in finance sector. Through a variety of innovative ideas & initiatives, we are looking at enhancing the finance facilities for weaker and poor section of the society.

SEIL sees growth opportunities in each of its existing business area and will also be expanding the focus of activities to new areas, arising from the strong growth momentum in the economy.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

Management Discussion and Analysis of financial conditions and results of operations of the Company for the year under review, as required under Clause 49 of the listing agreement with the Stock Exchanges, is given as a separate statement forming part of the Annual Report.

GOVERNANCE

Your Company is committed to adhere to the best practice of governance. It is always ensured, that the practices being followed by the Company are in alignment with its philosophy towards Corporate Governance Your Company believes that the Corporate Governance is all about effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. In your Company, prime importance is given to reliable financial information, integrity, transparency, fairness, empowerment and compliance with law in letter and spirit.

Your Company proactively follows Government principles and practices as to meet the business and regulatory needs, which has enabled it to emerge as one of the best corporate governed companies of India.

Detailed compliances with the provision of Clause 49 of the Listing Agreement for the year ended 2011-12 has been given in Corporate Governance Report, which is attached and forms part of this report

Certificate from the Statutory Auditor of the Company, M/s. R. Lal & Company, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

AUDITORS & AUDITORS' REPORT

M/s. R. Lal & Company, Chartered Accountants & M/s. P M S & Co. Chartered Accountants, Joint Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a certificate from the Auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The Directors recommend the re-appointment of M/s. R. Lal & Company, Chartered Accountants & M/s. P M S & Co., Chartered Accountants, as Joint Statutory Auditors of the Company.

The observations of Auditors in their report read with notes to the accounts are self explanatory and do not call for any further explanation.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your company strives to provide the best work environment with ample opportunities to grow and explore. The human resources development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for development of human resources are given in Management Discussion and Analysis Report.

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure "A" to the Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of The Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year ended on March 31, 2012, the applicable standards have been followed along with proper explanation relating to material departures.

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year under review.

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

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

After Demerger of Non Conventional Energy Division, Energy Generation Projects stands transferred to S. E. Power limited (Transferree Company). Particulars required to be furnished under the Company (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given under S. E. Power Limited Annual Report. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings NIL

Outgo NIL

ACKNOWLEDGMENTS:

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees of imp Company and the co-operation extended by Banks, Government Authorities, Customers, Shareholders and Employees of the Company and looks forward to a continued mutual support and co-operation.

Sd/- Sd/-

(Purushottam Agrawal) (Sunil Agarwal) Chairman Managing Director

Place : New Delhi Date : 21st August, 2012


Mar 31, 2011

TO THE MEMBERS,

The Directors have pleasure in presenting the Nineteenth Annual Report of your Company with the Audited Statement of Accounts for the year ended March 31, 2011.

FINANCIAL HIGHLIGHTS

Your Company's financial performance for the year under review has been encouraging and is summarized below:

(Rs. In Lacs)

Particulars 2010-11 2009-10

Total Income 18143.66 8816.56

Less: Expenditure 2905.59 1469.68

Profit before Depreciation, Interest & Tax (PBDIT) 15238.07 7346.88

Less: Interest 6201.76 3704.02

Profit before Depreciation & Tax (PBDT) 9036.31 3642.86

Less: Depreciation 427.68 408.89

Profit Before Tax (PBT) 8608.63 3233.97

Less: Provision for Tax 2527.04 600.42

Profit After Tax (PAT) 6081.59 2633.55

Add: Profit b/f from the previous year 1780.18 63.90

Profit Available for Appropriation 7861.77 2697.45

Dividend Including Tax 501.92 90.56

Provision for Standard Assets 206.77 -

Transfer to General Reserve 5000.00 300.00

Transfer to Reserve Fund (RBI Act) 1216.32 526.71

Balance Carried to Balance Sheet 936.76 1780.18



REVIEW OF OPERATIONS

The Company's gross income for the financial year ended March 31, 2011 increased to Rs. 18143.66 Lacs from Rs. 8816.56 Lacs in the last year registering a growth of over 106 Percent.

The operating profit (PBDIT) of the Company increased by 107 percent to Rs. 15238.07 Lacs during the year, up from Rs. 7346.88 Lacs in the last year.

Interest expenses for the year increased by 67 percent to Rs. 6201.76 Lacs from Rs. 3704.02 Lacs in the last year. Depreciation was at Rs. 427.68 Lacs as against Rs. 408.89 Lacs in the last year. Net Profit for the year increased by 131 percent to Rs. 6081.59 Lacs from Rs. 2633.55 Lacs in the last year.

