Notes to Accounts of Paisalo Digital Ltd.

Mar 31, 2018

1. Disclosure of related party transactions:

A. Wholly owned Subsidiary Nupur Finvest Pvt. Limited

B. List of related parties and relationship

Related Party (Relation)

Key Managerial Personnel

Mr. Sunil Agarwal (Managing Director)

Mr. Harish Singh (Executive Director)

Mr. Anoop Krishna (Executive Director)

Relatives of K M P

Mr. Purushottam Agrawal (Father of Mr. Sunil Agarwal)

Mrs. Raj Agarwal (Mother of Mr. Sunil Agarwal)

Mrs. Neetu Agarwal (Spouse of Mr. Sunil Agarwal)

Mrs. Priti Chauhan (Spouse of Mr. Harish Singh)

Mrs. Sushila Devi Chauhan (Mother of Mr. Harish Singh)

Ms. Suniti Agarwal (Daughter of Mr. Sunil Agarwal)

Mr. Shantanu Agarwal (Son of Mr. Sunil Agarwal)

Mr. Pranav Chauhan (Son of Mr. Harish Singh)

C. Enterprises over which significant influence exercised by Key Managerial Personnel/Relatives of Key Managerial Personnel

1. Agarwal Meadows Pvt. Limited 2. Aerotech Aviation India Pvt. Limited

3. Baba Herbals Pvt. Limited 4. Bhavya Electronics and Networks Pvt. Limited

5. Diamond Infradev Pvt. Limited 6. Helios Aviation Pvt. Limited

7. Repartee Infrastructures Pvt. Limited 8. Radiance Techno Powers Company Pvt. Limited

9. SCS Educational Foundation 10. Raj Shiksha Foundation

1 1. Sunil Agarwal HUF 12. Harish Singh HUF

13. P N Agarwal & Sons HUF

Notes:

1. Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

2. No amount has been written off or written back during the year in respect of debt due from or to related parties.

3. Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

4. The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

The management has recognized the Decretal Amount as asset and it is classified under the head ‘Current Assets’ as ‘Arbitration Decree Receivable’ and I00% provision is made against such assets under the head Short Term Provisions. However there is no income accrued or received from such assets during the year.

5. The Company had not taken any exposure in Derivatives during the financial year 2017-18.

6. Disclosure relating to Securitization:

i. The Company has not done securitization of any of its loans & advances to any organization during the financial year 2017-18 and there is no outstanding amount as on Balance Sheet date. Also, the Company has not sold its financial assets to any Securitization/Reconstruction Company for Asset Reconstruction. Further the Company has not undertaken any new assignment transaction during the Financial Year 20I7-I8.

ii. The Company has not purchased any non-performing assets (NPAs) from other NBFCs or financial institutions. However, the Company has repurchased portfolio of ?93.37 Crore from NBFC’s wherein Decree has been awarded against ''65.02 crore by the Arbitrator.

iii. Details of stock sold during the year

b. Capital Market Exposure

The company has not taken any exposure in capital market during the financial year 2017-18, and also the inventory of the company as at 3I^st March 20I8 does not contain any exposure to capital market

c. Details of financing of parent company products : NIL

d. Details of Single Borrower Limit and Group Borrower Limit exceeded by NBFC

The company has adhered to the Prudential Exposure norms as prescribed by RBI and has not given any advances exceeding the limits as prescribed for Single borrower and Group Borrower.

e. Unsecured Advances

The unsecured advances outstanding as at Balance Sheet date are '' 22,259 Lakhs. The Company does not have any loan or advances which are partially secured against any sort of licenses, rights, authorizations charged to the company.

7. Registration obtained from other financial sector regulators:

RBI Registration No. : B-14.02997

Company Identification No. : L6592IDLI992PLCI20483

The company has never been penalized for any non-compliance by financial sector regulators.

8. Bank borrowings of the Company has been assigned rating of “IND A-” by M/s India Ratings & Research Private Limited (A Fitch Group Company) which denotes “Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk”. An additional strength to the Company financials has been added by vouching & assignment of “IVR A/STABLE OUTLOOK” rating by Infomerics Valuation and Rating Private Limited.

9. Unlisted Unsecured Non-Convertible Redeemable Debentures (NCDs):

On 23^rd January 20I8 Company has made allotments of ‘I2.00% Unlisted Unsecured Redeemable INR Denominated Non-Cumulative Non-Convertible Debenture’ of ''I,00,00,000/-(Rupees One Crore) each for an aggregating amount of ''28,00,00,000/- (Rupees Twenty Eight Crores). Term of such NCDs is 60 months from the date of allotment with the call option available with the Company to redeem NCDs after expiry of One Year from the date of allotment in full or part as may be decided by the Board of Directors of the Company.

10. Concentration of Deposits, Advances, Exposures and NPAs:

a. Concentration of Deposits

The Company has not taken any deposits from public

d. Concentration of NPAs

Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan instalments are overdue for more than 3 months and management is of the opinion that its recovery chances are very remote or negligible, the Company writes off these accounts (Net of Future Interest Charges) as bad debts. In all other cases where loan instalments are overdue for more than 3 months the provisioning for non-performing assets is made in compliance with Non-Banking Financial Company Systemically Important Non Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions 20I6, as applicable to the company. As per the RBI Directions dated I^st September 20I6 updated as on 23^rd February 20I8 Company has made general provision of 0.40% of Standard assets. Other directives of Reserve Bank of India have been duly complied with.

11. The Company is domiciled in India and does not have any joint venture, associate or subsidiary abroad.

12. Off Balance Sheet SPVs sponsored:

The Company has not sponsored off Balance Sheet SPVs

Notes:

1. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Company-Systemically Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Direction, 20I6.

2. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments shall be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2017

Note 1 : No amount is payable to Small Scale Industrial Undertakings. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the yearend together with interest paid/payable as required under the Act cannot be furnished.

Note 2 : Figures for the previous year have been regrouped/rearranged/reclassified wherever considered necessary

Note 3. : The company has given corporate guarantee for the loan of Rs. 2,000 Lakhs and Rs. 4,247 Lakhs taken by its wholly owned subsidiary Company from Karnataka Bank and Reliance Capital Limited respectively.

