Directors Report of Paisalo Digital Ltd.

Mar 31, 2025

It is our pleasure to present the 33^rd Annual Report together with the Audited Standalone and Consolidated Financial
Statements for the Financial Year ended March 31, 2025. This report read with Corporate Governance Report and
Management Discussion & Analysis Report includes macro-economic scenario, governance philosophy, financial
performance of the Company, business overview, opportunity and threats and various initiatives taken by the Company.

Company Overview

Paisalo Digital Limited, is a Public Limited Company incorporated on March 5, 1992 under the Companies Act, 1956 and
has its registered office at Delhi, India. It is registered as a Non-Deposit taking Non-Banking Financial Company vide the
Reserve Bank of India (''RBI'') registration number B-14.02997 and classified as a Non-Deposit Taking Middle Layer NBFC.
The Company launched its Initial Public Offering of equity share and was listed on UP Stock Exchange; Ahmedabad Stock
Exchange and Delhi Stock Exchange in the year 1996. Subsequently, shares of the Company got listed on BSE Limited
("BSE") in the year 2007 and National Stock Exchange of India Limited ("NSE") in the year 2009. Currently equity shares are
listed on BSE and NSE.

Financial Highlights

The Standalone financial performance of the Company for the Financial Year 2024-25 is summarized below:

Particulars	FY 2025	FY 2024	% change over FY2024
Total Revenue	7,348.32	6,050.43	21.45
Less: Total operating expenses & Provisions	1,367.79	1,214.06	12.66
Pre-impairment operating profit	5,980.53	4,836.37	23.66
Less: Impairment on financial instruments	186.84	24.66	657.68
Profit before Interest, Depreciation & Taxes (PBIDT)	5,793.69	4,811.71	20.41
Less: Depreciation	54.69	33.96	61.04
Less: Interest & Finance Charges	3,093.00	2,398.23	28.97
Profit Before Exceptional items and Tax	2,646.00	2,379.51	11.20
Exceptional items	-5.95	-5.83	-2.06
Profit Before Tax	2,651.95	2,385.34	11.18
Less: Tax Expense	675.08	615.16	9.74
Profit After Tax (PAT)	1,976.87	1,770.19	11.68
Statutory Reserve pursuant to Section 45-IC of the RBI Act, 1934	395.37	354.04	11.67
Transfer to General Reserve	1,400.00	1,250.00	12.00
Earnings per Share (EPS) (?) Basic	2.20	3.83	(42.56)
Earnings per Share (EPS) (?) Diluted	2.20	3.83	(42.56)
Net Worth	15,257.07	13,210.58	15.49
Assets Under Management (AUM)	50,290.87	43,320.88	16.09

Results Of Operations And State Of Company''s Affairs

Revenue from operations for the year ended March 31, 2025 has increased by 21.5% at 57348.32 Million over the
corresponding previous year. The Net Profit of your Company for the financial year ended March 31, 2025 stood at 51,976.87
Million as against the Net Profit of 51,770.19 Million for the financial year ended March 31, 2024. Accordingly, the Net Profit
for the financial year ended March 31, 2025 reflects a growth of 11.7 % over the corresponding Profit for the financial year
ended March 31, 2024.

Transfer to reserves

Under Section 45IC of the Reserve Bank of India Act, 1934, Non-Banking Financial Companies (NBFC) are required
to transfer a sum not less than 20% of its net profits every year to Reserve Fund before declaration of any dividend.
Accordingly, the Company has transferred 5395.37 Million (previous year 5354.04 Million) to Statutory Reserve. Further,
51400 Million has been transferred to General Reserve for FY25.

Pursuant to provisions of Companies Act, 2013 (the ''Act'') read with relevant rules thereunder, the Company, being a
NBFC, is exempt from creating debenture redemption reserve in respect of privately placed debentures including the
requirement to invest up to 15% of the amount of debentures maturing during the next financial year. However, the
Company maintains sufficient liquidity buffer to fulfill its obligations arising out of debentures.

Subsidiary company

The Company has only one Wholly Owned Subsidiary viz. Nupur Finvest Private Limited, a registered Base Layer Non¬
Deposit taking Non-Banking Finance Company. Nupur Finvest Private Limited is engaged in finance activities. At the year
ended March 31, 2025, the net worth of the Company stood at 5603.81 Million. During the reporting period, the subsidiary
reported income of 5366.31 Million and Profit Before Tax (PBT) and Profit After Tax (PAT) at 531.61Million and 524.34 Million
respectively.

During the FY25, no new Subsidiary was incorporated/acquired. The Company neither has any Associate Company nor
has entered into a Joint Venture with any other Company.

The Financial Statement of Subsidiary Company is also available in a downloadable format under the Investor Section
on the Company''s website at www.paisalo.in.

Pursuant to the provisions of Regulation 16 of SEBI (LODR) Regulations, 2015, Company has a Policy for Determining
Material Subsidiary which is available at Company''s website at https://www.paisalo.in/pdf/corporate governance/
policy/Policy For Determining Material Subsidiary25.pdf

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act, 2013 including applicable Accounting Standards on
Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the Financial
Year ended March 31, 2025.

Consolidated financial performance of the Company financial year ended March 31, 2025 is summarized below:

Particulars	FY 2025	FY 2024	% change over FY2024
Revenue from Operations	7,711.07	6,587.46	17.06
Less: Expenditure	5,035.35	4,180.38	20.45
Exceptional Item	-7.84	-4.76	64.71
Profit Before Tax (PBT)	2,683.56	2,411.84	11.27
Tax Expenses	682.35	622.11	9.68
Net Profit After Tax (PAT)	2,001.21	1789.73	11.82
Total Comprehensive Income for the Period	2,001.21	1789.73	11.82
Earnings per Share of Re. 1 each (EPS) (INR)	2.23	3.87	(42.38)
AUM	52,328.47	45860.3	14.10

Review Of Operations

Paisalo is engaged in the business of providing convenient and easy loan to financially excluded at bottom of India''s
economic pyramid through its numbers of financial products which inter-alia includes SME & MSME Loans, Income
Generation Loans for business/self-employment purpose. In FY25, the company has added highest ever record 5.16
million customers to its customer franchise. Total Customer franchise stood at 9.45million as of FY25 as compared to
4.29 million as of FY 2024.

Total geographic footprint as at FY25 stood at to 3,565 touchpoints (351 Branches, 1900 Distribution Points and 1314
CSPs) across 22 states as compared to 2,455 touchpoints as at FY24. During the period under review, Company''s total
disbursements reached 37,198.50 Million and it has posted 11.7 % increase in the Net Profit after tax for FY25 over FY24.
During this period Gross NPA and Net NPA stood at 0.99% and 0.76% respectively.

The Company delivered its FY25 assessment on customer franchise, geographic expansion, Opex to NTI, GNPA and NNPA.
Credit cost was elevated, but within the long-term outlook of less than 2%. The Company took significant credit actions
through FY25 and is optimistic about its impact on P&L in FY 26. The Company also saw slight NIM compression of 2 bps.

Key Ratio

The Key Ratio (standalone) for Financial Year ended March 31, 2025:

Current Ratio	4.79
Debt- Equity Ratio	2.25
Debt Service Coverage Ratio	0.64
Return on Equity Ratio	12.96%
DE Ratio (TOL/ATNW)	2.07
Net Profit Ratio	36.09%
GNPA	0.99%
NNPA	0.76%

Net Worth and Capital Risk Adequacy Ratio (CRAR)

The Net Worth of the Company (Standalone) increased to 515257.07 Million as on March 31, 2025 from INR 13210.58 Million
as on March 31, 2024.

The Capital Risk Adequacy Ratio (CRAR) stood at 39.16% as on March 31, 2025 as against 35.92% as on March 31, 2024,
which is much above the requirement as stipulated by Reserve Bank of India.

Awards and Recognition

For the period under review, Company was awarded "Prashasti Patra" by Financial Inclusion and Microfinance Department
of State Bank of India, Local Head Office Jaipur, for excellent work in Pradhan Mantri Suraksha Bima Yojana (PMSBY).

Issue of Foreign Currency Convertible Bonds (FCCBs)

During the FY25 Company has raised funds by issuance of 50,000 7.5 per cent. Secured Foreign Currency Convertible
Bonds due in 2029 (FCCBs) having face value of US $1000 each. Out of 50,000 FCCBs, 2000 FCCBs have been converted
into Equity Shares. FCCB Holders have the option to convert these FCCBs into Equity Shares at a conversion floor price of
545.74 per Equity Share. Outstanding FCCBs are listed on Afrinex Exchange, Mauritius.

Issue of Equity Shares

During the FY25 Company has issued Equity Shares as follows:

1. Allotment of 37,01,792 equity shares having face value of 51/- (Rupee 1) each at a premium of 544.74 per share on
January 15, 2025 on conversion of Foreign Currency Convertible Bonds of US $2 Million.

2. Allotment of 3,72,517 equity shares having face value of 51/- (Rupee 1) each fully paid up for cash at a premium of
533.69 (Rupees Thirty-Three and Sixty Nine Paisa) to the Employees of the Company and its Wholly Owned Subsidiary
M/s Nupur Finvest Private Limited, on February 28, 2025. The requisite details are available at the website of the
Company and the required Certificate in respect of Compliance is annexed to this Annual Report as an integral part
of this Report.

Share Capital

The Authorized Share Capital of the Company stood at 51,80,00,00,000.00 consisting of 1,75,00,00,000 Equity Shares of
51/- (Rupee One only) each and 50,00,000 Preference Shares of 510/- (Rupees Ten only) each. Consequent to allotments
made during the year, the Issued Share Capital, Subscribed Share Capital and Paid-up Share Capital of the Company
has been increased and accordingly as on March 31, 2025, the same stood as under:

1.	Issued Share Capital	590,22,43,289 Consisting of 90,22,43,289 Equity Shares of face value of 51/- each
2.	Subscribed Share Capital	590,22,43,289 Consisting of 90,22,43,289 Equity Shares of face value of 51/- each
3.	Paid-up Share Capital	590,21,80,789 Consisting of 90,21,18,289 Equity Shares of face value of 51/- each fully paid-up and 562,500 for 1,25,000 forfeited equity shares of face value of 51/- each (amount originally paid-up @
		50.5 each)

Debt Securities/lnstruments and Utilization of Fund Raised from it

During the year under review, Company has raised 5700 Million by issuing Listed Secured Rated Non-Convertible
Debentures on private placement basis. The fund raised from such issue were utilized for the same purposes as
mentioned in the Issue Documents. For Secured Debentures prescribed asset cover is maintained at all times.

During the year, the Company has also raised funds for short term purpose through listed Commercial Papers.

The Fund so raised during the year from debt securities/instruments had been utilized for the same purpose as mentioned
in the issue/ offer documents.

As on March 31, 2025 outstanding debt securities/instruments were as under:

Sr. No.	Securities/lnstruments	Face value of Outstanding Securities/lnstruments
1.	NON-CONVERTIBLE DEBENTURES	55,238.50 MILLION
2.	COMMERCIAL PAPERS	51,030.00 MILLION
3.	FOREIGN CURRENCY CONVERTIBLE BONDS	US $48.00 MILLION

Borrowing from Banks and Financial Institutions

Your Company raised funds for its working capital and business requirements from various banks and financial
institutions. The total amount of loan outstanding from Banks/FIs as on March 31, 2025 was 522,982.48 Million as against
517,494.45 Million on March 31, 2024.

Timely Repayment of Debt Liabilities

During the year under review, the Company has duly serviced all its debts obligations in time.

During the year the Company has also made payment of interest and principal amount on Non-Convertible Debentures
as per the terms of issue(s).

Accordingly, there is no event of default of interest/principal payment during the year.