An amount of Rs. 1216.32 Lacs was transferred to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs. 5000 Lacs was transferred to the General Reserve during the year under review. The Company's Net Worth as on March 31, 2011, stood at Rs. 34984.14 Lacs, as against Rs. 30076.40 Lacs in the last year.

DIVIDEND

The Board of Directors had declared Interim dividend @ 10% (Re. 0.20/- per share) on the equity share capital of the Company in the month of July, 2010. The said dividend also has been paid to the shareholders.

Your Directors recommend that the aforesaid interim dividend of Re. 0.20/- per share be declared as final dividend for the year ended 31st March, 2011.

OPERATIONS

The Year 2010-11 was a year of significant growth and the same is detailed below:

Disbursements

The financial year 2010-11 was very significant for the Company in creating a strong platform for sustained growth. TOTAL DISBURSEMENTS reached Rs. 9359 millions during financial year 2010-11, recording 78.20 % growth over Rs. 5252 millions achieved during financial year 2009-2010. SEIL was successful in augmenting its portfolio without increasing the risk profile, mainly on account of increase in micro finance loans and business loans. The emphasis on micro finance disbursements for agriculture and other activities continued in the year under review.

Number of Customers

Total Customer Outreach has increased by 38.92% to 381311 as compared to previous year.

Net Worth and Capital to Risk Adjusted Assets Ratio

The Net Worth of the Company improved to Rs. 34984.14 Lacs as on 31st March, 2011 from Rs. 30076.40 Lacs as on 31st March 2010. The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 35.87% as on 31st March, 2011 as against 67.24% as on 31st March 2010, which is much above the requirement as stipulated by Reserve Bank of India and is one of the best in the industry.

FIXED DEPOSITS

The fixed deposits of the Company as on 31st March 2011 stood at Rs. 1884.43 Lacs excluding accrued interest thereon against last year's Rs. 1305.17 Lacs. There are eight unclaimed matured deposits lying with the company amounting to Rs. 2.97 Lacs as on 31st March 2011.

CREDIT RATING

The Borrowing and fixed deposit programme of the Company assigned a rating of "CARE A-" & "CARE A" by CARE Limited respectively which denotes "ADEQUATE SAFETY".

TIMELY REPAYMENT OF LOAN LIABILITIES

The Company has not defaulted in payment of interest and/or repayment of loans to any of the financial institutions and /or banks during the year under review.

DIRECTORS

In terms of Article 115 of the Articles of Association, Shri Suresh Chand Sharma and Dr. Arun Gopal Agarwal, Directors, retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

SUB DIVISION OF EQUITY SHARES

The equity shares of the company were subdivided from One Equity Share of the face value of Rs. 2/- each to Two Equity Shares of the face value of Re. 1/ each in the meeting of the Board of Directors of the company held on 5th July, 2010, pursuant to the Special Resolution passed by the shareholders of the Company on 13th September, 2010. Record Date for subdivision was 1st November, 2010 as decided in the meeting of Board of Directors of the Company on 18th October 2010.

SCHEME OF ARRANGEMENT AMONGST S. E. INVESTMENTS LIMITED, S. E. POWER LIMITED AND THEIR RESPECTIVE SHAREHOLDERS

During the year under reporting, the Board of Directors of your Company has approved the Scheme of Arrangement amongst M/s S. E. Investments Ltd. (Transferor Company), M/s S. E. Power Ltd. (Transferee Company) and their Respective Shareholders in its meeting held on 19th November, 2010. The Appointed Date for the said Scheme has been fixed as 30.09.2010. Pursuant to the said Scheme, Transferee Company shall issue and allot 405,600,000 Equity Share of Re. 1 each as fully paid up to the shareholders of Transferor Company in proportion of the shares held by them in the Transferor Company. The following are some of the benefits, which would arise upon the Scheme coming into effect:

(a) Each of the above businesses will offer great potential for growth;

(b) The Financial Service business and Micro Credit business, being separately identifiable businesses, requires focus and dedicated management with special skills and strategic alliances in order to be run efficiently and successfully to achieve desired growth.

The demerger of the Non-Conventional Energy Division from Transferor Company would enable Transferor Company to focus on the Financial Service Business and Micro Credit Business so that it could be run more efficiently and successfully to achieve desired growth.

(c) Nature of risks, competition involved and commercial requirements of all the three businesses of Transferor Company are entirely distinct from each other.

(d) The demerger of the Non-Conventional Energy Division would enable distinct focus of shareholders. Thus, the demerger would enable Non-Conventional Energy Division to attract different sets of investors, strategic partners, lenders and other stake holders who would provide further funding and bring relevant experience for high growth of the businesses. The demerger would also provide scope for independent collaboration and expansion in each of the businesses without committing the other business and will create enhanced value for shareholders and allow a focused strategy in operation.