Note 4.: Disclosure of related party transactions

A. Wholly owned Subsidiary - Nupur Finvest Pvt. Ltd.

B. List of related parties and relationship

Related Party (Ration)

Key Managerial Personnel

Mr. Sunil Agarwal (M^anagmg D^irect°^r)

Mr. Harish Singh (Executive Director)

Relatives of K M P

Mr. Purushottam Agrawal (Father of Mr. Sunil Agarwal)

^Mrs. ^{Raj Agarwal} (Mother of Mr. Sunil Agarwal)

^Mrs. ^{Neetu Agarwal} (Spouse of Mr. Sunil Agarwal)

M^rs. u u (Spouse of Mr.Harish Singh)

Mrs. Sushila Devi Chauhan

(Mother of Mr.Harish Singh)

Ms. Suniti Agarwal

Mr. Shantanu Agarwal (^Daug^{hter of} M^r. ^{Sunil A}g^arwal)

(Son of Mr. Sunil Agarwal)

C. Enterprises over which significant influence exercised by Key Managerial Personnel/ Relatives of Key Managerial Personnel

1. Agrim Marketing Pvt. Ltd 2. Agarwal Meadows Pvt. Ltd.

3. Aradhna Infradev Pvt. Ltd. 4. Aerotech Aviation India Pvt. Ltd.

5. Athens Computer Technologies Pvt. Ltd. 6. Baba Herbals Pvt. Ltd.

7. Bhavya Electronics and Networks Pvt. Ltd. g Balram Retails Pvt Ltd

9 D^{iamond Infradev P}yt. Lrt.

_10.Gajodhari Chemicals Pvt. Ltd.

12. Repartee Infrastructures Pvt. Ltd.

13. Radiance Techno Powers Company Pvt. Ltd. .

15. SCS Educational Foundation ¹⁴ SE. ^{Micro Housin}g ^{Finance Pvt}. ^Ltd.

17. Sunil Agarwal HUF ¹⁶- ^{Raj Shiksha} F^oundation

19. P N Agarwal & Sons HUF ¹⁸. ^{Harish Sin}g^{h H}UF

Notes :

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration.

Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

Note 5. : Working Capital Borrowings

The Company has an arrangement with a consortium of fifteen banks under the leadership of Central Bank of India for its working capital requirements. The facility is primarily secured by the hypothecation of book-debts / receivables of the Company and collaterally by mortgage of immovable properties including office premises, a flat, six commercial properties of the Company and third party as well as personal and corporate guarantees. The share pattern of the member banks in the consortium is as under:

* Union Bank of India has sanctioned credit line of Rs. 5,000.00 Lakhs but the same has not been utilized till now.

Note 6.: Term Loans

Small Industries Development Bank of India

Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property in the name of guarantors, Personal guarantee of directors and their relatives, and corporate guarantee of the Company who has stood as guarantor.

Note 7. : During the Current year, few Arbitration Awards have become executable Decrees. Total amount of Decrees available for execution stands to Rs. 10,411.95 Lakhs as on the date of Balance Sheet. The Accounting treatment has been done as per Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets" Issued by The Institute of Chartered Accountants of India.

Note 8. : The Company had not taken any exposure in Derivatives during the financial year 2016-17.

Note 9 : Disclosure relating to Securitization

I) The Company has not done securitization of any of its loans & advances to any organization during the financial year 2016-17 and there is no outstanding amount as on Balance Sheet date. Also, the Company has not sold its financial assets to any Securitization/Reconstruction Company for Asset Reconstruction. Further the Company has not undertaken any new assignment transaction during the Financial Year 2016-17.

ii) The Company has not purchased any non-performing assets (NPAs) from other NBFCs or financial institutions.

b) Capital Market Exposure

The company has not taken any exposure in capital market during the financial year 2016-17, and also the inventory of the company as at 31st March 2017 does not contain any exposure to capital market

c) Details of financing of parent company products : NIL

d) Details of Single Borrower Limit and Group Borrower Limit exceeded by NBFC

The company has adhered to the Prudential Exposure norms as prescribed by RBI and has not given any advances exceeding the limits as prescribed for Single borrower and Group Borrower.

e) Unsecured Advances

The unsecured advances outstanding as at Balance Sheet date are Rs,27,295Lakhs. The Company does not have any loan or advances which are partially secured against any sort of licenses, rights, authorizations charged to the company.

Note 10 : Registration obtained from other financial sector regulators:

RBI Registration No. : B-14.02997

Company Identification No. : L65921DL1992PLC120483

The company has never been penalized for any non-compliance by financial sector regulators.

Note 11 : Bank borrowings of the Company has been assigned rating of "IND A-" by M/s India Ratings & Research Private Limited (A Fitch Group Company) which denotes "Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk". The Company has already initiated the surveillance exercise for the financial year 2016-17.

Note 12 : Unlisted Unsecured Non-Convertible Redeemable Debentures (NCDs)

During the current year on 17th September, 2016 Company has made allotments of ''14.50% Unlisted Unsecured Redeemable INR Denominated Non-Cumulative Non-Convertible Debenture'' of Rs. 1,00,00,000/-(Rupees One Crore) each for an aggregating amount of Rs. 95,00,00,000/- (Rupees Ninety Five Crores). Term of such NCDs is 60 months from the date of allotment with the call option available with the Company to redeem NCDs after expiry of One Year from the date of allotment in full or part as may be decided by the Board of Directors of the Company.

d) Concentration of NPAs

Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments (Net of future interest receivable) are overdue for more than 4 months and management is of the opinion that its recovery chances are very remote or negligible, the Company first treats these overdue and future installments as bad debts and after this treatment the provisioning for non performing assets is made in compliance with the NonBanking Financial Company-Systemically Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Direction, 2016, as applicable to the company.

Note 13 : The Company is domiciled in India and does not have any joint venture, associate or subsidiary abroad.

Note 14 : Off Balance Sheet SPVs sponsored

The Company has not sponsored off Balance Sheet SPVs

*As business practice the cash collection (our''s is being a NBFC) and deposit in the banks at different locations is part of routine working. Accordingly there are certain points where SBN & Non-SBN currency was deposited through the same pay-in-slips.

Notes:

15. Provisioning norms have been duly adhered to as prescribed in the Non-Banking Financial Company-Systemically Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Direction, 2016.

16. All Accounting Standards and Guidance Notes issued by ICAI as applicable have been followed including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments have been disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2016

Notes:

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

Note 1 : Working Capital Borrowings

The Company has availed a working capital facilities provided by consortium of twelve Bankers in which the Lead Bank is Central Bank of India Delhi. This facility is secured by hypothecation of books debts / receivables, equitable mortgage on office premises and a flat belonging to the Company, equitable mortgage of five commercial properties in the name of the guarantors, personal guarantee of directors and their relatives and corporate guarantee of the companies who have stood as guarantor. The proportions of the Bankers in the consortium are as follows:

Note 2 : The Company had not taken any exposure in Derivatives during the financial year 2015-16.