Dematerialization of Equity Shares

Equity Shares of the Company are compulsorily tradable in demat form. As on March 31, 2025, 99.99% of the Equity Shares
of total outstanding fully paid-up equity shares of the Company were in Dematerialized from and only 10 Equity Shares
of 51/- each out of total Equity Shares are in physical form.

Dividend Distribution Policy

In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company
had formulated a Dividend Distribution Policy of the Company, which sets out the parameters and circumstances to be
considered by the Board in determining the distribution of dividend to its shareholders and/or retaining profit earned.
The policy is available on the website of the Company at https://www.paisalo.in/pdf/corporate governance/policy/
Dividend Distribution Policy25.pdf

Dividend

RBI vide its circular dated June 24, 2021 has laid down a framework for declaration of dividend by NBFCs. Accordingly, the
Board of Directors, after taking into account various aspects and in compliance with the said circular, recommend for
consideration of the members at the ensuing Annual General Meeting (''AGM''), payment of final dividend of 50.10 (10%)
per Equity Share of face value of 51.00. The dividend recommended is in accordance with the principles and criteria set
out in the Company''s dividend distribution policy. Total dividend proposed for the year does not exceed the ceilings
specified in said circular/ RBI Master Directions.

The dividend, if declared, at the ensuing AGM will be taxable in the hands of the Members of the Company pursuant to
Income Tax Act, 1961.

Unclaimed Dividend and Unclaimed Shares

Pursuant to Rule 5(8) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016, your company furnished a statement / information of the unclaimed dividends amounting to 51,33,367.47 as
on March 31, 2024 in Form IEPF 2 to the Ministry of Corporate Affairs. For the year under review, there was an amount of
519,859.00 as unpaid and unclaimed dividend for a period of 7 years, accordingly, pursuant to the provisions of Section
124(5) of the Companies Act, 2013, 5 19,859.00 has been transferred to the Investor Education and Protection Fund (IEPF)
of the Central Government on November 4, 2024.

The Company has uploaded the details of unclaimed dividend on the Company''s website at https://www.paisalo.in and
also on website specified by the Ministry of Corporate Affairs https://www.iepf.gov.in/IEPF/services.html. IEPF is holding
11,740 Shares of the Company, at the end of the year under review.

Deposits

Your Company is registered with the Reserve Bank of India (RBI), as a Non-Deposit taking Middle Layer NBFC (NBFC-ML)
under Section 45-IA of the RBI Act, 1934. Your Directors hereby report that during the year under review, the Company has
not accepted any deposits from the public, within the meaning of provisions of the Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and the provisions of Section 73 of the Companies Act,
2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and it continues to be a Non-Deposit taking Non¬
Banking Financial Company in conformity with the guidelines of the RBI.

Credit Rating

M/s Infomerics Valuation and Rating Pvt. Ltd. assigned following rating to Company''s instruments:

Sr. No.	Instrument/Facility	Amount (INR in Million)	Rating Assigned
1	Fund Based Facilities from Banks- Long Term	27,000.00	IVR AA/Stable Outlook
2	Non-Convertible Debentures	5,400.00	(IVR Double A with Stable Outlook)
3	Commercial Paper	5,400.00	IVR A1 (IVR A One Plus)

Board of Directors, Key Managerial Personnel (KMP) and Board Meetings

The Company''s Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013,
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, RBI''s Corporate Governance provisions as
applicable on the Company and provisions of the Articles of Association of the Company. The Company''s Board has
been constituted with requisite diversity, wisdom and experience commensurate to the business of your Company.
As on March 31, 2025, the Board of Directors of the Company consist of 10 (Ten) Directors, out of whom five are Non¬
Executive Independent Directors.

Details of the Directors are as follows:

S. No.	Name of Directors	DIN	Designation	Category
1.	Mr. Sunil Agarwal	00006991	Managing Director	Whole Time Director
2.	Mr. Harish Singh	00039501	Executive Director	Whole Time Director
3.	Mr. Anoop Krishna	08068261	Executive Director	Whole Time Director
4.	Mr. Santanu Agarwal	07069797	Deputy Managing Director	Whole Time Director
5.	Mr. Vinod Kumar	10230437	Executive Director	Whole Time Director
6.	Mr. Gauri Shankar	06764026	Independent Director	Non-Executive Director
7.	Mr. Raman Aggarwal	00116103	Independent Director	Non-Executive Director
8.	Mrs. Nisha Jolly	08717762	Independent Director	Non-Executive Director
9.	Mr. Vijuy Ronjan	09345384	Independent Director	Non-Executive Director
10.	Dr. Dharmendra Singh Gangwar	08299862	Independent Director	Non-Executive Director

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions
with the Company, other than sitting fees and reimbursement of expenses, if any.

Appointment/Reappointment of Directors:

Executive Director

During the year under review, the Board of Directors vide their resolution dated February 4, 2025 appointed Mr. Vinod
Kumar (DIN: 10230437) as Additional Executive Director of the Company and his appointment as Executive Director was
approved by the Shareholders at the Extra-Ordinary General Meeting of the Company held on May 2, 2025.

Further, Mr. Jitendra Kumar Ojha has been appointed as an Independent Director on the Board of the Company at the
Extra-Ordinary General Meeting held on May 2, 2025.

Independent Director

Shareholders in the 32nd Annual General Meeting held on September 23, 2024 has approved the re- appointment
pursuant to Section 152 of the Companies Act, 2013:

1. Mr Vijuy Ronjan (DIN:09345384) as Non-Executive Independent Director of the Company for a period of five years
commencing from October 8, 2024.

2. Mr. Raman Agarwal (DIN: 00116103) as Non-Executive Independent Director for a period of five years commencing
from October 15, 2024.

Retirement by Rotation

During the year under review, Mr. Santanu Agarwal (DIN 07069797), who retired at the 32nd Annual General Meeting, was
re-appointed as a Director of the Company.

In terms of Section 152 of Companies Act, 2013, Mr. Harish Singh, Executive Director (DIN 00039501), is liable to retire by
rotation at the 33rd Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment
as Director. The Board of Directors of the Company in its meeting held on July 21, 2025 based on the recommendation
of Nomination and Remuneration Committee recommended to the Members re-appointment of Mr. Harish Singh as a
Director of the Company, liable to retire by rotation.

Brief particulars of Mr. Harish Singh as required under the Secretarial Standards on General Meetings issued by the
Institute of Company Secretaries of India and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements
Regulations, 2015 is provided in the Notice convening the 33^rd Annual General Meeting.

Retirement as an Independent Director

Mr. Naresh Kumar Jain (DIN: 01281538) has completed two consecutive terms of five years each (total ten years) as an
Independent Director on August 13, 2024. In accordance with Section 149(11) of the Companies Act, 2013, which stipulates
that no person can hold the office of Independent Director for more than two consecutive terms, he ceased to be a
Director of the Company effective August 13, 2024.

Mr. Gauri Shankar (DIN: 06764026) has served as an Independent Director of the Company for two consecutive terms
which will conclude on July 21, 2025. As per Section 149(11) of the Companies Act, 2013, no person can hold office as an

Independent Director for more than two consecutive terms. Accordingly, Mr. Gauri Shankar cannot be re-appointed
for a further term, and his current association with the Company as an Independent Director will end on July 21, 2025.
The Board of Directors places on record their sincere appreciation for the valuable services rendered by him as an
Independent Director and is grateful for his advice and guidance to the Board and Management during his tenure as
Independent Director. The Board wishes him good health, happiness, and continued success in all his future endeavors.

KMPs

Save and except as stated above, there are no other changes in the KMPs during financial year 2024-25.

Declaration of Independence by Independent Directors & adherence to the Company''s Code of Conduct for
Independent Directors

Pursuant to Section 149 (7) of the Companies Act, 2013, all Independent Directors had given declaration and necessary
confirmation of eligibility under Section 149(6) of the Companies Act, 2013, and that they qualify to be Independent
Directors pursuant to the Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014. In terms of
Regulation 25(8) of SEBI Listing Regulations, the independent directors have confirmed their eligibility as per Regulation
16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that they are not aware of any
circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to
discharge their duties. Further, the Board has ensured the veracity of the disclosures and opines that there has been no
change in the circumstances which may affect their status as Independent Directors of the Company and the Board
is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and
applicable rules thereunder) of all Independent Directors on the Board.

Further, all the Independent Directors have affirmed that they have adhered and complied with the Company''s Code of
Conduct for Independent Directors which is framed in accordance with Schedule IV of the Act. All the Directors meet the
''Fit and Proper'' criteria as per the policy of the Company and as stipulated by RBI.

Meetings of Board

During the year under review, a total of Seven Meetings of the Board of Directors of the Company were held, i.e., on April
26, 2024; July 25, 2024; August 9, 2024; October 30, 2024; December 23, 2024, January 16, 2025 and February 04, 2025.
Details of Board composition and Board Meetings held during the financial year 2024-25 have been provided in the
Corporate Governance Report which forms part of this Report.

Audit Committee

The Company has an Audit Committee duly constituted in accordance with the provisions of Section 177 of the Companies
Act, 2013, RBI Guidelines and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
as amended. All the members of the Committee have expertise in finance and have knowledge of accounting and
financial management. The scope of the activities of the Audit Committee, as set out in Regulation 18 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and read with Section 177 of the Companies Act, 2013 and
the RBI Regulations for NBFCs.

The present composition of the Committee is as follows: Mr. Gauri Shankar, (Independent Director) Chairman, Mr. Vijuy
Ronjan (Independent Director) Member and Mr. Harish Singh (Executive Director) Member.

The detailed composition of the Audit Committee & its terms of reference and the details of meetings attended by the
Audit Committee members are provided in Corporate Governance Report which forms part of this Annual Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors
of the Company.

Stakeholder Relationship Committee

The Stakeholder Relationship Committee of the Board consists of Independent Directors namely Dr. Dharmendra Singh
Gangwar, as Chairperson and Mr. Raman Aggarwal, Mr. Vijuy Ronjan are as Members of the Committee. The composition,
terms of reference and details of meetings held during the year are disclosed in the Report on Corporate Governance.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (''NRC'') recommends to the Board the suitability of candidates for
appointment as Director/Managing Director, Key Managerial Personnel and the remuneration packages payable to
them. The composition of the Nomination and Remuneration Committee & its terms of reference and the details of
meetings attended by the members are provided in Corporate Governance Report which forms part of this Annual
Report.

Annual Evaluation of Board, its Committees, and Individual Directors:

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 17(10) read with Part D of Schedule
II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI guidance note on Board
Evaluation for listed companies issued vide circular (Ref. no. SEBI/HO/CFD/CMD/ CIR/p/2017/004) dated January 5, 2017,
the Board has carried out an annual evaluation of its own performance, the Board committees and individual Directors.
Structured questionnaire feedback was obtained from each Director as a part of performance evaluation. Basis the
feedback received from the directors, the Board and the Nomination and Remuneration Committee reviewed the
performance of the individual Directors, the Managing Director including various committees established by the Board
at their respective meetings.

The performance evaluation of individual Directors, including the Managing Director, was conducted based on several
criteria. These included professional conduct, fulfillment of roles and responsibilities, effective discharge of duties,
contributions to Board/Committees/Senior Management, preparedness on agenda items, and their contribution to
decision-making processes. Similarly, the performance evaluation of the Board as a whole and its Committees involved
soliciting feedback from Directors and Committee members. This feedback encompassed various criteria such as the
structure and composition of the Board, effectiveness of Board processes, adequacy of information provided, clarity of
roles and responsibilities, opportunities for professional development, functioning of both the Board and its Committees,
establishment and determination of Committee responsibilities, and the quality of the relationship between the Board
and management. These evaluations are integral to ensuring continuous improvement and effectiveness in governance
practices within the Company.