(e) The demerger of Non-Conventional Energy Division of Transferor Company is in overall interest of shareholders and is in no way prejudicial to the interest of creditors.

The Company has obtained the approval for the said Scheme of Arrangement from all the Stock Exchanges, where the shares of the Company are listed, under clause 24 (f) of the Listing Agreement. The requisite majority of the Equity Shareholders, the Secured Creditors and the Unsecured Creditors of the Company in their respective meetings convened on 9th April, 2011 by order of Hon'ble High Court of Delhi dated 23rd February 2011 have approved the said Scheme of Arrangement. Now the matter is pending before Hon'ble Delhi High Court to sanction the said Scheme of Arrangement.

A DECISION OF HON'BLE DELHI HIGH COURT IN FAVOUR OF THE COMPANY IN THE MATTER OF STAMP DUTY ON INCREASED AUTHORISED SHARE CAPITAL

The Company has increased its Authorized Share Capital as approved by you in the Extra-Ordinary General Meeting held on 15.01.2010 and subsequently filed e-form 5 with the Registrar of Companies (ROC), NCT of Delhi & Haryana. As there is no provision in the Indian Stamp (Delhi Amendment) Act, 2007 to pay the stamp duty on the increase in the authorized share capital, the Company did not paid the stamp duty on the same and requested the ROC Office to give effect to the increase in share capital of the Company. The Company further pointed out to ROC officials that stamp duty on increased authorized share capital is outside their jurisdiction and charging the same is illegal, and also the provision for this effect on the web-site of the Ministry of Corporate Affairs being illegal cannot call for illegal levy. It is not only contrary to the law but also misleads the general public having access of information on the official web-site of the Ministry of Corporate Affairs which forces them to pay a duty which is not payable and thus the software of Ministry of Corporate Affairs requires amendment and modification.

However, the Registrar of Companies directed our Company to pay stamp duty on increased authorized share capital thereby prompting our Company to move to the Hon' ble Delhi High Court at New Delhi.

In this regard the Company filed a writ petition no. (C) 2393/2010 against Union of India & Others before the Hon'ble High Court of Delhi at New Delhi on dated 08.04.2010.

Further the Hon'ble High Court of Delhi at New Delhi disposed off the same in favour of our Company on 21.04.2011 and vide its judgment informed that "in the absence of an express provision in the Act permitting levy of stamp duty on the increase in authorised share capital, it is not possible to legally sustain impudent demand and also directed that the Respondent (Registrar of Companies, NCT of Delhi & Haryana) to accept the Petitioner's (M/s S. E. Investments Ltd.) E-Form 5 and record the increased authorized share capital without insisting on the Petitioner paying stamp duty thereon".

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it.

ACQUISITION OF RBI REGISTERED NBFC COMPANY AS WHOLLY OWNED SUBSIDIARY

For the sake and benefit of Micro Finance borrowers and for proper monitoring and regulation of micro finance business, RBI constituted a committee `Malegam Committee' which submitted its recommendations on 19th Jan. 2011 and accepted the implementation of the same in the month of May, 2011. However your Company is already operating within the limits, except the condition of 90% assets relating to Micro Finance to qualify as NBFC-MFI. The strategic move to acquire the Nupur Finvest Pvt. Ltd. as wholly owned subsidiary of the Company is the answer to the likely change in the regulations.

SUBSIDIARY

We have only one subsidiary - M/s Nupur Finvest Private Limited (NBFC).

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' Report, Balance Sheet and Profit and Loss account of our subsidiary. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2010-11 does not contain the financial statements of our subsidiary but discloses the consolidated financial statement giving information of its subsidiary. The audited annual accounts and related information of our subsidiary, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Delhi

OPENING OF NEW BRANCH OFFICE AT BAREILLY, UTTAR PRADESH

To expand its Micro Finance business, the company has opened a new Branch Office at Bareilly, Uttar Pradesh which has become fully operational during the fourth quarter.

FUTURE PROSPECTS

The year 2010-11 has been a milestone year for the Company. While on one hand, Company successfully scaled it operations through improved reach and streamlined business to an ever growing consumer base, on the other hand, it undertake funding initiatives, mitigating interest risk to a large extent.

- SEIL plans to achieve new horizons in the Business loans including small and medium enterprises (SME)/ Priority sector Lending to Corporates, Individuals , partnership firms and others and visualize a size of Rs. 1000 Crores disbursement portfolio by the next year.

- SEIL proposes to open new branches at Banglore, Pune, Indore etc.