Note 3 : Disclosure relating to Securitization

i) The Company has not done securitization of any of its loans & advances to any organization during the financial year 2015-16 and there is no outstanding as on Balance Sheet date. Also, the Company has not sold its financial assets to any Securitization/ Reconstruction Company for Asset Reconstruction. Further the Company has not undertaken any assignment transaction during the Financial Year 2015-16

ii) The Company has not purchased any non-performing assets (NPAs) from other NBFCs or financial institutions.

iii) Details of stock sold during the year:

b) Capital Market Exposure

The company has not taken any exposure in capital market during the financial year 2015-16, and also the inventory of the company as at 31^stMarch 2016 does not contain any exposure to capital market

c) Details of financing of parent company products : NIL

d) Details of Single Borrower Limit and Group Borrower Limit exceeded by NBFC

The company has adhered to the Prudential Exposure norms as prescribed by RBI and has not given any advances exceeding the limits as prescribed for Single borrower and Group Borrower.

e) Unsecured Advances

The unsecured advances outstanding as at Balance Sheet date are '' 17863 lacs. The Company does not have any loan or advances which are partially secured against any sort of licenses, rights, authorizations charged to the company.

Note 4 : Registration obtained from other financial sector regulators:

RBI Registration No. : B-14.02997

Company Identification No. : L65921DL1992PLC120483

The company has never been penalized for any non-compliance by financial sector regulators.

Note 5 : Bank borrowings of the Company has been assigned rating of "IND A-" by M/s India Ratings & Research Private Limited (A Fitch Group Company) which denotes "Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk"

Note 6 : The company is consistent in earning profits and paying dividend to its shareholders. During the year, the Company has redeemed 2,500,000 10% Preference Shares of Rs. 10/- each fully paid up @ Rs. 200/- each. The Company has utilized Rs. 4,750 lacs from the balance available in security premium reserve for re-paying the premium on redemption of preference shares & Rs. 250 lacs from profit & loss account for creating Capital Redemption Reserve during the financial year 2015-16 and relevant provision of Companies Act, 2013, and other applicable laws have been complied with.

Note 7 : Concentration of Deposits, Advances , Exposures and NPAs

a) Concentration of Deposits

The Company has not taken any deposits from public.

b) Concentration of Advances

d) Concentration of NPAs

Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments are overdue for more than 5 months and management is of the opinion that its recovery chances are very remote or negligible, the Company first treats these overdue and future installments as bad debts and after this treatment the provisioning for non performing assets is made in compliance with Systemically Important Non-Banking financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015, as applicable to the company.

Note 8 : The Company is domiciled in India and does not have any joint venture, associate or subsidiary abroad.

Note 9: Off Balance Sheet SPVs sponsored

The Company has not sponsored off Balance Sheet SPVs.

Notes:

1. Provisioning norms shall be applicable as prescribed in the Systemically Important Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.

2. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/ NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long te

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Mar 31, 2015

1. Notes:

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

2. Working Capital Borrowings:

During the year, the Company has availed a working capital facility provided by consortium of Nine Bankers in which the Lead Bank is Central Bank of India. This facility is secured by hypothecation of books debts / receivables. The credit facilities are secured by equitable mortgage on office premises and a flat belonging to the Company and equitable mortgage of four commercial properties in the name of the guarantors and personal guarantee of directors and their relatives, and corporate guarantee of the companies who have stood as guarantor. The proportions of the Bankers in the consortium are as follows:

3. Term Loans:

Small Industries Development Bank of India

Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property in the name of guarantors, Personal guarantee of directors and their relatives, and corporate guarantee of the Company who has stood as guarantor.

4. The Company had not taken any exposure in Derivatives during the financial year 2014-15.

5. Disclosure relating to Securitization:

i) The Company has not done securitization of any of its loans & advances to any organization during the financial year 2014-15 and there is no outstanding as on Balance Sheet date. Also, the Company has not sold its financial assets to any Securitization/Reconstruction Company for Asset Reconstruction. Further the company has not undertaken any assignment transaction during the financial year 2014-15.

ii) The Company has not purchased any non-performing assets (NPAs) from other NBFCs or financial

b) Capital Market Exposure

The company has not taken any exposure in capital market during the financial year 2014-15, and also the inventory of the company as at 31st March 2015 does not contain any exposure to capital market.

c) Details of Single Borrower Limit and Group Borrower Limit exceeded by NBFC

The company has adhered to the Prudential Exposure norms as prescribed by RBI and has not given any advances exceeding the limits as prescribed for Single borrower and Group Borrower.

d) Unsecured Advances

The unsecured advances outstanding as at Balance Sheet date are 7 18152 lacs. The Company does not have any loan or advances which are partially secured against any sort of licenses, rights, authorizations charged to the company.

6. The Company is a listed NBFC ND-SI regulated by RBI, and is not governed by any other financial regulator. The company has never been penalized for any non-compliance.

7. Bank borrowings of the Company has been assigned rating of "Care A-" by CARE Limited which denotes "ADEQUATE SAFETY"

39. Provisions and Contingencies:

(Rs,in Lacs)

Break up ol Provisions and contingencies 2014-15 2013-14

Provisions for depreciation on investment Nil Nil

Provision towards NPA Nil Nil

Provision made towards income tax 2261 2668

Other provision and contingencies (Contingent Liability- Interest Tax Matter) Nil 60.81

Provision for Standard Assets at the Balance Sheet date 246 218

8. The company is consistent in earning profits and paying dividend to its shareholders. There has been no draw down from Reserves during the financial year 2014-15.

9. Concentration of Deposits, Advances , Exposures and NPAs:

a) Concentration of Deposits

The Company has not taken any deposits from public.

d) Concentration of NPAs

Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments are overdue for more than 6 months and management is of the opinion that its recovery chances are very remote or negligible, the Company first treats these overdue and future installments as bad debts and after this treatment the provisioning for non performing assets is made in compliance with Systemically Important Non-Banking financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015, as applicable to the company.

10. The Company is domiciled in India and does not have any joint venture, associate or subsidiary abroad.

11. Off Balance Sheet SPVs sponsored:

The Company has not sponsored off Balance Sheet SPVs.

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Mar 31, 2014

Notes Forming Integral Part of the Financial Statements as at 31 st March 2014

1. Contingent Liabilities: (in Rs.) 2013-14 2012-13 Interest Tax matters in appeal 60,81,168 60,81,168

(However Company has already deposited the above amount with Income Tax Authority)

2. No amount is payable to Small Scale Industrial Undertakings. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid/ payable as required under the Act can not be furnished.

3. Figures for the previous year have been regrouped/ rearranged/ reclassified wherever considered necessary.

Notes :

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

4. Term Loans:

A. Small Industries Development Bank of India: Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property in the name of guarantors, Personal guarantee of directors and corporate guarantee of the Company who has stood as guarantor.

B. Punjab National Bank: Term loan assistance for on lending to small loans clients is secured by hypothecation of book debts arising out of the Bank assistance and personal guarantee of the directors.