The Independent Directors in their separate meeting held on January 31, 2025 under Regulation 25(4) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of the Companies Act, 2013 had:

i. reviewed the performance of Non-Independent Directors and the Board of Directors as a whole;

ii. reviewed the performance of the Managing Director of the Company, taking into account the views of executive and
non-executive Directors; and

iii. assessed the quality, quantity and timelines of flow of information between the Company''s management and the
Board of Directors that was necessary for the Board of Directors to effectively and reasonably perform their duties.

The entire performance evaluation process was completed to the satisfaction of Board.

With the spirit of wealth creation for the Stakeholders of the Company, your Directors are committed to give their best
efforts towards the development of the Company.

Policy on Directors Appointment and Remuneration

To manage the Company''s affairs effectively and efficiently, the Company has always maintained a well-balanced
composition of Executive and Independent Non-Executive Directors at Board level. All appointments at Board level are
made adhering to the mandates of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, and guidelines issued by the Reserve Bank of India.

Generally, Managing Directors and Whole-time Directors (Executive Directors) are appointed for a term of five years.
Independent Directors serve a term of up to five consecutive years on the Board. Based on their performance evaluation,
eligibility for reappointment, and recommendations by the Nomination and Remuneration Committee, Independent
Directors may be reappointed by the Board for another consecutive term of five years, subject to shareholders'' approval.
Candidates considered for Board appointments undergo thorough evaluation based on criteria including personal and
professional ethics, integrity, values, and character; understanding and alignment with the Company''s vision, mission,
and values; prominence in their respective fields; professional skills, knowledge, expertise, and financial literacy. Additional
competencies and skills deemed essential for effective governance are also taken into account during the evaluation
process.

In addition to the above, the candidature of an Independent Director is also evaluated in terms of the criteria
for determining independence as stipulated under Companies Act, 2013, SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, guidelines issued by RBI and other applicable regulations or guidelines. In case of
re-appointment of Director, the Board shall take into consideration the results of the performance evaluation of the
Directors and their engagement level.

All appointments at senior level are strictly based on meritocracy. Directors, Key Managerial Personnel, and Senior
Management Personnel retire in accordance with the provisions of the Companies Act, 2013 and the Company''s policies.

The Company has Remuneration Policy for Directors, KMPs and other employees, which is reviewed by the Board
of Directors of the Company, time to time, the policy represents the overarching approach of the Company for the
remuneration of Director, KMPs and other employees.

The relevant Policy(ies) have been uploaded on the website of the Company and can be accessed through the link
https://paisalo.in/home/investorrelation.

Compliance with the Code of Conduct of Board of Directors and Senior Management

The Board of Directors and Senior Management of the Company have complied with the Company''s Code of Conduct
applicable to Board of Directors and Senior Management. In this regard declaration signed by the Managing Director is
annexed and forms part of this Report.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c), read with Section 134(5) of the Companies Act, 2013 with respect to
Directors'' Responsibility Statement, the Directors, to the best of their knowledge and belief, hereby confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no
material departure has been made in following the same;

b) appropriate accounting policies have been selected and applied consistently and judgements and estimates made
are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for that period;

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

d) the annual accounts have been prepared on a going concern basis;

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

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.

Auditors & Audit Reports

Statutory Auditor and Statutory Audit Report:

On April 27, 2021 Reserve Bank of India (RBI) vide its notification RBI/2021-22/25 Ref. No. DoS. CO. ARG/SEC.01/08.91.001/2021-
22 inter alia, providing the Eligibility Criteria of Statutory Auditors for appointment of Statutory Central Auditors (SCAs)/
Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs including HFCs.

In terms para 8 of said guidelines, the Company can appoint Statutory Auditor for a continuous period of three years,
therefore, the Company in the 32nd Annual General Meeting held on September 23, 2024 appointed M/s Saket Jain &
Co., Chartered Accountants, having firm registration no. 014685N as the Statutory Auditors of the Company until the
conclusion of the 35th Annual General Meeting of the Company.

The Report given by the Statutory Auditor M/s Saket Jain & Co., Chartered Accountants, on the financial statements of
the Company for the financial year 2024-25 is part of the Annual Report. The Notes on financial statements referred to in
the Auditors Report are self-explanatory and do not call for any further comments under Section 134 of the Companies
Act, 2013. There are no qualifications, reservations, adverse remarks or disclaimers in Auditor''s Report for the financial
year 2024-25.

Secretarial Auditor and Secretarial Audit Report of the entity:

Pursuant to Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of the SEBI Listing Regulations, the Company had appointed M/s. Satish Jadon
& Associates, Practicing Company Secretaries for conducting Secretarial Audit for the financial year ended March 31,
2025 and to submit Secretarial Audit Report in Form No. MR-3. There are no qualifications, reservations, adverse remarks
or disclaimers made by the Secretarial Auditors, in their Audit Report for the financial year 2024-25.

Copy of the Secretarial Audit Report received from M/s. Satish Jadon & Associates in the prescribed Form No. MR-3 is
annexed to this Board''s Report and marked as Annexure A.

Pursuant to circular No. CIR/CFD/CMDl/27/2019 dated February 8, 2019, issued by the Securities and Exchange Board
of India and Regulation 24A(2) of SEBI (LODR) Regulations, 2015, the Company has obtained Secretarial Compliance
Report for financial year ended March 31, 2025, from Practicing Company Secretary on compliance of all applicable
SEBI Regulations and circular/ guidelines issued thereunder and the copy of same has been submitted with the Stock
Exchanges within the prescribed due date.

Further, pursuant to the requirements of Regulation 24A of the SEBI Listing Regulations, the Board of Directors of the
Company at its meeting held on July 21, 2025 has recommended to the Members, for their approval, at the ensuing
Annual General Meeting, the appointment of M/s. Satish Jadon & Associates, a peer-reviewed Company Secretaries as
the Secretarial Auditors of the Company for the first term of five consecutive financial years commencing from April 1,
2025 till March 31, 2030 to conduct Secretarial Audit of the Company.

Fraud Reported by Auditors under Section 143(12) of the Companies Act, 2013

During the period under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit
Committee/ Board or Central Government any instances of fraud in the Company by its officers or employees under
Section 143(12) of the Companies Act, 2013 and therefore, no detail is required to be disclosed under Section 134(3)(ca)
of the Companies Act, 2013.

Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.

Maintenance of Cost Records

The maintenance of cost records, for the services rendered by the Company, is not required pursuant to Section 148 (1)
of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014.

Particulars of Loans, Guarantees or Investments Under Section 186 of Companies Act, 2013

Being RBI registered Non-Banking Financial Company and engaged in the business of giving loans in ordinary course
of its business, accordingly, pursuant to Section 186(11) of the Companies Act, 2013 the provisions of Section 186, except
Sub-Section 1 of the said Section, shall not apply on the Company, hence disclosure under Section 134 (3) (g) of the
Companies Act, 2013, of particulars of the loans given securities provided under Section 186 of the Companies Act, 2013
is not applicable to the Company.

The details of Investment made by the Company have been disclosed in the note no. 6 of the Standalone Financial
Statement for the year ended March 31, 2025. The Company has given its guarantee only for the credit facilities availed
by its Wholly Owned Subsidiary M/s. Nupur Finvest Private Limited.

Particulars of Contracts or Arrangements with Related Parties

The Board of Directors of the Company has formulated a policy on materiality of Related Party Transactions and dealing
with Related Party Transactions ("RPT Policy"), pursuant to the applicable provisions of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The same is displayed on the
website of the Company. This policy deals with the review and approval of related party transactions. All related party
transactions are placed before the Audit Committee for review and approval.

Since all related party transactions entered into by your Company during the year were in the ordinary course of business
and also on an arm''s length basis, therefore details required to be provided under the provisions of Section 134(3)(h) of
the Companies Act, 2013 in the prescribed Form AOC-2 is not applicable to the Company. The Directors draw attention
of the Members to note no. 37 of the Notes to Standalone Financial Statements for the year ended March 31, 2025 which
sets out details of related party transactions pursuant to Indian Accounting Standard-24 (Ind AS-24).

Policy on materiality of related party transactions and on dealing with related party transactions is displayed on the
website of the Company at https://www.paisalo.in/pdf/corporate governance/policy/Policy on Related Party
Transactions25.pdf

Change in the Nature of Business, if any

During the period under review, there was no change in the nature of business of the Company.

Material Changes and Commitments, if any, Affecting the Financial Position of the Company

There have been no material changes and commitments affecting the financial position of the Company which occurred
between the end of the financial year and the date of this Report.

Information on Material Orders Passed by the Regulators or Courts or Tribunal

During the period under review, there were no significant and material orders passed by the Regulators or Courts or
Tribunals impacting the going concern status and the Company''s operations in future.

Furthermore, no penalties were imposed by the RBI or any other regulatory authority during the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As the Company is engaged in the financial services activities, its operations are not energy intensive nor does it require
adoption of specific technology and hence information in terms of Section 134(3)(m) of the Companies Act, 2013, read
with the Companies (Accounts) Rules, 2014, to the extent applicable, are as follows:

• being a Non-banking Finance Company, the particulars regarding conservation of energy and technology
absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not
relevant to its activities.

• Foreign Exchange earnings for the Company during the financial year under review was nil and Company''s Foreign
Exchange outgo during the financial year under review was equal to ^15,24,87,424.85/- as against ^2,34,352/- in the
previous year

Corporate Social Responsibility

Your Company aspire to contribute positively to the community''s wellbeing as a part of Company''s vision and
accordingly carries CSR initiatives in line with Schedule VII of the Companies Act, 2013. In compliance with Section 135
of the Companies Act, 2013 read with Rules made thereunder and as amended from time to time, the Company has
established the Corporate Social Responsibility Committee ("CSR Committee") and formulated Company''s CSR Policy,
which is available on the website of the Company at https://paisalo.in/pdf/corporate governance/policy/CSR Policy25.
pdf. The Company undertakes its CSR initiatives directly and/or through partnering with a trust/foundation, qualified to
undertake CSR activities in accordance with Schedule VII of the Companies Act, 2013 (includes amendments thereto).

For the financial year 2024-25 the Board of Directors of the Company in their meeting held on April 26, 2024 approved
^31.80 Million as the budget for CSR activities. During the financial year 2024-25, Company has spent ^32.08 Million CSR
fund in various activities which are disclosed in the Annual Report on CSR activities for financial year ended March 31,
2025 under Section 135 annexed with this report as Annexure B.

Composition of CSR Committee is disclosed in Corporate Governance Section of this Annual Report as part of Board''s
Report.

Business Responsibility and Sustainability Report

In adherence to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, the Business Responsibility and
Sustainability Report (BRSR) for Financial Year 2025, outlining the environmental, social, and governance (ESG) initiatives
of your Company, is an integral part of this Annual Report. Additionally, this report provides comprehensive insights into
the diverse ESG endeavors undertaken by your Company.

A comprehensive "Business Responsibility and Sustainability Report" (BRSR), formatted as per SEBI guidelines, detailing
the Company''s initiatives, actions, and processes towards ESG endeavors, is appended as Annexure C and forms part of
this Report and can also be accessed on the Company''s website at www. paisalo.in.

Internal Financial Control

The Company remains unwavering in its commitment to strengthening internal financial controls and processes. This
strategic focus is aimed at enabling efficient business operations, safeguarding assets, preventing and detecting fraud
and errors, maintaining the integrity and completeness of accounting records, and ensuring the timely generation of
reliable financial information.

To support the same the Company has instituted a comprehensive internal control framework tailored to the size, scale,
and complexity of its operations. These controls uphold compliance with applicable policies and legal requirements and
are continually enhanced to address the evolving nature of the business. As the organization expands, these controls
play a pivotal role in bolstering the detection and prevention of fraud and discrepancies. The Board of Directors affirms
that the internal financial controls over financial statements are adequate and effective.