- By the acquisition of 100% subsidiary, we as a group plans to access 500000 customers by the next 1 year through various Micro finance schemes.

- The Company is also looking to venture into other activities similar in nature being housing loans for LIG (Low Income Group), Gold finance which is highly secured in nature.

The Company and its subsidiary aims at leveraging the opportunities provided by a growing economy and continues to see healthy growth in its lending activities.

Our Company is continuously improving its performance and looking for new areas for broader development in finance sector. Through a variety of innovative ideas & initiatives we are looking at enhancing the finance facilities for weaker and poor section of the society.

SEIL sees growth opportunities in each of its existing business area and will also be expending the focus of activities to new areas, arising from the strong growth momentum in the economy.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

Management Discussion and Analysis of financial conditions and results of operations of the Company for the year under review, as required under Clause 49 of the listing agreement with the Stock Exchanges, is given as a separate statement forming part of the Annual Report.

GOVERNANCE

Your Company is committed to adhere to the best practice of governance. It is always ensured, that the practices being followed by the Company are in alignment with its philosophy towards Corporate Governance. Your Company believes that the Corporate Governance is all about effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. In your Company, prime importance is given to reliable financial information, integrity, transparency, fairness, empowerment and compliance with law in letter and spirit.

Your Company proactively follows Government principles and practices as to meet the business and regulatory needs, which has enabled it to emerge as one of the best corporate governed companies of India.

Detailed compliances with the provisions of Clause 49 of the Listing Agreement for the year ended 2010-11 has been given in Corporate Governance Report, which is attached and forms part of this report.

Certificate from the Statutory Auditor of the Company, M/s R. Lal & Company, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

AUDITORS & AUDITORS' REPORT

M/s R. Lal & Company, Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The Directors recommend the re-appointment of M/s R. Lal & Company, Chartered Accountants, as Auditors of the Company.

The observations of Auditors in their report read with notes to the accounts are self explanatory and do not call for any further explanation.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your company strives to provide the best work environment with ample opportunities to grow and explore. The human resources development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for development of human resources are given in Management Discussion and Analysis Report

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure "A" to the Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the year under review;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

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

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

- With regard to the Non-Conventional Energy Generation Projects of the Company, the required measures are taken from time to time for conservation of energy and technology absorption.

ACKNOWLEDGEMENT:

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the cooperation extended by Banks, Government Authorities, Customers, Shareholders and Employees of the Company and looks forward to a continued mutual support and co-operation.

sd/- sd/- Place : New Delhi (Purushottam Agrawal) (Sunil Agarwal) Date : 25th July, 2011 Chairman Managing Director


Mar 31, 2010

The Directors have pleasure in presenting the Eighteenth Annual Report of your Company with the Audited Statement of Accounts for the year ended March 31, 2010.

FINANCIAL HIGHLIGHTS

Your Companys financial performance for the year under review has been encouraging and is summarized below:

(Rs. in lacs)

Particulars 2009-10 2008-09

Total Income 8836.45 4891.16

Less: Expenditure 1489.57 1156.32

Profit before Depreciation, Interest & Tax (PBDIT) 7346.88 3734.84

Less: Interest 3704.02 1776.31

Profit before Depreciation & Tax (PBDT) 3642.86 1958.53

Less: Depreciation 408.89 252.57

Profit Before Tax (PBT) 3233.97 1705.96

Less: Provision for Tax 600.42 327.83

Profit After Tax (PAT) 2633.55 1378.13

Add: Profit b/f from the previous year 63.90 55.95

Profit Available for Appropriation 2697.45 1434.08

Dividend Including Tax 90.56 44.19

Transfer to General Reserve 300.00 1050.00

Transfer to Reserve Fund (RBI Act) 526.71 276.00

Balance Carried to Balance Sheet 1780.18 63.89

REVIEW OF OPERATIONS

The Companys gross income for the financial year ended March 31, 2010 increased to Rs. 8836.45 Lacs from Rs. 4891.16 Lacs in the last year registering a growth of over 80 Percent.

The Operating Profit (PBDIT) of the Company increased by 96.71 percent to Rs. 7346.88 Lacs during the year, up from Rs. 3734.84 Lacs in the last year.

Interest expenses for the year increased by 108.52 percent to Rs. 3704.02 Lacs from Rs. 1776.31 Lacs in the last year.

Depreciation was at Rs. 408.89 Lacs as against Rs. 252.57 Lacs in the last year. Net Profit for the year increased by 91.09 percent to Rs. 2633.55 Lacs from Rs. 1378.13 Lacs in the last year.