Notes:

1. As defined in Paragraph 2(1) (xii) of the Non-Banking financial companies acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank of India) Directions, 2007.

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/ fair value/ NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2013

1. Contingent Liabilities:

Interest Tax matters in appeal Rs. 60,81,168 Rs. 49,23,788

2. There are two unclaimed matured deposits amounting to Rs. 1.02 lacs lying with the company as on 31st March 2013.

3. No amount is payable to Small Scale Industrial Undertakings. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid/payable as required under the Act can not be furnished.

4. Figures for the previous year have been regrouped/rearranged/reclassifed wherever considered necessary.

5. Working Capital Borrowings

A. punjab National bank: The facilities from Punjab National Bank are secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of two offce premises and a fat belonging to the Company and equitable mortgage of one house and one shop belonging to a Director and his wife, and three commercial buildings and land and two fats in the name of the guarantors and personal guarantee of directors and corporate guarantee of the companies who have stood as guarantor.

B. bank of India: The facilities from Bank of India, is secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of offce premises in the name of the guarantor, personal guarantee of directors and corporate guarantee of the company who have stood as guarantor.

C. uCO bank: The facilities from UCO Bank, is secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of fat in the name of the guarantor, personal guarantee of directors and corporate guarantee of the company who have stood as guarantor.

D. united bank of India: The facilities from United Bank of India, is secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of commercial building in the name of the guarantor, personal guarantee of directors and corporate guarantee of the company who have stood as guarantor and cash collateral given by the company.

E. Corporation bank: The facilities from Corporation Bank, is secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of immovable properties in the name of the guarantors, personal guarantee of directors and corporate guarantee of the companies who have stood as guarantor.

F. Central bank of India: The facilities from Central Bank of India is secured by hypothecation of Book Debts pertaining to advances. The credit facilities are secured by equitable mortgage of property in the name of guarantor, personal guarantee of the directors and corporate guarantee of the company who have stood as guarantor and cash collateral given by the company.

6. Term Loans

A. Small Industries Development Bank of India: Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property in the name of guarantors, Personal guarantee of directors and corporate guarantee of the Company who has stood as guarantor and cash collateral given by the company.

B. reliance Capital Limited: Term loan assistance is secured by hypothecation of book debts, personal guarantee of two directors and cash collateral given by the Company.

C. punjab National bank: Term loan assistance is secured by hypothecation of book debts arising out of the Bank assistance and personal guarantee of the directors.

D. Central bank of India: The term loan facility from the Bank is secured by exclusive charge on receivables fnanced by the Company and is secured by lien on deposit, Equitable Mortgage of land belonging to the guarantor, personal guarantee of directors of the Company and Corporate guarantee of the company who has stood as guarantor.

E. Syndicate bank: Term loan assistance is secured by hypothecation of book debts pertaining to advances and personal guarantee of the directors and cash collateral given by the company.

F. ICICI bank Ltd.: Term loan assistance for on lending to micro fnance clients is secured by hypothecation of book debts and personal guarantee of the directors. terms of repayment of the above mentioned loan is monthly except Central Bank of India.

7. Assignment details

A. hDfC bank: Assignment transactions are secured by hypothecation of book debts, Cash collateral given by Company in the form of FDR and personal Guarantee given by the directors of the Company.

B. punjab National bank: Assignment transactions are secured by hypothecation of book debts, cash collateral given by Company in the form of FDR and personal guarantee given by the Directors of the Company.

C. reliance Capital Limited: Assignment transactions was secured by hypothecation of book debts, personal guarantee of directors and cash collateral given by the Company.

D. uCO bank Ltd: Assignment transactions are secured by hypothecation of book debts, Cash collateral given by Company in the form of FDR.

E. fullerton India Credit Company Ltd: Assignment transactions was secured by hypothecation of book debts, Cash collateral given by Company in the form of FDR and Personal Guarantee of the director of the Company.

E. Development Credit bank Ltd. : Assignment transactions are secured by hypothecation of book debts, cash collateral given by Company in the form of FDR and Personal Guarantee given by the director of the Company.

Terms of repayment of the above mentioned assignments are monthly.

8. The company has made provision of tax on its declared dividend after adjusting the amount of dividend received from its wholly owned subsidiary, M/s Nupur Finvest Pvt. Ltd.

---

Mar 31, 2012

Current Year Previous Year 31/03/2012 31/03/2011

1. Contingent Liabilities:

Interest Tax matters in appeal Rs. 4,923,788 Rs. 4,923,788

2. There are no unclaimed matured deposits lying with the company as on 31st March, 2012.

3. No amount is payable lo Small Scale Industrial Undertakings. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the yearend together with interest paid/payable as required under the Act cannot be furnished.

4. During the year the Company has sold by way of assignment 3675 cases of loan contract to the Scheduled Banks and Non Banking Financial Companies amounting to Rs. 8,731 lacs.

5. Figures for the previous year have been regrouped/rearranged/reclassified wherever considered necessary.

6. Disclosure of related party transaction

A. Wholly owned Subsidiary Nupur Finvest Pvt. Ltd.

B. List of related parties and relationship

RELATED PARTY (RELATION)

Key Managerial Personnel

Mr. Sunil Agarwal (Managing Director)

Mr. Harish Singh (Executive Director)

Mr. Sachin Agarwal (Whole Time Director)

Mr. Purushottan Agrawal (Director)

Relative of KMP

Mrs. Raj Agarwal (wife of Mr. Purushottam Agrawal)

Mrs. Neetu Agarwal (wife of Mr. Sunil Agarwal)

Mrs. Shikha Agarwal (wife of Mr. Sachin Agarwal)

Mrs. Preeti Chauhan (wife of Mr. Harish Singh)

Mrs. Sushila Devi Chauhan (Mother of Mr. Harish Singh)

C. Enterprises over which significant influence exercised by key Managerial Personnel/Relatives of Key Managerial Personnel.