This framework is further reinforced by a structured regimen of internal and external audits and ongoing management
reviews. These mechanisms ensure that financial records remain reliable and that assets are accurately accounted for.
The Company engages qualified professionals to carry out internal audits, assessing the sufficiency and effectiveness
of the internal control system.

The Internal Audit function supports both the Audit Committee and the Risk Management Committee by conducting
detailed evaluations of risk assessments and related management action plans. Outcomes from these audits and
risk reports are periodically reviewed by the respective committees to maintain oversight and drive improvements.

Additionally, the robustness of internal controls is validated through periodic testing by Internal Auditors and independent
certification of financial reporting controls are carried out by the Statutory Auditors.

The Internal Financial Control System is continuously refined to respond to changes in the business environment and to
comply with evolving regulatory and accounting standards. Notably, throughout the reporting period, there have been
no significant observations indicating inefficiencies or shortcomings in the internal control systems.

Risk Management

In compliance with regulatory requirements applicable to Non-Banking Financial Companies (NBFCs), the Company
has established a robust Risk Management framework to ensure systematic identification, assessment, and mitigation
of risks across all levels of operations.

The Company has constituted the Risk Management Committee, the Audit Committee, and the Asset-Liability
Management Committee (ALCO). The functioning and meeting frequency of these Committees are disclosed in detail in
the Report on Corporate Governance, which forms an integral part of this Annual Report.

These Committees support the Board in evaluating and addressing business risks in a structured manner. The Company
has adopted a comprehensive Risk Management Policy that focuses on maintaining sustainable growth with stability.
The Policy outlines the process for identification of key risk events, assessment of their potential impact, and timely
reporting, mitigation, and monitoring.

The Risk Management framework includes:

• Clearly defined risk governance structure with assigned roles and responsibilities;

• Identification and evaluation of principal business risks;

• Implementation of control measures to manage and mitigate these risks;

• A detailed Business Continuity Plan (BCP) to ensure resilience in adverse scenarios;

• Periodic monitoring and review of risk exposures and mitigation strategies.

The Company follows a disciplined approach to risk management, aligning business decisions with a well-balanced
risk-reward strategy, thereby safeguarding stakeholder interests and supporting long-term value creation.

Human Resources

Company''s industrial relations continued to be harmonious during the period under review. The Company strives to
provide the best work environment with ample opportunities to grow and explore. Healthy, cordial and harmonious
industrial relations have been maintained by the Company at all levels.

Disclosures as per the Provision of Section 197 (12) of Companies Act, 2013

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed
as Annexure D of this Report. As per the provisions of Section 136(1) of the Companies Act, 2013, the reports and accounts
are being sent to the Members of the Company excluding the information regarding employee remuneration as required
pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. The same is available for inspection and any Member interested in obtaining such information may write an email
to the Company Secretary at [email protected] and the same will be furnished on such request. The Board of Directors affirm
that the remuneration paid to employees of the Company is as per the Remuneration Policy of the Company.

Compliance with Provisions of Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act,
2013

The Company is committed to providing and promoting a safe and healthy work environment for all its employees. In

adherence to the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 ("POSH
Act"), the Company has formulated a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work
Place. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee
under ("POSH Act").

Throughout the financial year 2024-25, the Company received no complaints from employees concerning sexual
harassment.

Number of complaints of sexual harassment received in the year;	NIL
Number of complaints disposed off during the year	Not Applicable (No Complaints received)
Number of cases pending for more than ninety days	Not Applicable (No Complaints received)

Compliance with Maternity Benefits Act, 1961.

The Company has complied with the provisions of Maternity Benefits Act,1961.

Compliance of Reserve Bank of India Guidelines

Paisalo Digital Limited is categorized as a Non-Deposit taking Middle Layer Non-Banking Finance Company. The
Company continues to fulfil all the norms and standards laid down by RBI pertaining to non-performing assets, capital
adequacy, statutory liquidity assets, etc. The Company has complied with the applicable provisions of Master Directions-
Non-Banking Financial Company Systemically Important Non-Deposit taking Company and Deposit taking Company
(Reserve Bank) Directions 2016 and Master Direction - Reserve Bank of India (Non-Banking Financial Company- Scale
Based Regulation) Directions, 2023 and all other applicable directions/regulations/circulars of RBI during the Financial
Year 2024-25.

Annual Return

In accordance with the provisions of Section 92(3) read with Section 134(3) (a) of the Act and the applicable rules, Annual
Return of the Company for the financial year March 31, 2025, in the prescribed form, is hosted on website of the Company
at https://paisalo.in/pdf/annual report/MGT-7 PAISALO 2024-25.pdf.

Management Discussion and Analysis

The Management Discussion and Analysis report for the year under review as required under Regulation 34(2)(e) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided as a separate section forming part
of the Annual Report.

Vigil Mechanism/Whistle Blower Policy

Company in accordance with the provisions of Section 177(9) of Companies Act, 2013 read with Rule 7 of Companies
(Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 has established a vigil mechanism through the Company''s Whistle Blower Policy to deal with instances
of fraud and mismanagement and to enable the Directors and Employees of the Company to report genuine concerns,
about unethical behaviour, actual or suspected fraud or violation of Code of Conducts. The Policy also provide adequate
safeguards against victimisation and make provision for direct access to the Chairman of the Audit Committee. The
Policy is available on the website of the Company at www.paisalo.in. Details of vigil mechanism/whistle blower are
included in the Corporate Governance Report, forming part of this Report.

During the financial year 2024-25, no cases under this mechanism have been reported.

Listing with Stock Exchanges

The equity shares (ISIN INE420C01059) of the Company are listed on BSE Limited (BSE) and National Stock Exchange of
India Limited (NSE). The listing fees payable to both the exchanges for the Financial Year 2025-26 have been paid.

The Secured Non-Convertible Debentures (NCDs) issued on Private Placement basis and Commercial Papers (CPs) are
listed on BSE.

Company''s Foreign Currency Convertible Bonds (FCCBs) are listed on Afrinex Exchange, Mauritius.

Prevention of Insider Trading

The Company has implemented a Code of Conduct for Prevention of Insider Trading to regulate securities trading by
Directors and designated employees. As part of this framework, the Company utilizes software with a structured digital
database to maintain records of individuals with whom unpublished price sensitive information has been shared. This

database includes details of the information shared and the names of such individuals, along with their Permanent
Account Numbers (PAN). Company is also complied with the extending framework for restricting trading by Designated
Persons ("DPs") by freezing PAN at security level. The full text of the Code of Conduct for Prevention of Insider Trading
is accessible on the Company''s website at: https://paisalo.in/pdf/corporate governance/policy/Code of practices
and procedures for prevention of Insider Trading25.pdf

Disclosures Under the Insolvency and Bankruptcy Code, 2016

No application for Bankruptcy under the Insolvency & Bankruptcy Code, 2016 ("IBC") was made against the Company
during the financial year under review.

Further, there are no details required to be reported with regard to difference between amount of the valuation done at
the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions as your
Company has not done any settlement with any Bank or Financial Institutions since its inception.

Corporate Governance

The Company firmly believes that robust corporate governance forms the foundation for sustainable business growth
and the effective management of relationships among all stakeholders. It consistently strives to strengthen these
relationships through principles of fairness, transparency, and accountability. The Company places utmost importance
on the integrity of financial reporting, transparency, fairness, empowerment, and full compliance with the law-both in
letter and spirit.

In adherence to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with
Schedule V thereof, the Report on Corporate Governance for the financial year ended March 31, 2025, is included as a
distinct section of this Annual Report. A certificate from the Company''s Secretarial Auditor, confirming compliance with
the prescribed corporate governance norms, is annexed to the Report.

Certificate from the Managing Director and Chief Financial Officer

The certificate received from Mr. Sunil Agarwal, Managing Director & CEO and Mr. Harish Singh, Executive Director and
Chief Financial Officer with respect to the financial statements and other matters as required under Part B of Schedule II
to the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of this Report.

Acknowledgments

The Board extends its sincere appreciation for the steadfast support and cooperation received from all regulatory
authorities of the Governments. We are also profoundly grateful to our banking partners and other stakeholders, whose
continued collaboration remains integral to our growth and success.

We recognize and deeply value the unwavering commitment of our employees and staff, including the management
team under the leadership of the Executive Directors. Their consistent pursuit of excellence and resilient performance
amid a dynamic and often challenging business environment have been commendable. To our esteemed Members, we
thank you for your enduring trust and support.

We also wish to place on record our sincere thanks to our Non-Executive Independent Directors. Their strategic insights,
rich experience, and wise counsel have been instrumental in guiding the Company towards informed decision-making
and the achievement of key business goals.

As we move forward with optimism, we look ahead with confidence and continue to count on your valued

Place : New Delhi For & on behalf of the Board of Directors of

Date : July 21, 2025 Paisalo Digital Ltd.

Sd/- Sd/-

Sunil Agarwal Harish Singh

Managing Director & CEO Executive Director

DIN : 00006991 DIN : 00039501

---

Mar 31, 2024

It is our pleasure to present the 32^nd Annual Report together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended March 31, 2024. This report read with Corporate Governance Report and Management Discussion & Analysis includes macro-economic scenario, governance philosophy, financial performance of the Company, business overview, opportunity and threats and various initiative taken by the Company.

Company Overview

Paisalo Digital Limited, is a Public Limited Company incorporated on March 5, 1992 under the Companies Act, 1956 and has its registered office at Delhi, India. It is registered as a Non-Deposit taking Non-Banking Finance Company vide the Reserve Bank of India (''RBI'') registration number B-14.02997 and classified as Non-Deposit Taking Systemically Important Middle Layer NBFC. The Company launched its Initial Public Offering of equity share and was listed on UP Stock Exchange; Ahmedabad Stock Exchange and Delhi Stock Exchange in the year 1996. Subsequently, shares of the Company got listed on BSE Limited ("BSE") in the year 2007 and National Stock Exchange of India Limited ("NSE") in the year 2009. At currently equity shares are listed on BSE and NSE and Secured Non-Convertible Debt Securities of the Company are listed on BSE.

Financial Highlights

The Standalone financial performance of the Company for the Financial Year 2023-24 is summarized below:

i ? in Millirtn i

Particulars	FY 2024	FY 2023	% change over FY2023
Total Revenue	6050.43	4229.72	43.05
Less: Total operating expenses & Provisions	1214.06	663.71	82.92
Pre-impairment operating profit	4836.37	3566.01	35.62
Less: Impairment on financial instruments	24.66	445.41	-94.46
Profit before Interest, Depreciation & Taxes (PBIDT)	4811.71	3120.60	54.19
Less: Depreciation	33.96	32.87	3.33
Less: Interest & Finance Charges	2398.23	1803.55	32.97
Profit Before Exceptional items and Tax	2379.51	1284.19	85.29
Exceptional items	-5.83	45.89	-112.71
Profit Before Tax	2385.34	1238.30	92.63
Less: Tax Expense	615.16	321.38	91.41
Profit After Tax (PAT)	1770.19	916.93	93.06
Statutory Reserve pursuant to Section 45-IC of the RBI Act, 1934	354.04	183.39	93.06
Transfer to General Reserve	1250.00	630.00	98.41
Earnings per Share (EPS) ('') Basic	3.83	2.06	85.92
Earnings per Share (EPS) ('') Diluted	3.83	2.06	85.92
Net Worth	13,210.58	11,609.99	13.79
Assets Under Management (AUM)	43,320.88	32,203.70	34.52

Results of Operations and State of Company''s Affairs

Revenue from operations for the year ended March 31, 2024 has increased by 43.05 % at INR 6,050.43 Million over the corresponding previous year. The Net Profit of your Company for the financial year ended March 31, 2024 stood at INR 1770.19 Million as against the Net Profit of INR 916.93 Million for the financial year ended March 31, 2023. Accordingly, the Net Profit for the financial year ended March 31, 2024 reflects a growth of 93.06 % over the corresponding Profit for the financial year ended March 31, 2023.