An amount of Rs. 526.71 Lacs was transferred to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, and an amount of Rs. 300.00 Lacs was transferred to the General Reserve during the year under review. The Companys Net Worth as on March 31, 2010, stood at Rs. 30076.40 Lacs, as against Rs. 6982.54 Lacs in the last year.

FUTURE PROSPECTS

The year 2009-10 has been a milestone year for the Company. While on one hand, Company successfully scaled it operations through improved reach and streamlined business to an ever growing consumer base, on the other hand, it undertake funding initiatives, mitigating interest risk to a large extent.

- SEIL proposes to start providing third Party Products like insurance.

- By March 2011, SEIL envisages to reach over 4,00,000 households through various microfinance schemes.

- The Company is also looking to venture into other activities similar in nature being housing loans for LIG (Low Income Group), Gold finance which is highly secured in nature compared to its unsecured Micro Credit Scheme etc.

The Company aims at leveraging the opportunities provided by a growing economy and continues to see healthy growth in its lending activities.

Our Company is continuously improving its performance and looking for new areas for broader development in finance sector. Through a variety of innovative ideas & initiatives we are looking at enhancing the finance facilities for weaker and poor section of the society.

SEIL sees growth opportunities in each of its existing business area and will also be expending the focus of activities to new areas, arising from the strong growth momentum in the economy.

DIVIDEND

The Board of Directors had declared Interim dividend @ 10% (Re. 1/- per share) on the equity share capital of the Company in the month of January, 2010. The said dividend also has been paid to the shareholders.

Your Directors recommend that the aforesaid interim dividend of Re. 1/- per share be declared as final dividend for the year ended 31st March, 2010.

LISTING OF SHARES AT NSE

During the year under review, the Company has listed its equity shares at National Stock Exchange of India Limited (NSE).

LISTING OF GLOBAL DEPOSITARY RECEIPTS

During the year under review, the Company has listed its Global Depositary Receipts at Luxembourg Stock Exchange.

CHANGE IN SHARE CAPITAL

The Authorised Capital of the Company was increased from Rs. 60,000,000/- (Rupees Six Crore Only) divided into 3,500,000 (Thirty Five Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each and 2,500,000 (Twenty Five Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each to 85,000,000/- (Rupees Eight Crore Fifty Lacs Only) divided into 6,000,000 (Sixty Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each and 2,500,000 (Twenty Five Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each vide Honble Delhi High Court Order dated 09.10.2009 approving the Scheme of Amalgamation of Unnati Financial Services Private Limited (Transferor Company) with S. E. Investments Limited (Transferee Company).

Accordingly, the Company has issued and allotted 2,100,000 (Twenty One Lacs) Equity Shares of Rs. 10/- each on 4th November 2009 at a price of Rs. 10 /- each to the Shareholders of the transferor Company i.e. M/s Unnati Financial Services Private Limited.

The Shareholders of the Company in their Extra Ordinary General Meeting held on 15th January, 2010 has further increased its Authrorised Share Capital from 85,000,000/- (Rupees Eight Crore Fifty Lacs Only) divided into 6,000,000 (Sixty Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each and 2,500,000 (Twenty Five Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each to 1,250,000,000/- (Rupees One Hundred and Twenty Five Crore Only) divided into 120,000,000 (Twelve Crore) Equity Shares of Rs. 10/- (Rupees Ten) each and 5,000,000 (Fifty Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each.

Further the Company allotted 4,900,000 (Forty Nine Lacs) equity shares of Rs. 10/- each underlying 2,450,000 Global Depositary Receipts (GDRs) on 10th March, 2010 at the offer price of USD 15.86 per GDR equivalent to Rs.360.10 per equity share. Through this, the Company has raised total proceeds of USD 38.86 million (equivalent to Rs. 1764 million). Each GDR represents 2 Equity Shares of Face Value of Rs. 10/- each fully paid up of the Company. These GDRs are listed at Luxembourg Stock Exchange. The Equity Shares underlying the GDRs are listed on the Bombay Stock Exchange Limited & National Stock Exchange of India Limited.

The equity shares of the company were subdivided from One Equity Share of the face value of Rs. 10/- each to Five Equity Shares of the face value of Rs. 2/ each in the meeting of the Board of Directors of the company held on 20th March, 2010, pursuant to the Special Resolution passed by the shareholders of the Company on 15th January, 2010. The effect of sub-division has not been reflected in the Balance Sheet because the record date for conversion was fixed on 6th April 2010 after the close of financial year.