1. Siyaram Motors Pvt. Ltd.

2. Spring Infradev Ltd.

3. Siyaram Infrastructure Pvt. Ltd.

4. Helios Aviation Pvt. Ltd.

5. Spring Education Venture Pvt. Ltd.

6. S. E. Micro Housing Finance Ltd.

7. Spring Resorts Pvt. Ltd.

8. Spring Communication Pvt. Ltd.

9. Natansh Pvt. Ltd.

10. Ujala Securities Pvt. Ltd.

11. Deepesh Consultancy Pvt. Ltd.

12. Stellar Constellation Pvt. Ltd.

13. Blessing Builders Pvt. Ltd.

14. Eastern Star Infradev Pvt. Ltd.

15. Asset# Infrahomes LLP

16. Athens Computer Technologies Pvt. Ltd.

17. S. E. Homefin Pvt. Ltd.

18. S. E. Power Ltd.

19. Stellar Spring Projects Pvt. Ltd.

20. Baba Herbals Pvt. Ltd.

21. Aradhna Infradev Pvt. Ltd.

22. Balram Retails Pvt. Ltd.

23. Agrim Marketing Pvt. Ltd.

24. Gajodhari Chemicals Pvt. Ltd.

25. Bhavya Electronics and Networks Pvt. Ltd.

26. Diamond Infradev Pvt. Ltd.

27. Shri Radhey Govind Infradev Pvt. Ltd.

28. Aerotech Aviation India Pvt. Ltd.

29. Mor Mukut Infradev Pvt. Ltd.

30. Aerotech Aviation India Pvt. Ltd.

31. Siyaram Shelters Pvt. Ltd.

32. Spring Trading Pvt. Ltd.

33. Aanjneya Motor Pvt. Ltd.

34. Osprey E-Commerce Pvt. Ltd.

35. Dauji Infradev Pvt. Ltd.

36. RNR Infosolution Pvt. Ltd.

37. Aanjneya Vayusutra Pvt. Ltd.

38. Sake Buildcon Pvt. Ltd.

39. P. N. Agarwal & Sons

40. Sunil Agarwal HUF

41. Sachin Agarwal HUF

42. Harish Singh HUF

Notes :

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

7. Working Capital Borrowings

A. Punjab National Bank: The facilities from Punjab National Bank are secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of two office premises and a flat belonging to the Company and equitable mortgage of one house and one shop belonging to a Director and his wife, and three commercial buildings and land and two flats in the name or the guarantors and personal guarantee of directors and corporate guarantee of the companies who have stood as guarantor.

B. Bank of India: The facilities from Bank of India, is secured by hypothecation of book debts pertaining to Microfinance business. The credit facilities are secured by equitable mortgage of office premises in the name of the guarantor, personal guarantee of directors and corporate guarantee of the company who have stood as guarantor.

C. AXIS Bank Ltd.: The overdraft facilities from AXIS Bank are secured.

8. Term Loans

A. Small Industries Development Bank of India: Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property in the name of guarantors, Personal guarantee of directors and corporate guarantee of the Company who has stood as guarantor.

B. Reliance Capital Limited: Term loan assistance is secured by hypothecation of book debts, personal guarantee of two directors and cash collateral given by the Company.

C. Punjab National Bank: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts arising out of the Bank assistance and personal guarantee of the directors.

D. Central Bank of India: The term loan facility from the Bank is secured by exclusive charge on receivables of SME's, Micro Finance and Priority Sector financed by the Company and is secured by lien an deposit, Equitable Mortgage of land belonging to the guarantor, personal guarantee of directors of the Company and Corporate guarantee of the company who has stood as guarantor.

E. Syndicate Bank: Term loan assistance is secured by hypothecation of book debts pertaining to micro finance and business loans and personal guarantee of the directors.

F. United Bank of India: The term loan facility from the Bank is secured by exclusive charge on book debts and is secured by cash collateral given by Company in the form of FDR, Equitable Mortgage of land belonging to the guarantor, personal guarantee of directors of the Company and Corporate guarantee of the company who has stood as guarantor.

G. ICICI Bank Ltd.: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts and personal guarantee of the directors.

Terms of Repayment of the above mentioned loan is monthly except BOI, UBI and CBI.

9. Assignment details

A. HDFC Bank:- Assignment transactions are secured by hypothecation of book debts. Cash collateral given by Company in the form of FDR and personal Guarantee given by the directors of the Company.

B. IClCI Bank.:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance. Cash collateral given by Company in the form of FDR and Personal Guarantee given by the directors of Company.

C. Punjab National Bank:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance, cash collateral given by Company in the form of FDR and personal guarantee given by the Directors of the Company.

D. Reliance Capital Limited:- Assignment transactions are secured by hypothecation of book debts, personal guarantee of directors are collateral given by the Company.

E. Development Credit Bank:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance. Cash collateral given by Company in the form of FDR and Personal Guarantee given by the director of the Company.

F. Nupur Finest Pvt. Ltd.:- Alignment transactions are secured by hypothecation of book debts pertaining to micro finance and personal guarantee given by the Directors of the Company.

G. Fullerton India Credit Company Ltd.:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance, cash collateral given by Company in the form of FDR and Personal Guarantee given by the Directors of the Company.

H. UCO Bank Ltd.:- Assignment transactions are secured by hypothecation of book debts. Cash collateral given by Company in the form of FDR and Personal Guarantee of the director of the Company.

Terms of Repayment of the above mentioned assignments are monthly.

10. The Scheme of Arrangement under section 391-394 of the Companies Act, 1956 (the scheme) to transfer Non-Conventional Energy Division of S. E. Investments Ltd. (SEIL) on going concern basis to S. E. Power Ltd., (SEPL) w.e.f. 30th Sep., 2010. The appointed date has become effective on 21st Dec., 2011 on getting requisite approval and completion of necessary formalities.

All the assets and liabilities of the Non-Conventional Energy Division of the Company, on the appointed date, have been transferred to SEPL. The excess of assets over liabilities relating to Non Conventional Energy Division has been adjusted in terms of Scheme against the General Reserve of the Company for the amount Rs. 4,063.72 Lacs.

The effect of Demerger pursuant to Scheme sanctioned by the Hon'ble Delhi High Court with Appointed and Effective date has been given during the current financial year and the incorporation has been done in above financial statements as decided by the Management in consultation with Statutory Auditors.

11. Due to demerger of Non Conventional Energy Division there is only one segment left i.e. Finance Activities. Hence Segment Reporting is not applicable.

Notes:

1. As defined in Paragraph 2(1) (xiii) of the Non-Banking financial companies acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank of India) Directions, 2007.

3. All Accounting Standards and Guidance Notes Issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2011

1. Contigent liabilities:

Interests Tax matters in appeal Rs 4,923,788 Rs4,923,788 Stamp Dutry on increased Authorized Share Capital (write petition and pending application have been disposed off in our favour) NIL Rs1,747,500

2. There are eight unclaimed matured deposits lying with the Company amounting to Rs. 297,196 as on 31st March 2011.

3. Information pursuant to the provisions of Paragraph 3 and 4D of part II & IV of Schedule VI to the Companies Act, 1956, is given in Schedule 15 & 16 respectively.

4. No amount is payable to Small Scale Industrial Undertakings. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid/payable as required under the Act can not be furnished.

5. During the year the Company has sold by way of assignment 62014 cases of loan contract to the Scheduled Banks and Non Banking Financial Companies amounting to Rs. 12,213 Lacs.