Transfer to Reserves

Under Section 45IC of the Reserve Bank of India Act, 1934, Non-Banking Financial Companies (NBFC) are required to transfer a sum not less than 20% of its net profits every year to Reserve Fund before declaration of any dividend. Accordingly, the Company has transferred INR 354.04 Million (previous year INR 183.39 Million) to Statutory Reserve. Further, INR 1250.00 Million has been transferred to General Reserve for financial year 2023-24.

Pursuant to provisions of Companies Act, 2013 read with relevant rules thereunder, the Company, being a NBFC, is exempt from creating debenture redemption reserve in respect of privately placed debentures including the requirement to invest up to 15% of the amount of debentures maturing during the next financial year. However, the Company maintains sufficient liquidity buffer to fulfill its obligations arising out of debentures.

Subsidiary Company

The Company has only one Wholly Owned Subsidiary viz. Nupur Finvest Private Limited, a registered Non-Deposit taking Non-Banking Finance Company. Nupur Finvest Private Limited is engaged in finance activities. At the year ended March 31, 2024, the net worth of the Company stood at INR 580.08 Million. During the reporting period, the subsidiary reported income of INR 539.63 Million and Profit Before Tax (PBT) and Profit After Tax (PAT) at INR 26.50 Million and INR 19.55 Million respectively. During the FY 2023-24, no new Subsidiary was incorporated/acquired. The Company neither has any Associate Company nor has entered into a Joint Venture with any other Company.

The Financial Statement of Subsidiary Company is also available in a downloadable format under the Investor Section on the Company''s website at www.paisalo.in.

Pursuant to the provisions of Regulation 16 of SEBI (LODR) Regulations, 2015, Company has a Policy for Determining of Material Subsidiary which is available at Company''s website at https://www.paisalo.in/pdf/corporate governance/Policy for determining material subsidiary.pdf

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act, 2013 including applicable Accounting Standard on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the Financial Year ended March 31, 2024.

Consolidated financial performance of the Company financial year ended March 31, 2024 is summarized below:

('' in Millions)

Particulars	FY 2024	FY 2023	% change over FY2023
Revenue from Operations	6,587.46	4,731.89	39.21
Less: Expenditure	4,180.38	3,424.24	22.08
Exceptional Item	-4.76	45.29	-110.51
Profit Before Tax (PBT)	2,411.84	1,262.37	91.06
Tax Expenses	622.11	326.19	90.72
Net Profit After Tax (PAT)	1789.73	936.19	91.17
Total Comprehensive Income for the Period	1789.73	936.19	91.17
Earnings per Share of Re. 1 each (EPS) (INR)	3.87	2.1	84.29
AUM	45,860.3	34,928	52.33
Capital Adequacy Ratio	35.92%	42.66%	-15.80

Review of Operations

Paisalo is engaged in the business of providing convenient and easy loan to financially excluded at bottom of India''s economic pyramid through its numbers of financial products which inter-alia includes SME & MSME Loans, Income Generation Loans for business/self-employment purpose and Business Correspondent. The Company has served more than 4.29 Lakhs customers since its inception and expanded it presence in 21 States of the Country with 2455 touch points. During the period under review, Company''s total disbursements reached to INR 35,902.40 Million and it has posted 91.17 % increase in the Net Profit after tax for FY 24 over FY 23. During this period Gross NPA and Net NPA stood at 0.21% and 0.02% respectively.

Paisalo is one of the leading NBFC in the market in providing small-ticket income generation loans through co-lending arrangements for this company has entered into co-lending agreements with several banks including State Bank of India, Bank of Baroda, UCO Bank, Punjab National Bank and Karnataka Bank. This partnership capitalizes on Paisalo''s distribution network and the bank''s low cost of funds, allowing to serve the unbanked population of the country. Through our digital underwriting platform, we combine the advantages of bank capital with our specialized risk management expertise, creating a position in the small ticket size co-lending segment and allow us to maintain lower risk profile, setting it apart from peers in the market.

Key Ratio

The Key Ratio for Financial Year ended March 31, 2024:

Current Ratio	3.87
Debt- Equity Ratio	1.87
Debt Service Coverage Ratio	0.78
Return on Equity Ratio	13.46
Net Capital Turnover Ratio	0.49
Net Profit Ratio	39.42
Return on Capital Employed	12.69
Return on Investments	0.16

Net Worth and Capital Risk Adequacy Ratio (CRAR)

The Net Worth of the Company (Standalone) increased to INR 13210.58 Million as on March 31, 2024 from INR 11,609.99 Million as on March 31, 2023.

The Capital Risk Adequacy Ratio (CRAR) stood at 35.92% as on March 31, 2024 as against 40.34 % as on March 31, 2023, which is much above the requirement as stipulated by Reserve Bank of India.

Awards and Recognition

For the period under review, Company was awarded by Financial Inclusion Department of State Bank of India, Head Office Lucknow, for "Best Achiever" in PMSBY, PMJDY, APY and Financial Inclusion Department of State Bank of India, LHO Kolkata for "Best Performance" ACC enrolled with eKYC (%) & "1^st Runner Up" Total A/c Enrolment (%).

Issue of Bonus Equity Shares

Pursuant to resolution passed by the Shareholder of the Company on March 8, 2024, Company has allotted 44,90,21,990 (Forty Four Crores Ninety Lakhs Twenty One Thousand Nine Hundred and Ninety only) fully paid up Equity Shares of Re. 1/-(Rupee One only)each as Bonus Issue on March 21, 2024 in 1:1 ratio i.e. 1 (One) Equity Share for every 1 (One) fully paid up Equity Share of Re. 1/- (Rupee One only) each to the Shareholders holding equity shares on record date i.e. March 20, 2024.

Share Capital

The Authorized Share Capital of the Company stood at INR 1,25,00,00,000.00 consisting of 1,20,00,00,000 Equity Shares of Re. 1/- (Rupee One only) each and 50,00,000 Preference Shares of Rs. 10/- (Rupees Ten only) each. Consequent to allotment of Bonus Equity Shares, the Issued Share Capital, Subscribed Share Capital and Paid-up Share Capital of the Company has been increased and accordingly as on March 31, 2024, the same stood as under:

1.	Issued Share Capital	INR 89,81,68,980.00 Consisting of 89,81,68,980 Equity Shares of face value of INR 1/- each
2.	Subscribed Share Capital	INR 89,81,68,980.00 Consisting of 89,81,68,980 Equity Shares of face value of INR 1/- each

3.	Paid-up Share Capital	INR 89,80,43,980.00 Consisting of 89,80,43,980 Equity Shares of face value of INR 1/- each fully paid-up and
		INR 62,500 for 1,25,000 forfeited equity shares of face value of INR 1/- each (amount originally paid-up @INR 0.50 each)

Debt Securities/Instruments and Utilization of Fund Raised from it

During the year under review, Company has raised INR 1,377.50 Million by issuing Listed Secured Rated Non-Convertible Debentures on private placement basis and INR 1,011.00 Million by issuing Unlisted Unsecured Unrated Non-Convertible Debentures on private placement basis. The fund raised from such issue were utilized for the financing activities. In case of Secured Debentures, an asset cover of at least 110% is maintained at all times.

During the year, the Company has also raised funds for short term purpose through listed/unlisted Commercial Papers.

The Fund so raised during the year from debt securities/instruments had been utilized for the same purpose as mentioned in the Offer Letters.

As on March 31, 2024 outstanding debt securities/instruments were as under:

1.	Non Convertible Debentures	INR 5,578.50 Million
2.	Commercial Papers	INR 720.00 Million

Bank Finance

Your Company raised funds for its working capital and business requirements from various Banks and the total amount of Bank loan outstanding as on March 31, 2024 was INR 17,494.45 Million as against INR 13,017.52 Million on March 31, 2023.

Timely Repayment of Debt Liabilities

During the year under review, the Company has duly serviced all its debts obligations in time.

During the year the Company has also make payment of interest and principal amount on Non-Convertible Debentures as per the terms of issue(s).

Accordingly, there is no event of default of interest/principal payment during the year.

Dematerialisation of Equity Shares

Equity Shares of the Company are compulsorily tradable in demat form. As on March 31, 2024, 99.99% of the Equity Shares of total outstanding fully paid-up equity shares of the Company are in Dematerialized form and only 20,010 Equity Shares of INR 1/- each out of total Equity Shares were in physical form.

Dividend Distribution Policy

In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company had formulated a Dividend Distribution Policy of the Company, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/or retaining profit earned. The policy is available on the website of the Company at https://paisalo.in/pdf/corporate governance/Dividend Distribution Policy.pdf

Dividend

RBI vide its circular dated June 24, 2021 has laid down a framework for declaration of dividend by NBFCs. Accordingly, the Board of Directors, after taking into account various aspects and in compliance with the said circular, recommend for consideration of the members at the ensuing Annual General Meeting (''AGM''), payment of final dividend of INR 0.10 (10%) per equity shares of face value of INR 1.00. The dividend recommended is in accordance with the principles and criteria set out in the Company''s dividend distribution policy. Total dividend proposed for the year does not exceed the ceilings specified in said circular/ RBI Master Directions.

The dividend, if declared, at the ensuing AGM will be taxable in the hands of the Members of the Company pursuant to Income Tax Act, 1961.

Unclaimed Dividend and Unclaimed Shares

Pursuant to Rule 5(8) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your company furnished a statement / information through Form IEPF 2 to the Ministry of Corporate Affairs, of the unclaimed dividends amounting to INR 1,33,607.38 as on the date of financial year ended on March 31, 2023. During the year under review, there was an amount of INR 20,451.00 of unpaid and unclaimed dividend for a period of 7 years from the date it was lying in the unpaid dividend, accordingly, pursuant to provisions of Section 124(5) of the Companies Act,

2013, INR 20,451.00 have been transferred in the Investor Education and Protection Fund (IEPF) of the Central Government in November 8, 2023.

The Company has uploaded the details of unclaimed dividend on the Company''s website at https://www.paisalo.in and also on website specified by the Ministry of Corporate Affairs http://www.iRpf.gov.in/IFPF/sRrvices.html. IEPF is holding 11,740 Shares of the Company, at the end of the year under review.

Deposit

Your Company is registered with the Reserve Bank of India (RBI), as a Non-Deposit taking Systemically Important Middle Layer NBFC (NBFC-ND-SI) under Section 45-IA of the RBI Act, 1934. Your Directors hereby report that the Company has not accepted any public deposits during the year under review and it continues to be a Non-Deposit taking Non-Banking Financial Company in conformity with the guidelines of the RBI. As such, no amount of principal and interest was outstanding during the year.

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

2014.

Credit Rating

M/s Infomerics Valuation and Rating Pvt. Ltd. assigned following rating to Company''s instruments:

Sr. No.	Instrument/Facility	Amount (INR in Million)	Rating Assigned
1	Fund Based Facilities from Banks- Long Term	21000.00	IVR AA/Stable Outlook (IVR Double A with Stable Outlook)
2	Non-Convertible Debentures	2350.00
3.	Commercial Paper	4500.00	IVR A1 (IVR A One Plus)

Board of Directors, Key Managerial Personnel (KMP) and Board Meetings

The Company''s Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, RBI''s Corporate Governance provisions as applicable on the Company and provisions of the Articles of Association of the Company. The Company''s Board has been constituted with requisite diversity, wisdom and experience commensurate to the business of your Company. As on March 31, 2024, The Board of Directors of the Company consist of 9 (Nine) Directors, out of whom five are Non-Executive Independent Directors.