ISSUE OF GLOBAL DEPOSITARY RECEIPTS (GDR)

On March 10, 2010 the Company raised 2,450,000 GDRs at the offer price of USD 15.86 per GDR equivalent to Rs. 360.10 per share. Through this, the Company has raised total proceeds of USD 38.86 million (equivalent to Rs. 1764 million). Each GDR represents 2 equity shares of face value of Rs. 10/- each fully paid up of the Company. The pricing of GDRs is governed by issue of “Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993” and guidelines issued by Central Government there under from time to time, various notifications and regulations issued by Reserve Bank of India under Foreign Exchange Management Act, 1999 or any other authorities or regulators.

SUB DIVISION OF EQUITY SHARES

The equity shares of the company were subdivided from One Equity Share of the face value of Rs. 10/- each to Five Equity Shares of the face value of Rs. 2/ each in the meeting of the Board of Directors of the company held on 20th March, 2010, pursuant to the Special Resolution passed by the shareholders of the Company on 15th January, 2010. The effect of sub-division has not been reflected in the Balance Sheet because the record date for conversion was fixed on 6th April 2010 after the close of financial year.

ISSUE OF BONUS SHARES

The Board of Director of the Company at their Meeting held on 20.05.2010 has issued and allotted 152,100,000 Equity Shares of Rs. 2/- each as bonus shares in the ratio of 3:1 to its shareholders.

CHANGE OF CORPORATE OFFICE

The Board of Directors at their meeting held on 11.11.2009 has decided to shift the Corporate Office of the Company from 5D, Atmaram House-1, Tolstoy Marg, New Delhi-110001 to M-7, Ist Floor, M Block Market, Greater Kailash, Part-2, New Delhi-110048.

SCHEME OF AMALGAMATION OF UNNATI FINANCIAL SERVICES PRIVATE LIMITED WITH THE COMPANY

Pursuant to the Scheme of Amalgamation (the scheme) of the erstwhile Unnati Financial Services Private Limited with the Company as approved by you in the meetings held on 25th April, 2009 and subsequently sanctioned by Delhi High Court vide its order dated 24th Sep. 2009, which became effective on 4th Nov. 2009, the assets and liabilities of erstwhile Unnati Financial Services Private Limited stand transferred to and vested in the Company with effect from the appointed date i.e. 31st Aug. 2008, Accordingly the scheme has been given effect to in the accounts.

ALTERATION IN MEMORANDUM AND ARTICLES OF ASSOCIATION

As approved by you in Extra Ordinary General Meeting dated 15.01.2010, your Company has altered in its Memorandum and Articles of Association as follows:

Increase in Authorised Share Capital

V. The Authorised Share Capital of the Company is Rs. 1,250,000,000/- (Rupees One Hundred and Twenty Five Crores Only) divided into 120,000,000 (Twelve Crores) Equity Shares of Rs. 10/- (Rupees Ten) each and 5,000,000 (Fifty Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each.

The Company is authorised to vary, increase or reduce the share capital and attach such privileges and rights to the shares as it may be authorised to do in accordance with the provisions of the Companies Act, 1956."

Sub-division of share in the Board Meeting held on 20th March, 2010

V. The Authorised Share Capital of the Company is Rs. 1,250,000,000/- (Rupees One Hundred and Twenty Five Crores Only) divided into 600,000,000 (Sixty Crores) Equity Shares of Rs. 2/- (Rupees Two) each and 5,000,000 (Fifty Lacs) Preference Shares of Rs. 10/- (Rupees Ten) each.

The Company is authorised to vary, increase or reduce the share capital and attach such privileges and rights to the shares as it may be authorised to do in accordance with the provisions of the Companies Act, 1956.”

Authorization to Board for Capitalization of Profits

138. (1) Subject to the provisions of the Act and regulations made there under or any other applicable law / guidelines, any Board Meeting may resolve that any amount standing to the credit of the Share Premium Account or the Capital Redemption Reserve Account or any money, investments or other assets forming part of the undivided profits (including profits or surplus money arising from the realization and, where permitted by law, from the appreciation in value of any capital assets of the Company) standing to the credit of the General Reserve or Reserve Fund or any other Reserve or Fund of the Company or in the hands of the Company and available for dividend, be capitalized:

(a) by issue and distribution as fully paid up shares, of the Company as Bonus Shares; or

(b) by crediting shares of the Company which may have been issued to and are not fully paid up with the whole or any part of the sum remaining unpaid thereon.

Provided that any amount standing to the credit of the Share Premium Account, Capital Redemption Reserve Account and free Reserves only shall be applied in crediting the payment of capital on shares of the Company to be issued to members (as therein provided) as fully paid Bonus Shares.

2) Such issue and distribution under sub-clause (1)(a) above and such payment to credit of unpaid capital under sub-clause (1)(b) above shall be made to, among and in favour of the members or any class of them or any of them entitled thereto and in accordance with their respective rights and interests and in proportion to the amount of capital paid up on the shares held by them respectively in respect of which such distribution under sub clause (1)(a) or payment under sub clause (1)(b) above, shall be made on the footing that such members become entitled thereto as capital.