6. Figures for the previous year have been regrouped/rearranged/ reclassified wherever considered necessary.

7. Disclosure of related party transactions

A. Wholly owned Subsidiary: —Nupur Finvest Pvt. Ltd

B. List of related parties and relationship:

RELATED PARTY RELATION

Key Managerial Personnel

Mr. Sunil Agarwal Managing Director

Mr. Harish Singh Executive Director

Mr. Sachin Agarwal Whole time Director

Mr. Purushottam Agrawal, Mrs. Raj Agarwal,

Mrs. Neetu Agarwal, Mrs. Shikha Agarwal, Mrs. Preeti Chauhan and

Mrs. Sushila Devi Chauhan Relatives of key managerial personnel

C. Enterprises over which significant influence exercised by Key Managerial Personnel/Directors/Relatives of Key Managerial Personnel

I Siyaram Motors Pvt. Ltd. 2 Spring Infradev Ltd.

3 Siyaram Infrastructure Pvt. Ltd. 4 Helios Aviation Pvt. Ltd.

5 Spring Education Venture Pvt. Ltd. 6 S. E. Micro Housing Finance Ltd. 7 Spring Resorts Pvt. Ltd. 8 C Voter Broad Cast Pvt. Ltd.

9 UNI Television Pvt. Ltd. 10 Spring Communication Pvt. Ltd.

11 Natansh Finlease Pvt. Ltd. 12 Ujala Securities Pvt. Ltd.

13 Deepesh Consultancy Pvt. Ltd. 14 Stellar Constellation Projects Pvt. Ltd.

15 Blessing Builders Pvt. Ltd. 16 Eastern Star Infradev Pvt. Ltd.

17 Assetz Infrahomes LLP 18 Athens Computer Technologies Pvt. Ltd.

19 S. E. Homefin Pvt. Ltd. 20 S. E. Power Ltd.

21 Stellar Spring Projects Pvt. Ltd. 22 Baba Herbals Pvt. Ltd.

23 Aradhna Infradev Pvt. Ltd. 24 Balram Retails Pvt. Ltd.

25 Agrim Marketing Pvt. Ltd. 26 Gajodhari Chemicals Pvt. Ltd.

27 Bhavya Electronics and Networks Pvt. Ltd. 28 Diamond Infradev Pvt. Ltd.

29 Shri Radhey Govind Infradev Pvt. Ltd. 30 Sarin & Sarin Investments Pvt. Ltd.

31 Mor Mukut Infradev Pvt. Ltd. 32 Aerotech Aviation India Pvt. Ltd.

Notes :

(1) Related party relationship is as identified by the Company on the basis of information available with them and accepted by the auditors as correct.

(2) No amount has been written off or written back during the year in respect of debt due from or to related parties.

(3) Company has entered into transactions with certain parties as listed above during the year under consideration. Full disclosures have been made and the Board considers such transactions to be in normal course of business and at rates agreed between the parties.

(4) The key management personnel and their relatives have given personal guarantees and collaterals for loans raised by the Company but Company has not provided any guarantee to these persons nor paid any consideration for furnishing such guarantees.

9. Working Capital Borrowings

A. Punjab National Bank: The facility from Punjab National Bank are secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of two office premises and a flat belonging to the Company and equitable mortgage of one house and one shop belonging to a Director and his wife, and three commercial buildings and land and two flats in the name of the guarantors and personal guarantee of directors and corporate guarantee of the companies who have stood as guarantor.

B. Bank of India: The facilities from Bank of India, is secured by hypothecation of book debts pertaining to Microfinance business. The credit facilities are secured by equitable mortgage of office premises in the name of the guarantor, personal guarantee of directors and corporate guarantee of the company who have stood as guarantor.

C. AXIS Bank Ltd.: The facilities from AXIS Bank are secured by hypothecation of book debts pertaining to Micro Finance business and personal guarantee of directors.

10 Term Loans

A. Indian Renewal Energy Development Agency Ltd.: Term loan assistance for 'Wind Energy Generation Machines (wind mills) being secured by first charge mortgage on the projects, projects receivables through "Trust and Retention A/C" and personal guarantee of the directors and bank guarantee.

B. Small Industries Development Bank of India: Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property of a director and personal guarantee of the directors.

C. HDFC Bank Ltd.: Term Loan assistance secured by hypothecation of books debts, term deposits and personal guarantee of the Directors.

D. Reliance Capital Limited:- Term loan assistance is secured by hypothecation of book debts, personal guarantee of two directors and cash collateral given by the Company.

E. Punjab National Bank: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts arising out of theBank assistance and personal guarantee of the directors.

F. AXIS Bank Ltd.: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts (receivables) funded out of Bank assistance and collateral securities of term deposit receipts.

G. Central Bank of India: The term loan facility from the Bank is secured by exclusive charge on receivables of SME's, Micro Finance and Priority Sector financed by the Company and is secured by lien on deposit, Equitable Mortgage of land belonging to the guarantor, personal guarantee of directors of the Company and Corporate guarantee of the company who has stood as guarantor.

H. Syndicate Bank:- Term loan assistance is secured by hypothecation of book debts pertaining to micro finance and business loans and personal guarantee of the directors.

I. United Bank of India: The term loan facility from the Bank is secured by exclusive charge on book debts and is secured by cash collateral given by Company in the form of FDR, Equitable Mortgage of land belonging to the guarantor, personal guarantee of directors of the Company and Corporate guarantee of the company who has stood as guarantor.

J. ICICI Bank Ltd.: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts and personal guarantee of the directors.

13. Assignment details

A. HDFC Bank:- Assignment transactions are secured by hypothecation of book debts, Cash collateral given by Company in the form of FDR and personal Guarantee given by the directors of the Company.

B. ICICI Bank.:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance, Cash collateral given by Company in the form of FDR and Personal Guarantee given by the directors of Company.

C. Punjab National Bank:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance, cash collateral given by Company in the form of FDR and personal guarantee given by the Directors of the Company.

D. Reliance Capital Limited:- Assignment transactions are secured by hypothecation of book debts, personal guarantee of directors and cash collateral given by the Company.

E. Development Credit Bank :- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance ,Cash collateral given by Company in the form of FDR and Personal Guarantee given by the director of the Company.

F. Nupur Finvest Pvt. Ltd.:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance and personal guarantee given by the Directors of the Company.

G. Fullertone India Credit Company Ltd.:- Assignment transactions are secured by hypothecation of book debts pertaining to micro finance, cash collateral given by Company in the form of FDR and Personal Guarantee given by the Directors of the Company.

14. Effective from 20th May 2010 the Company has issued 152,100,000 Bonus shares amounting to Rs. 304,200,000 out of General Reserve of the Company after obtaining the Board approval in the meeting held on 8th May 2010 in the ratio of 3 fully paid up equity shares of Rs. 2 each for every 1 Equity Share of Rs. 2 each.