Details of the Directors are as follows:

S. No.	Name of Directors	DIN	Designation as Director	Category
1.	Mr. Sunil Agarwal	00006991	Managing Director	Executive Director
2.	Mr. Harish Singh	00039501	Whole Time Director	Executive Director
3.	Mr. Anoop Krishna	08068261	Whole Time Director	Executive Director
4.	Mr. Santanu Agarwal	07069797	Deputy Managing Director	Executive Director
5.	Mr. Gauri Shankar	06764026	Independent Director	Non-Executive Director
6.	Mr. Naresh Kumar Jain	01281538	Independent Director	Non-Executive Director
7.	Mr. Raman Aggarwal	00116103	Independent Director	Non-Executive Director
8.	Mrs. Nisha Jolly	08717762	Independent Director	Non-Executive Director
9.	Mr. Vijuy Ronjan	09345384	Independent Director	Non-Executive Director

Appointment/Reappointment of Directors:

Executive Director

During the year under review, Shareholders vide their resolutions dated May 5, 2023 confirmed the reappointments of :

1. Mr. Sunil Agarwal as Managing Director of the Company for a period of five years commencing from February 20, 2023,

2. Mr. Anoop Krishna as Whole-Time Director designated as Executive Director for a period of three years commencing from February 23, 2023,

3. Mr. Harish Singh as Whole-Time Director designated as Executive Director and Chief Financial Officer for a period of five years commencing from August 1, 2023.

Independent Director

Shareholders vide their resolution dated May 5, 2023 has appointed Mr. Nirmal Chand (DIN: 10041305) as Independent Director, who was previously appointed as an Additional Director by the Board on March 27, 2023.

Cessation of Director

During the year under review, Mr. Nirmal Chand (DIN: 10041305) ceased to be the Director of the Company w.e.f. July 19, 2023 as he resigned from the Directorship due to potential conflict of interest as provided by him in his resignation letter dated July 19, 2023. The Board places on record its sincere appreciation for the valuable contribution made by him during his short tenure as Independent Director on the Board of the Company.

Recommendation for Reappointment of Independent Directors

In terms of Section 149 (10) of the Companies Act, 2013, an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company but shall be eligible for re-appointment on passing of a Special Resolution by the Shareholders of Company, accordingly, based on the recommendation of Nomination and Remuneration Committee of the Company, the Board of Directors recommends re-appointment of Mr. Raman Aggarwal and Mr. Vijuy Ronjan as Independent Directors, whose first terms are completing on October 14, 2024 and October 7, 2024 respectively, for second consecutive term of 5 years, for approval through Special Resolution by Shareholders of the Company.

Brief particulars of Mr. Raman Aggarwal and Mr. Vijuy Ronjan as required under the Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Notice convening the 32^nd Annual General Meeting of the Company.

Retirement by Rotation

During the year under review, Mr. Anoop Krishna (DIN 08068261), who retired at the 31^st Annual General Meeting, was reappointed as an Executive Director of the Company.

In terms of Section 152 of Companies Act, 2013, Mr. Santanu Agarwal, Executive Director (DIN 07069797), is liable to retire by rotation at the 32^nd Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment as Director. The Board of Directors of the Company in its meeting held on August 09, 2024 based on the recommendation of Nomination and Remuneration Committee recommended to the Members re-appointment of Mr. Santanu Agarwal as a Director of the Company, liable to retire by rotation.

Brief particulars of Mr. Santanu Agarwal as required under the Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015 is provided in the Notice convening the 32nd Annual General Meeting of the Company.

Retirement of Mr. Naresh Kumar Jain as an Independent Director

Section 149 (11) of the Companies Act, 2013 provides that no person can hold office of Independent Director for more than two consecutive terms. Accordingly whereas Mr. Naresh Kumar Jain whose two consecutive terms of ten years as Independent Director is being completing on August 13, 2024 and pursuant to Section 149 (11) of the Companies Act, 2013, he can not be re-appointed for further term, hence his current association with the Company as Independent Director will end on August 13, 2024. The Board of Directors appreciate the valuable services rendered by him and is grateful for his advices and guidance to the Board and Management of the Company during his tenure as an Independent Director and wishes him for his healthy and prosperous life ahead.

KMPs

Save and except as stated above, there are no other changes in the KMPs during financial year 2023-24.

Declaration of Independence by Independent Directors & adherence to the Company''s Code of Conduct for Independent Directors

Pursuant to Section 149 (7) of the Companies Act, 2013, all Independent Directors had given declaration and necessary confirmation of eligibility under Section 149(6) of the Companies Act, 2013 and that they qualify to be Independent Directors pursuant to the Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014. In terms of Regulation 25(8) of SEBI Listing Regulations, the Independent Directors have confirmed their eligibility as per Regulation 16 (1) (b) of Listing Regulations and that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Further, the Board has ensured the veracity of the disclosures and opines that there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, all the Independent Directors have affirmed that they have adhered and complied with the Company''s Code of Conduct for Independent Directors which is framed in accordance with Schedule IV of the Act. All the Directors meet the ''Fit and Proper'' criteria as per the policy of the Company and as stipulated by RBI.

Meetings of Board

During the year under review, a total of Six Meetings of the Board of Directors of the Company were held, i.e., on April 27, 2023; May 11, 2023; July 24, 2023; October 26, 2023; January 31, 2024 and February 22, 2024. Details of Board composition and Board Meetings held during the financial year 2023-24 have been provided in the Corporate Governance Report which forms part of this Report.

Audit Committee

The Company has an Audit Committee duly constituted in accordance with the provisions of Section 177 of the Companies Act, 2013, RBI Guidelines and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. All the members of the Committee have expertise in finance and have knowledge of accounting and financial management. The scope of the activities of the Audit Committee, as set out in Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and read with Section 177 of the Companies Act, 2013 and the RBI Regulations for NBFCs. The composition of the Committee is as follows: Mr. Gauri Shankar, (Independent Director), Chairman; Mr. Naresh Kumar Jain (Independent Director), Member and Mr. Harish Singh (Executive Director), Member.

The detailed composition of the Audit Committee & its terms of reference and the details of meetings attended by the Audit Committee members are provided in Corporate Governance Report which forms part of the Annual Report.

During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors of the Company.

Stakeholders Relationship Committee

The Stakeholder Relationship Committee of the Board consists of Independent Directors namely Mr. Naresh Kumar Jain, as Chairperson and Mr. Raman Aggarwal, Mr. Vijuy Ronjan as Members of the Committee. The composition, terms of reference and details of meetings held during the year are disclosed in the Report on Corporate Governance.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee (''NRC'') recommends to the Board the suitability of candidates for appointment as Director/Managing Director, Key Managerial Personnel and the remuneration packages payable to them. The composition of the Nomination and Remuneration Committee & its terms of reference and the details of meetings attended by the members are provided in Corporate Governance Report which forms part of the Annual Report.

Annual Evaluation of Board, its Committees and Individual Directors:

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 17(10) read with Part D of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI guidance note on Board Evaluation for listed companies issued vide circular (Ref. no. SEBI/HO/CFD/CMD/ CIR/P/2017/004) dated January 5, 2017, The Board has carried out an annual evaluation of its own performance, the Board Committees and individual Directors. Through a structured questionnaire feedback from each Director was obtained as a part of performance evaluation. Basis on the feedback received from the Directors, the Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors, the Managing Director including various Committees established by the Board at their respective meetings.

The performance evaluation of individual Directors, including the Managing Director, was conducted based on several criteria. These included professional conduct, fulfillment of roles and responsibilities, effective discharge of duties, contributions to Board/Committees/Senior Management, preparedness on agenda items and their contribution to decision-making processes. Similarly, the performance evaluation of the Board as a whole and its Committees involved

soliciting feedback from Directors and Committee Members. This feedback encompassed various criteria such as the structure and composition of the Board, effectiveness of Board processes, adequacy of information provided, clarity of roles and responsibilities, opportunities for professional development, functioning of both the Board and its Committees, establishment and determination of Committee responsibilities and the quality of the relationship between the Board and management. These evaluations are integral to ensuring continuous improvement and effectiveness in governance practices within the Company.

The Independent Directors in their separate meeting held on January 31, 2024 under Regulation 25(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of the Companies Act, 2013 had:

i. reviewed the performance of Non-Independent Directors and the Board of Directors as a whole;

ii. reviewed the performance of the Managing Director of the Company, taking into account the views of executive and non-executive Directors; and

iii. assessed the quality, quantity and timelines of flow of information between the Company management and the Board of Directors that was necessary for the Board of Directors to effectively and reasonably perform their duties.

The entire performance evaluation process was completed to the satisfaction of Board.

With the spirit of wealth creation for the Stakeholders of the Company, your Directors are committed to give their efforts towards the development of the Company.

Policy on Directors Appointment and Remuneration

To manage the Company''s affairs in effectively and efficiently, the Company has always maintained balanced composition of Executive and Independent Non-Executive at Board level. All appointments at Board level are made adhering to the mandates of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and guidelines issued by the Reserve Bank of India.

Generally, Managing Directors and Whole-Time Directors (Executive Directors) are appointed for a term of not more than five years. Independent Directors serve a term of up to five consecutive years on the Board. Based on their performance evaluation, eligibility for reappointment and recommendations by the Nomination and Remuneration Committee, Independent Directors may be reappointed by the Board for another consecutive term upto five years, subject to Shareholders'' approval. Candidates considered for Board appointments undergo through evaluation based on criteria including personal and professional ethics, integrity, values and character; understanding and alignment with the Company''s vision, mission and values; prominence in their respective fields; professional skills, knowledge, expertise and financial literacy. Additional competencies and skills deemed essential for effective governance are also taken into account during the evaluation process.

In addition to the above, the candidature of an Independent Director is also evaluated in terms of the criteria for determining independence as stipulated under Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, guidelines issued by RBI and other applicable regulations or guidelines. In case of re-appointment of Director, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level. All appointments at senior level are strictly based on meritocracy. Directors, Key Managerial Personnel and Senior Management Personnel retire in accordance with the provisions of the Companies Act, 2013 and the Company''s policies. The Company has Remuneration Policy for Directors, KMPs and other employees, which is reviewed by the Board of Directors of the Company, time to time, the policy represents the overarching approach of the Company for the remuneration of Director, KMPs and other employees.

The relevant Policy(ies) have been uploaded on the website of the Company and can be accessed through the link https:// paisalo.in/home/investorrelation.

Compliance with the Code of Conduct of Board of Directors and Senior Management

The Board of Directors and Senior Management of the Company have complied with the Company''s Code of Conduct applicable to Board of Directors and Senior Management. In this regard declaration signed by the Managing Director is annexed and forms part of this Report.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c), read with Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, the Directors, to the best of their knowledge and belief, hereby confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure has been made in following the same;

b) appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

d) the annual accounts have been prepared on a going concern basis;

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

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors & Audit Reports

Statutory Auditor and Statutory Audit Report:

On April 27, 2021 Reserve Bank of India (RBI) vide its notification RBI/2021-22/25 Ref. No. DoS. CO. ARG/SEC.01/08.91.001/2021-22 inter alia, providing the Eligibility Criteria of Statutory Auditors for appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs including HFCs).

In terms para 8 of said guidelines, the Company can appoint Statutory Auditor for a continuous period of three years, therefore, the Company in the 29^th Annual General Meeting held on September 25, 2021 appointed M/s Manish Goyal & Co., Chartered Accountants as the Statutory Auditors of the Company until the conclusion of the 30^th Annual General Meeting of the Company to fill the casual vacancy which arouse due to the resignation of M/s D Tayal & Jain, Chartered Accountants in lieu of the aforesaid guidelines. Accordingly, the Company in the 30^th Annual General Meeting reappointed M/s Manish Goyal & Co., Chartered Accountants as the Statutory Auditors of the Company for a further period of two years commencing from the conclusion of the 30^th Annual General Meeting until the conclusion of the 32^nd Annual General Meeting of the Company.