3) The Directors shall give effect to any such resolution and apply such portion of the profits, General Reserve or Reserve Fund or any other fund or account as aforesaid as may be required for the purpose of making payment in full for the shares, debentures or debentures stock, bonds or other obligations of the Company so distributed under sub-clause (1)(a) above or (as the case may be) for the purpose of paying, in whole or in part, the amount remaining unpaid on the shares which may have been issued and are not fully paid up under sub-clause (1)(b) above; provided that no such distribution or payment shall be made unless recommended by the Directors and, if so recommended, such distribution and payment shall be accepted by such members as aforesaid in full satisfaction of their interest in the said capitalized sum.

4) For the purpose of giving effect to any such resolution, the Directors may settle any difficulty which may arise in regard to the distribution or payment as aforesaid, as they think expedient, in particular, they may issue fractional certificates and they may fix the value for distribution of any specific assets and may determine that cash payment be made to any members on the footing of the value so fixed and may vest any such cash, shares, debentures, debenture stock, bonds or other obligations in trustees upon such trusts for the persons entitled thereto as may seem expedient to the directors and generally may make such arrangements for the acceptance, allotment and sale of shares, debentures, debenture stock, bonds or other obligations and fractional certificates or otherwise as they may think fit.

5) Subject to the provisions of the Act and these Articles, in cases where some of the shares of the company are fully paid and others are partly paid, only such capitalization may be effected by the distribution of further shares in respect of the fully paid shares, and by crediting the partly paid shares with the whole or part of the unpaid liability thereon but, so that, as between the holders of fully paid shares, and the partly paid shares the sums so applied in the payment of such further shares and in the extinguishments or diminution of the liability on the partly paid shares shall be so applied pro-rata in proportion to the amount then already paid or credited as paid on the existing fully paid or partly paid shares respectively.

6) When deemed requisite, a proper contract shall be filed in accordance with the Act and the Board may appoint any person to sign such contract on behalf of the members entitled, as aforesaid and such appointment shall be effective.

7) The powers and provisions stated herein before shall not be in contradiction or violation of the provisions of Companies Act 1956 and regulation made there under or any other applicable laws or guidelines for the time being in force."

Insertion of Article to enable the company to issue inter-alia any Depositary receipts

65a. The Company may issue Loan Stock, Global Depositary Receipts (GDRs), American Depositary Receipts (ADRs), Share Warrants or any other security convertible into or exchangeable for the shares of the company or conferring the right to allotment or the option of right to call for allotment of shares of the company, securities linked to equity shares securities with warrants, including Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Exchangeable Bonds(FCEBs) subject to and in accordance with, applicable laws, including provisions of the Companies Act 1956 ,the Securities and Exchange Board of India (SEBI) guidelines, regulations and instructions and subject to other applicable legal and regulatory provisions to any eligible person, including Qualified Institutional Buyers foreign/ resident investors Indian and or Multinational Financial Institution, Mutual Funds, Banks, Non-Resident Indians, Stabilizing Agents or any other categories of investors, whether they be holders of shares of the Company or not."

Deletion of IInd Paragraph of Article No. 57

The Company may (subject to the provisions of Section 78, 80, 100 to 105 of the Act.), from time to time by Special Resolution reduce its capital redemptions reserve account or premium account in any manner for the time being authorized by law, and in particular capital may be paid off on the footing that it may be called up again or otherwise. This article is not to derogate from any power the Company would have it were omitted and is hereby deleted.

OPERATIONS

The Year 2009-10 was a year of significant growth and the same is detailed below:

Disbursements

The financial year 2009-10 was very significant for the Company in creating a strong platform for sustained growth. TOTAL DISBURSEMENTS reached Rs. 5252.00 million during financial year 2009-10, recording 132% growth over Rs. 22606 Lacs achieved during financial year 2008-2009. SEIL was successful in augmenting its portfolio without increasing the risk profile, mainly on account of increase in micro finance loans and SME & Trade loans. The emphasis on micro finance disbursements for agriculture and other activities continued in the year under review and the same will continue in future also.

No. of Customers

As on 31st March, 2010 the outreach of customers are 2.74 Lacs and on 30th June, 2010 over 2.97 Lacs.

Net Worth and Capital to Risk Adjusted Assets Ratio

The Net Worth of the Company improved to Rs 30076.40 Lacs as on 31st March, 2010 from Rs. 6982.54 Lacs as on 31st March 2009. The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 67.24% as on 31st March, 2010 as against 30.91% as on 31st March 2009, which is much above the requirement as stipulated by Reserve Bank of India and is one of the best in the industry.