15. Effective from 1st November 2010 the Company has subdivided its Equity share of the face value of Rs. 2 each in to 2 equity shares of Re. 1 each (share split), after, obtaining shareholders approval vide special resolution in their meeting held on 13th September 2010 accordingly, the figures for number of equity shares and price of shares disclosed elsewhere in the financial statements have been adjusted for the impact of share split. Further, the basic and diluted earnings per share disclosed have been computed for the current year and recomputed for the previous year based on the revised face value of Re. 1 each.

16. The Company has filed a petition for demerger of its Non-Conventional Energy division and transfer and vest them into S. E. Power Ltd. before the Hon'ble Delhi High Court. As directed by the Hon'ble Delhi High Court the meeting of the share holders, secured creditors and unsecured creditors including fixed deposit holders were convened for approving the scheme and they have approved the scheme of Demerger at their respective meetings. The Petition is still pending before Hon'ble Delhi High Court for disposal, hence no effect of the demerger is required to be incorporated in the annual accounts for F. Y. 2010-11.

17. During the year, an amount of Rs. 613,053/- has been incurred on foreign traveling expenses of the Director of the Company.

18. In accordance with Accounting Standard-22 "Accounting for Taxes on Income" issued by "The Institute of Chartered Accountants of India" the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted or substantively enacted as on the balance sheet date. Deferred tax assets/liabilities arising from temporary timing difference are recognized to the extent there is reasonable certainty that the assets can be realized in future or liabilities are to be provided for in the future. According to the provisions of AS-22 and Tax shield available u/s 80IA/80JJA of Income Tax Act, 1961, in the opinion of the management and expert opinion obtained, no provision of deferred tax is required to be created with respect to BIO GAS PLANT and WINDMILL.

19. In order for proper monitoring and regulation of micro financing business, the Company has acquired 100% equity shares of M/S Nupur Finvest Private Limited, a RBI registered NBFC, by purchasing equity shares from existing shareholders and further allotment of shares of M/S Nupur Finvest Private Limited to carry on micro finance business according to modified guidelines. After this acquisition M/S Nupur Finvest Private Limited has become the wholly owned Subsidiary of the Company.

20. As the Equity Shares of the subsidiary Company Nupur Finvest Pvt. Ltd. has been acquired on the 23rd March, 2011 and during accounting year 2010-11 these were held only for 8 days. Since it is a 100% subsidiary, the bifurcation of item of Income and Expenses for the purpose of Consolidated financial statement is neither material nor significant. Hence the same has been ignored and Consolidated financial statement has been prepared in respect of Balance Sheet only. However according to average method i.e. dividing the whole year of 365 days into period of holding of 8 days the Net Profit comes to Rs. 1.29 Lacs only.

25. Preliminary expenses and amalgamation expenses are written off over a period of 5 Years.

Notes:

1. As defined in Paragraph 2(1) (xii) of the Non-Banking financial companies acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank of India) Directions, 2007.

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2010

1. No remuneration has been paid to directors except remuneration to Whole time Director, Executive Director and Managing Director. The remuneration paid to Whole time Director, Executive Director and Managing Director during the F.Y. 2009-2010 is Rs.10,373,552/- (last year Rs.8,218,128/- ) which is less than that permitted under Section 309 read with Schedule XIII of the Companies Act, 1956.

2. Contingent Liabilities:

Current Year Previous Year

31/03/2010 31/03/2009

Interest Tax matters in appeal Rs. 4,923,788 Rs. 4,923,788

Stamp Duty on increased Authorised Rs. 1,747,500 Rs. - Capital (Writ Petition Pending before Delhi High Court, stay has been granted)

3. There is only one unclaimed matured deposit lying with the company amounting to Rs.1.14 lacs.

4. Information pursuant to the provisions of Paragraph 3 and 4D of part II & IV of Schedule VI to the Companies Act, 1956, is given in Schedule 15 & 16 respectively.

5. No amount is payable to Small Scale Industrial Undertakings as the company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Act, 2006 and hence disclosures, if any relating to amount unpaid as at the year end together with interest paid/payable as required under the Act can not be furnished.

6. (i) During the year the Company has sold by way of assignment 53206 cases of loan contracts to the Scheduled Banks and Non Banking Financial Companies amounting to Rs.15913 Lacs.

(ii) During the year the company has sold by way of assignment 172 cases of loan contracts to Assignee Company amounting to Rs.54 lacs.

7. Disclosure of Related Party Transactions

List of related parties and relationship:—

A. Key Managerial Personnel

PARTY RELATION

Mr. Sunil Agarwal Managing Director

Mr. Harish Singh Executive Director

Mr. Sachin Agarwal Whole time Director

Mr. Purushottam Agrawal, Mrs. Raj Agarwal, Relatives of Key Managerial Personnel

Mrs. Neetu Agarwal, Mrs. Shikha Agarwal,

Mrs. Preeti Chauhan, Mrs. Sushila Devi Chauhan

B. Enterprises over which Significant Influence exercised by Key Managerial Persons/Directors/Relatives of Key Managerial persons.

1 Siyaram Motors Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

2 Spring Infradev Pvt. Ltd. Company controlled by Mr. Purushottam Agrawal,

Mr. Sunil Agarwal and Mr. Sachin Agarwal

3 Nupur Finvest Pvt Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

4. Siyaram Infrastructure Pvt. Ltd. Company controlled by Mrs. Neetu Agarwal and Mrs. Shikha Agarwal

5. Helios Aviation Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

6. Spring Education Ventures Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

7. S. E. Micro Housing Finance Ltd. Company controlled by Mr. Sunil Agarwal, Mrs. Neetu Agarwal and Mrs. Shikha Agarwal

8. Ravitel Agri Industriale Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

9. Spring Resorts Pvt. Ltd. Company controlled by Mr. Purushottam Agrawal and Mr. Sunil Agarwal

10. CVoter Broad Cast Pvt. Ltd. Company controlled by Mr. Sunil Agarwal

11. UNI Television Pvt. Ltd. Company controlled by Mr. Sunil Agarwal

12. Spring Communication Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

13. Natansh Finlease Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

14. Ujala Securities Pvt. Ltd. Company controlled by Mr. Sunil Agarwal and Mr. Sachin Agarwal

15. Deepesh Consultancy Pvt. Ltd. Company controlled by Mr. Sachin Agarwal

16 Stellar Constellation Projects Pvt. Ltd. Company controlled by Mr. Sunil Agarwal

8. Working Capital Borrowing

A. PUNJAB NATIONAL BANK: The facilities from Punjab National Bank, Surya Nagar, Agra are secured by hypothecation of book debts pertaining to advances. The credit facilities are secured by equitable mortgage of office premises and a flat belonging to the company and equitable mortgage of one house and one shop belonging to a director and his wife, and lien on FDR of the company and three commercial buildings and land and two flats in the name of the guarantors and personal guarantee of directors and corporate guarantee of the companies who have stood as guarantors.