Since the tenure of M/s Manish Goyal & Co., Chartered Accountants will be expiring in the ensuing Annual General Meeting to be held in the year 2024 therefore, the Company has received consent from m/s Saket Jain & Co. Accordingly, to comply with the provisions of aforesaid guidelines regarding appointment of Statutory Auditor and on the recommendation of the Audit Committee, Board of Directors of the Company has recommended to appoint M/S Saket Jain & Co., Chartered Accountants, having Firm Registration no. 014685N who is fulfilling the eligibility norms as per RBI Guidelines, the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as Statutory Auditors of the Company for a period of three year commencing from the conclusion of 32^nd Annual General Meeting till the 35^th Annual General Meeting of the Company. The aforesaid appointment will be placed before the Members, at 32^nd Annual General Meeting for their approval.

The Report given by the Statutory Auditor M/s Manish Goyal & Co., Chartered Accountants, on the financial statement of the Company for the financial year 2023-24 is part of the Annual Report. The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments under Section 134 of the Companies Act, 2013. There are no qualifications, reservations, adverse remarks or disclaimers in Auditor''s Report for the financial year 2023-24.

Secretarial Auditor and Secretarial Audit Report of the entity:

Pursuant to Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company had appointed M/s. Satish Jadon & Associates, Practicing Company Secretaries for conducting Secretarial Audit for the financial year ended March 31, 2024 and to submit Secretarial Audit Report in Form No. MR-3. There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors, in their Audit Report for the financial year 2022-23.

Pursuant to Regulation 24A(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019, issued by the Securities and Exchanges Board of India, Nupur Finvest Private Limited a Material Subsidiary of the Company has obtained Secretarial Audit Report for financial year ended March 31, 2024 from M/s. Satish Jadon & Associates, Practicing Company Secretary.

Copy of the Secretarial Audit Reports received from M/s. Satish Jadon & Associates in the prescribed Form No. MR-3 are annexed to this Board''s Report and marked as Annexure A.

There are no qualifications, reservations, adverse remarks or disclaimer in the above Secretarial Audit Reports.

Pursuant to circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019, issued by the Securities and Exchanges Board of

India and Regulation 24A(2) of SEBI (LODR) Regulations, 2015, the Company has obtained Secretarial Compliance Report for financial year ended March 31, 2024, from Practicing Company Secretary on compliance of all applicable SEBI Regulations and circular/guidelines issued thereunder and the copy of same has been submitted with the Stock Exchanges within the prescribed due date.

Fraud Reported by Auditors under Section 143(12)

During the period under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee/Board or Central Government any instances of fraud in the Company by its officers or employees under Section 143(12) of the Companies Act, 2013 and therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

Secretarial Standards

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Maintenance of Cost Records

The maintenance of cost records, for the services rendered by the Company, is not required pursuant to Section 148 (1) of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014.

Particulars of Loans, Guarantees or Investments Under Section 186 of Companies Act, 2013

Being RBI registered Non-Banking Financial Company and engaged in the business of giving loans in ordinary course of its business, accordingly, pursuant to Section 186(11) of the Companies Act, 2013 the provisions of Section 186, except SubSection 1 of the said Section, shall not apply on the Company, hence disclosure under Section 134 (3) (g) of the Companies Act, 2013, of particulars of the loans given securities provided under Section 186 of the Companies Act, 2013 is not applicable to the Company.

The details of Investment made by the Company have been disclosed in the note no. 6 of the Standalone Financial Statement for the year ended March 31, 2024. The Company has given its guarantee only for the credit facilities availed by its Wholly Owned Subsidiary M/s. Nupur Finvest Private Limited.

Particulars of Contracts or Arrangements with Related Parties

The Board of Directors of the Company has formulated a policy on materiality of Related Party Transactions and dealing with Related Party Transactions ("RPT Policy"), pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The same is displayed on the website of the Company. This policy deals with the review and approval of related party transactions. All related party transactions are placed before the Audit Committee for review and approval.

Since all related party transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore details required to be provided under the provisions of Section 134(3)(h) of the Companies Act, 2013 in the prescribed Form AOC-2 is not applicable to the Company. The Directors draw attention of the Members to note no. 37 of the Notes to Standalone Financial Statements for the year ended March 31, 2024 which sets out details of Related Party Transactions pursuant to Indian Accounting Standard -24 (Ind AS-24).

Policy on materiality of related party transactions and on dealing with related party transactions is displayed on the website of the Company at https://paisalo.in/pdf/corporate governance/Policy on related party transactions.pdf.

Change in the Nature of Business, if any

During the period under review, there was no change in the nature of business of the Company.

Material Changes and Commitments, if any, Affecting the Financial Position of the Company

There have been no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year and the date of this Report.

Information on Material orders Passed by the Regulators or Courts or Tribunal

During the period under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future. Furthermore, no penalties were imposed by the RBI during the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As the Company is engaged in the financial services activities, its operations are not energy intensive nor does it require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, to the extent applicable, are as follows:

• being a Non-banking Finance Company, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.

• Foreign Exchange earnings for the Company during the financial year under review was nil and Company''s Foreign Exchange outgo during the financial year under review was INR 2,34,352 /-as against INR 2,31,219/- in the previous year

Corporate Social Responsibility

Your Company aspire to contribute positively to the community''s wellbeing as a part of Company''s vision and accordingly carries CSR initiatives in pursuant with Schedule VII of the Companies Act, 2013. In compliance with Section 135 of the Companies Act, 2013 read with Rules made thereunder and as amended from time to time, the Company has established the Corporate Social Responsibility Committee ("CSR Committee") and formulated Company''s CSR Policy, which is available on the website of the Company. The Company undertakes its CSR initiatives directly and/or through partnering with a trust/foundation, qualified to undertake CSR activities in accordance with Schedule VII of the Companies Act, 2013 (includes amendments thereto).

For the financial year 2023-24 the Board of Directors of the Company in their meeting held on May 11, 2023 approved INR 21.10 Million as the budget for CSR activities. During the financial year 2023-24, Company has spent INR 21.11 Million CSR fund in various activities. which are disclosed in the Annual Report on CSR activities for financial year ended March 31, 2024 under Section 135 annexed with this report as Annexure B.

Composition of CSR Committee is disclosed in Corporate Governance Section of this Annual Report as part of Board''s Report.

Business Responsibility and Sustainability Report

In adherence to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, the Business Responsibility and Sustainability Report (BRSR) for Financial Year 2024, outlining the Environmental, Social and Governance (ESG) initiatives of your Company, is an integral part of this Annual Report. Additionally, this report provides comprehensive insights into the diverse ESG endeavours undertaken by your Company.

A comprehensive "Business Responsibility and Sustainability Report" (BRSR), formatted as per SEBI guidelines, detailing the Company''s initiatives, actions and processes towards ESG endeavours, is appended as Annexure C and forms part of this Report and can also be accessed on the Company''s website at www. paisalo.in.

Internal Financial Control

The Company is steadfast in its commitment to enhance the effectiveness of internal financial controls and processes. This dedication aims to facilitate the efficient conduct of business operations, ensure the security of assets, prevent and detect frauds and errors, maintain the accuracy and completeness of accounting records and ensure the timely preparation of reliable financial information.

The Company has implemented robust internal controls to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information. These controls are aligned with the size, scale and complexity of operations and ensure compliance with relevant policies and statutes. As the organization grows and operations become more intricate, these controls also enhance the prevention and detection of frauds and errors. The Board of Directors is of the opinion that the Internal Financial Controls pertaining to the financial statements are adequate.

The Company''s internal control framework is reinforced through a comprehensive program of internal and external audits, along with regular reviews by management. This structured approach ensures the reliability of financial and other records for preparing financial information and maintaining asset accountability. Competent professionals have been engaged by the company to conduct internal audits, evaluating the adequacy and effectiveness of its internal financial control system.

The Internal Audit team operates to assist the Audit Committee and Risk Management Committee. They conduct thorough reviews of risk assessments and associated management action plans. The findings from Internal Audit Reports and risk-

related reports are periodically reviewed by both Committees.

Furthermore, the efficacy of internal control systems undergoes periodic testing by Internal Auditors, while the Internal Control over financial reporting is tested and certified by Statutory Auditors.

The Company''s Internal Financial Control System is continuously adapted to accommodate the evolving business landscape and to adhere to applicable laws, regulations, statutory and accounting requirements. Throughout the year, there have been no significant observations indicating inefficiencies or inadequacies in these controls.

Risk Management

NBFCs are mandated to establish a robust framework for Risk Management Systems. In compliance with this requirement, our Company has not only constituted an Audit Committee but also established a Risk Management Committee and an Assets Liability Management Committee. The functioning and meeting frequencies of these Committees are detailed in the Report on Corporate Governance, which is an integral part of this report.

These Committees are instrumental in enabling the Board to effectively address risks associated with our business. They have developed and implemented a comprehensive Risk Management Policy aimed at ensuring sustainable business growth with stability. This proactive approach includes reporting, evaluating and resolving risks inherent in our operations. The Policy delineates identification of key events/risks impacting the business objectives of the Company and attempts to develop strategies to ensure timely evaluation, reporting and monitoring of key business risks. This framework, inter alia, provides the set of components that provide the foundations and organisational arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management throughout the Company. It covers principles of risk management, risk governance with roles and responsibilities, business control measures, principle risks and business continuity plan.

Our Company adheres to a disciplined risk management process and makes business decisions based on a balanced risk-reward paradigm.

Human Resources

Company''s industrial relations continued to be harmonious during the period under review. The Company strives to provide the best work environment with ample opportunities to grow and explore. Healthy, cordial and harmonious industrial relations have been maintained by the Company at all levels.

Disclosures as per the Provision of Section 197 (12) of Companies Act, 2013

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure D of this Report. As per the provisions of Section 136(1) of the of the Companies Act, 2013, the reports and accounts are being sent to the Members of the Company excluding the information regarding employee remuneration as required pursuant to Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The same is available for inspection and any Member interested in obtaining such information may write an email to the Company Secretary at [email protected] and the same will be furnished on such request. The Board of Directors affirm that the remuneration paid to employees of the Company is as per the Remuneration Policy of the Company.

Compliance with Provisions of Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013

The Company is committed to providing and promoting a safe and healthy work environment for all its employees. In adherence to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), the Company has formulated a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at Work Place . The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under ("POSH Act").

Throughout the financial year 2023-24, the Company received no complaints from employees concerning sexual harassment.

Compliance of Reserve Bank of India Guidelines

Paisalo Digital Limited is categorized as a Non-Deposit taking Systemically Important Middle Layer Non-Banking Finance Company. The Company continues to fulfil all the norms and standards laid down by RBI pertaining to non-performing assets, capital adequacy, statutory liquidity assets, etc. The Company has compliance with the applicable provisions of Master Directions - Non-Banking Financial Company Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions 2016 and Master Direction - Reserve Bank of India (Non-Banking Financial

Company - Scale Based Regulation) Directions, 2023 and all other applicable directions/regulations/circulars of RBI during the Financial Year 2023-24

Annual Return

In accordance with the provisions of Section 92(3) read with Section 134(3) (a) of the Act and the applicable rules, Annual Return of the Company for the financial year March 31, 2024, in the prescribed form, is hosted on website of the Company at https://paisalo.in/pdf/annual report/MGT-7 PAISAIO 2023-24.pdf.

Management Discussion and Analysis

The Management Discussion and Analysis report for the year under review as required under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided as a separate section forming part of this Annual Report.