FIXED DEPOSITS

The fixed deposits of the Company as on 31/03/2010 stood at Rs. 1305.17 Lacs excluding accrued interest thereon against last years Rs. 903.46 Lacs. There is only one unclaimed matured Deposits lying with the company amounting to Rs. 1.14 Lacs as on 31.03.2010.

TIMELY REPAYMENT OF LOAN LIABILITIES

The Company has not defaulted in payment of interest and/or repayment of loans to any of the financial institutions and /or banks during the year under review.

CREDIT RATING

The Borrowing and fixed deposit programme of the Company assigned a rating of “CARE A-" & “CARE A" by CARE Limited respectively which denotes “ADEQUATE SAFETY”. Keeping in view the micro finance operations the rating assigned by Micro-Credit Ratings International Limited (MCRIL) to your Company is a+ denoting "HIGH SAFETY,GOOD SYSTEMS HIGHLY RECOMMENDED".

DELISTING OF SHARES

Since the Companys shares are listed at NSE and BSE both, hence during the Year the Shares of the Company were delisted from:

1. Delhi Stock Exchange Limited, New Delhi w.e.f 09.09.2009

2. Ahmedabad Stock Exchange Limited, Ahmedabad w.e.f 20.09.2009

3. Uttar Pradesh Stock Exchange Association Limited, Kanpur w.e.f 14.12.2009

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

Management Discussion and Analysis of financial conditions and results of operations of the Company for the year under review, as required under Clause 49 of the listing agreement with the Stock Exchanges, is given as a separate statement forming part of the Annual Report.

DIRECTORS

Under the Provisions of Section 260 of the Companies Act, 1956 and Article 107 of Articles of Association of the Company, Shri Yashwant Rao Deshmukh was appointed as an Additional Director, with effect from July 12, 2010. He shall hold office up to the date of the ensuing Annual General Meeting.

The Company has received a notice in writing from a member proposing the candidature of Shri Yashwant Rao Deshmukh for the office of a Director, liable to retire by rotation.

Shri Sanjay Agarwal, resigned from the office of the Director of the Company with effect from July 12, 2010. The Board records its appreciation for the valuable contribution made by him during his tenure as Director of the Company.

In terms of Article 115 of the Articles of Association, Shri Purushottam Agrawal and Dr. Shyam Lal Garg, retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting.

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve Bank of India as applicable to it.

SUBSIDIARIES

The Company does not have any subsidiary.

CORPORATE GOVERNANCE

Your Company is committed to adhere to the best practice of governance. It is always ensured, that the practices being followed by the Company are in alignment with its philosophy towards Corporate Governance. Your Company believes that the Corporate Governance is all about effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. In your Company, prime importance is given to reliable financial information, integrity, transparency, fairness, empowerment and compliance with law in letter and spirit.

Your Company proactively follows Government principles and practices as to meet the business and regulatory needs, which has enabled it to emerge as one of the best corporate governed companies of India.

Detailed compliances with the provisions of Clause 49 of the Listing Agreement for the year ended 2009-10 has been given in Corporate Governance Report, which is attached and forms part of this report.

Certificate from the Auditor of the Company, M/s R. Lal & Company, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

AUDITORS & AUDITORS REPORT:

M/s R. Lal & Company, Chartered Accountants, Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The Directors recommend the re-appointment of M/s R. Lal & Company, Chartered Accountants, as Auditors of the Company.

The observations of Auditors in their report read with notes to the accounts are self explanatory and do not call for any further explanation.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATION

Your company strives to provide the best work environment with ample opportunities to grow and explore. Every initiative and policy of the Company has buy-in of all its employees. The human resources development function of the Company is guided by a strong set of values and policies. The details of initiatives taken by the Company for development of human resources are given in Management Discussion and Analysis Report.

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

PARTICULARS OF EMPLOYEES:

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure "A" to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that

(i) In the preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for the year under review;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts of the Company on a going concern basis.

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

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are as under:

With regard to the Non-Conventional Energy Generation Projects of the Company, the required measures are taken from time to time for conservation of energy and technology absorption.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Earnings: NIL

Outgo: 5.57 Lacs

ACKNOWLEDGMENTS:

The Board of Directors wishes to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the cooperation extended by Banks, Government Authorities, Customers, Shareholders and Employees of the Company and looks forward to a continued mutual support and co-operation.

By Order of the Board of Directors

for S.E. Investments Limited

Date: 13th August, 2010 (Purushottam Agrawal) (Sunil Agarwal)

Place: New Delhi Chairman Managing Director