B. AXIS BANK LTD.: The Facilities from AXIS Bank are secured by hypothecation of book debts pertaining to Micro Finance business and personal guarantee of three directors.

9. Term Loans

A. INDIAN RENEWAL ENERGY DEVELOPMENT AGENCY LTD.: Term loan assistance for Wind Energy Generation Machines" (wind mills) being secured by first charge mortgage of the projects and personal guarantee of the directors, PDCs towards payment of installments of principal and interest and bank guarantee.

B. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA: Term loan assistance secured by hypothecation of book debts, term deposits and equitable mortgage of immovable property of the company which stood as guarantor and personal guarantee of the directors.

C. HDFC BANK LTD.: Term Loan assistance secured by hypothecation of book debts, term deposits and personal guarantee of the Directors and equitable mortgage of land and building belonging to the company.

D. AXIS BANK LTD.: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts (receivables) funded out of bank assistance and collateral securities of term deposit receipts and equitable mortgage of a flat belonging to the director of the company.

E. ICICI BANK LTD.: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts arising out of the bank assistance and collateral securities of term deposit receipts and personal guarantee of the directors.

F. HSBC BANK LTD.: Term loan assistance for on lending to micro finance customers secured by hypothecation of book debts arising out of the bank assistance and personal guarantee of the directors .

G. PUNJAB NATIONAL BANK: Term loan assistance for on lending to micro finance clients is secured by hypothecation of book debts arising out of the bank assistance and personal guarantee of the directors.

H. Central Bank of India: The term loan facilities from the bank are secured by exclusive assignment charge on receivables of SMEs, Micro Finance and Priority Sector, financed by the company and is secured by lien on Deposit, Equitable Mortgage of land belonging to the guarantor, personal guarantee of Directors of the Company and Corporate guarantee of the Company who has stood as guarantor.

I. JANMANGAL FINANCE PVT. LTD.: Term loan assistance for setting up "Bio Gas Plants" being secured by first charge mortgage on the plants.

10. On 10 March, 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 on any other authorities or regulators.

Out of the total proceeds, sum of USD 28.86 million equivalent to Rs.1302.61 million was lying with Bank as on 31 March, 2010. These GDRs are listed at Luxemburg Stock Exchange. The Equity Shares underlying the GDRs are listed on the Bombay Stock Exchange and National Stock Exchange.

11. Pursuant to the Scheme of Amalgamation (the scheme) of the erstwhile Unnati Financial Services Private Limited with the Company as approved by the members, secured creditors and unsecured creditors in their 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.

The Amalgamation has been accounted for under the "Purchase Method" as prescribed by Accounting Standard-14 on "Accounting for Amalgamations" issued by "The Institute of Chartered Accountants of India". Accordingly, the assets and liabilities of the erstwhile Unnati Financial Services Private Limited as at 31st Aug. 2008 along with subsequent addition/deletion up to 31st March, 2009 have been transferred in accordance with the said scheme. The profit of Rs.285.73 lacs of the amalgamating company during the period 1st Sep. 2008 to 31st March, 2009 have been transferred to the General Reserve of the Company without opening the accounts of the Company for the previous years. Current year transactions are duly incorporated in the books of the Company.

Based on the approved swap ratio as provided in the scheme, 2,100,000 (Twenty One Lacs) equity shares have been issued to the equity share holders of erstwhile Unnati Financial Services Private Limited in the ratio of 1 (One) equity share of the face value of Rs.10 each in the Company for every 10 (Ten) equity shares of Re.1 each held in erstwhile Unnati Financial Services Private Limited. In terms of the scheme, the said equity shares, shall rank, in all respects pari-passu with the existing equity shares of the Company.

The difference between the amount of share capital of the erstwhile Unnati Financial Services Private Limited and the amount of fresh share capital issued by the company on amalgamation amounting Rs.24.15 crore is treated as Capital Reserve and has been added to the capital reserve of the Company.

12. The Authorised Capital of the Company was increased from Rs.60,000,000/- (Rupees Six Crore) divided into 3,500,000 (Thirty Five Lacs) equity shares of Rs.10 each and 2,500,000 (Twenty Five Lacs) preference shares of Rs.10/- each to Rs.85,000,000(Rupees Eight Crore Fifty Lacs) 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 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). The authorised share capital of the company was further increased from 85,000,000/- (Rupees Eight Crore Fifty Lacs) 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) to Rs.1,250,000,000/- (Rupees One Hundred and Twenty Five Crores 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. 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 Companies Act, 1956. Pursuant to such increment the necessary amendments in the Memorandum and Articles of Association of the Company has been made.

13. The Equity Shares of the Company were Sub-divided from Rs.10 per share to five Equity Shares of Rs.2 per share by Board of Directors of the Company in their Meeting 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.

14. In accordance with Accounting Standard-22 "Accounting for Taxes on Income" issued by "The Institute of Chartered Accountants of India" the Deferred Tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets/liabilities arising from temporary timing difference are recognized to the extent there is reasonable certainty that the assets can be realized in future or liabilities are to be provided for in future. During the current year the company has installed and put to use "Bio Gas Plant" amounting to Rs.1057 lacs and according to the provisions of AS-22 and Tax shield benefits available u/s 80IA of Income Tax Act, 1961, in the opinion of the Management and expert opinion obtained, no provision of deferred tax is required to be created with respect to Bio Gas Plant and Wind Mill.

15. Preliminary Expenses and Amalgamation Expenses are written off over a period of Five years.

16. The Investment made by the company in the shares of Spring Infradev Pvt. Ltd. has been netted off against the advance received under specific contracts for those investments.

17. The Company has raised Share Capital by issuing 2,450,000 Global Depository Receipts underlying 4,900,000 Equity Shares of Rs.10 each. The raising of Share Capital is translated in our books in definite terms of money as on date of issue on the basis of conversion rate of USD to Indian Rupees. As on 31st March, 2010 the foreign currency lying with the Foreign Bank forms part of Companys Cash and Bank balance. The Net Investment in Bank balance has been translated using the closing rates of currency conversion as on the Balance Sheet date as per AS-11 and the difference has been accumulated in "Foreign Currency Translation Reserve" Account.

With respect to foreign currency repatriated to India upto 31st March 2010, the difference has been accounted for in "Foreign Currency Translation Reserve" Account and shown under the head "Current Assets, Loans & Advances". The adjustments will be done on Final settlement.

18. Figures for the previous year have been regrouped/rearranged/ reclassified wherever considered necessary.