Vigil Mechanism/Whistle Blower Policy

Company in accordance with the provisions of Section 177(9) of Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has established a vigil mechanism through the Company''s Whistle Blower Policy to deal with instances of fraud and mismanagement and to enable the Directors and Employees of the Company to report genuine concerns, about unethical behaviour, actual or suspected fraud or violation of Code of Conducts. The Policy also provide adequate safeguards against victimisation and make provision for direct access to the Chairman of the Audit Committee. The Policy is available on the website of the Company at www.paisalo.in. Details of vigil mechanism/whistle blower are included in the Corporate Governance Report, forming part of this Report.

During the financial year 2023-24, no cases under this mechanism have been reported.

Listing with Stock Exchanges

The equity shares (ISIN INE420C01059) of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The listing fees payable to both the exchanges for the Financial Year 2024-25 have been paid. The Secured Rated NCDs issued on Private Placement basis are listed on WDM segment of BSE.

Prevention of Insider Trading

The Company has implemented a Code of Conduct for Prevention of Insider Trading to regulate securities trading by Directors and designated employees. As part of this framework, the Company utilizes software with a structured digital database to maintain records of individuals with whom unpublished price sensitive information has been shared. This database includes details of the information shared and the names of such individuals, along with their Permanent Account Numbers (PAN). Company is also complied with the extending framework for restricting trading by Designated Persons ("DPs") by freezing PAN at security level.

The full text of the Code of Conduct for Prevention of Insider Trading is accessible on the Company''s website at: https:// www.paisalo.in/pdf/corporate governance/policy/Code of conduct for prevention of Insider Trading 24.pdf

Disclosures Under the Insolvency and Bankruptcy Code, 2016

No application for Bankruptcy under the Insolvency & Bankruptcy Code, 2016 ("IBC") was made against the Company during the financial year under review.

Further, there are no details required to be reported with regard to difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions as your Company has not done any settlement with any Bank or Financial Institutions since its inception.

Corporate Governance

Your Company believes that good corporate governance is the basis for sustainable growth of the business and effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. Your Company give prime importance to reliable financial information, integrity transparency, fairness, empowerment and compliance with law in letter and spirit.

In compliance with the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 read with Schedule V to the said Regulations, the Report on Corporate Governance for the financial year ended

March 31, 2024 forms an integral part of this report and is set out as separate section of this Report. The certificate from the Secretarial Auditor of the Company confirming compliance with the conditions of Corporate Governance is annexed to the Report on Corporate Governance.

Certificate from the Managing Directors and Chief Financial Officer

The certificate received from Mr. Sunil Agarwal, Managing Director & CEO and Mr. Harish Singh, Executive Director & Chief Financial Officer with respect to the financial statements and other matters as required under Part B of Schedule II to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report.

Acknowledgments

Your Board expresses sincere gratitude for the unwavering support and cooperation extended by all regulatory authorities of the Governments. Additionally, we extend heartfelt thanks to our Banks and other stakeholders, whom we consider indispensable partners in our journey of progress.

We deeply appreciate the tireless dedication of our employees and staff, including the management team led by the Executive Directors, who consistently demonstrate exemplary leadership in achieving commendable business performance year after year, despite challenges in the business environment.

To our esteemed Members, we are grateful for your steadfast support and trust. We also wish to acknowledge and commend the invaluable contributions of our Non-Executive Independent Directors. Their strategic guidance, wealth of knowledge, experience and wisdom have played a pivotal role in enabling the Company to make informed decisions and achieve its business objectives.

Looking ahead, we anticipate and value your continued support and cooperation.

Place : New Delhi For & on behalf of the Board of Directors of Paisalo Digital Ltd.

Date : August 09, 2024

Sd/- Sd/-

Sunil Agarwal Harish Singh

Managing Director & CEO Executive Director

DIN : 00006991 DIN : 00039501

---

Mar 31, 2023

The Board of Directors have pleasure in presenting the 31st Annual Report together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended March 31, 2023. This report read with Corporate Governance Report and Management Discussion & Analysis includes macro-economic scenario, governance philosophy, financial performance of the Company, business overview, opportunity and threats and various initiative taken by the Company.

FINANCIAL HIGHLIGHTS

The Standalone financial performance of the Company for the Financial Year 2022-23 is summarized below:

(INR in Million)
Particulars	FY 2022-23	FY 2021-22
Revenue from Operations	4,229.72	3,563.98
Less: Expenditure	2,945.53	2,500.06
Exceptional Item	45.89	0.02
Profit Before Tax (PBT)	1,238.30	1,063.91
Tax Expenses	321.38	276.76
Net Profit After Tax (PAT)	916.93	787.14
Total Comprehensive Income for the Period	916.93	787.14
Transfer to Reserve Fund U/S 45 IC(1) of the RBI Act, 1934	183.39	157.43
Transfer to General Reserve	630.0	550.00
Provisions of Standard Assets	(18.71)	(18.49)
Earnings per Share of Re. 1 each (EPS) (INR)	2.06	1.86
Net Worth	11,609.99	10,240.91
Assets Under Management (AUM)	32,203.70	24,719.40

RESULTS OF OPERATIONS AND STATE OF COMPANY''S AFFAIRS

Revenue from operations for the year ended March 31, 2023 has increased by 18.68 % at INR 4,229.72 Million over the corresponding previous year. The Net Profit of your Company for the financial year ended March 31, 2023 stood at INR 916.93 Million as against the Net Profit of INR 787.14 Million for the financial year ended March 31, 2022. Accordingly, the Net Profit for the financial year ended March 31, 2023 reflects a growth of 16.49 % over the corresponding Profit for the financial year ended March 31, 2022.

TRANSFER TO RESERVES

Under Section 45IC of the Reserve Bank of India Act, 1934, Non-Banking Financial Companies (NBFC) are required to transfer a sum not less than 20% of its net profits every year to Reserve Fund before declaration of any dividend. Accordingly, the Company has transferred INR 183.39 Million (previous year INR 157.43 Million) to Reserve Fund. Further, INR 630.00 Million has been transferred to General Reserve for financial year 2022-23.

SUBSIDIARY COMPANY

The Company has only one Wholly Owned Subsidiary viz. Nupur Finvest Private Limited, a registered Non-Deposit Taking Non-Banking Finance Company. Nupur Finvest Private Limited is engaged in finance activities. At the year ended March 31, 2023, the net worth of the Company stood at INR 561.47 Million. During the reporting period the subsidiary reported income of INR 502.18 Million and Profit Before Tax (PBT) and Profit After Tax (PAT) at INR 24.07

Million and INR 19.26 Million respectively.

During the FY 2023, no new subsidiary was incorporated/acquired. The Company does not have any Associate Company nor has entered into a Joint Venture with any other Company.

The Financial Statement of Subsidiary Company is also available in a downloadable format under the Investor section on the Company''s website at www.paisalo.in.

Pursuant to the provisions of Regulation 16 of SEBI (LODR) Regulations, 2015, Company has adopted Policy for Determining of Material Subsidiary which is available at Company''s website at https://wwwpaisalo.in/pdf/ corporate_governance/Policv_for_determining_material_subsidiarv.pdf

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the applicable provisions of Companies Act, 2013 including applicable Accounting Standard on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the

Financial Year ended March 31, 2023.

Consolidated financial performance of the Company financial year ended March 31, 2023 is summarized below:

(INR in Million)
Particulars	FY 2022-23	FY 2021-22
Revenue from Operations	4,731.89	3,922.23
Less: Expenditure	3,424.24	2,850.69
Exceptional Item	45.29	0.33
Profit Before Tax (PBT)	1,262.37	1,071.22
Tax Expenses	326.19	278.71
Net Profit After Tax (PAT)	936.19	792.51
Total Comprehensive Income for the Period	936.19	792.51
Earnings per Share of Re. 1 each (EPS) (INR)	2.10	1.87
AUM	34927.92	26972.60

REVIEW OF OPERATIONS

The Company is providing a number of financial products like Business Loans, SME & MSME Loans, Income Generation Loans for business/self-employment purpose. During the year under review, Company has posted 16.49 % increase in the Net Profit after tax from the finance business of the Company.

KEY RATIO

The Key Ratio for Financial Year ended March 31, 2023:

Current Ratio	2.38
Debt- Equity Ratio	1.58
Debt Service Coverage Ratio	0.58
Return on Equity Ratio	7.90%
Net Capital Turnover Ratio	0.37
Net Profit Ratio	21.68%
Return on Capital Employed	10.07%
Return on Investments	0.14%

DISBURSEMENTS

During the Financial Year 2022-23, total disbursements reached to INR 25,995.97 Million.

NUMBER OF CUSTOMERS

During the year under review the Customer outreach stood at 15,05,297.

CONVERSION OF FULLY CONVERTIBLE WARRANTS AND ISSUE OF EQUITY SHARES

In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Special Resolution passed by the Shareholders of the Company at Extraordinary General Meeting held on March 8, 2021, on receipt of initial warrant subscription amount of INR 460.01 Million equivalent to 25% of the warrant issue price as prescribed by the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 for allotment of Fully Convertible Warrants (''Warrants''), on March 20, 2021 the Company considered and allotted 26,10,000 Warrants to Promoter Group entities, on preferential basis. As per the terms of the issue of Warrants, conversion option can be exercised by Warrant holders at any time during the period of 18 (Eighteen) months from the date of allotment of warrants, in one or more tranches.

Out of total convertible warrants, 16,20,000 warrants had already been converted into equity shares during the financial year ended March 31, 2022 and balance 9,90,000 warrants had been converted during the reporting financial year.

As on March 31, 2023, no convertible warrants/ convertible securities were outstanding.

SHARE CAPITAL

During the financial year ended March 31, 2023 Warrant Holders opted to exercise their right to convert the

9.90.000 warrants into equity shares and paid 75% of issue price to convert 9,90,000 warrants into equity shares. Accordingly, 85,55,000 equity shares of INR 1/- each at premium of INR 69.50/- each on September 3, 2022 and

13.45.000 equity shares of INR 1/- each at premium of INR 69.50/- each on September 12, 2022, allotted to the warrant holders on conversion of warrants.

The Authorized Share Capital of the Company stood at INR 1,25,00,00,000.00 and consequent to allotment of equity shares on conversion of warrants, the Issued Share Capital of the Company, as on March 31, 2023, was stood at INR 44,91,46,990.00 consisting of 44,91,46,990 Equity Shares of face value of INR 1/- each and the Subscribed Share Capital of the Company, as on March 31, 2023, was stood at INR 44,90,84,490.00 consisting of 44,90,21,990 Equity Shares of face value of INR 1/- each and 1,25,000 forfeited equity shares of face value of INR 1/- each (amount originally paid-up @ INR 0.50 each) and the Paid-up Share Capital of the Company, as on March 31, 2023, was stood at INR 44,90,21,990.00 consisting of 44,90,21,990 Equity Shares of face value of INR 1/- each fully paid-up and INR 62,500 for 1,25,000 forfeited equity shares of face value of INR 1/- each (amount originally paid-up @ INR 0.50 each).

DISCLOSURE OF UTILIZATION OF FUNDS PURSUANT TO REGULATION 32(7A) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

During the year under review, the fund raised INR 523.46 Million (75% of issue price) through allotment of 99,00,000 equity shares of INR 1/- each on conversion of warrants had been utilized for general working capital, repay of borrowings and other corporate purpose as mentioned in the explanatory statement annexed to the Notice of Extra-Ordinary General Meeting, held on March 8, 2021 in which Special Resolution was passed by the Shareholders for preferential issue of Fully Convertible Warrants.

DEMATERIALIZATION OF EQUITY SHARES

Equity Shares of the Company are compulsorily tradable in demat form. As on March 31, 2023, 99.99% of the Equity Shares are held in demat form and only 40,060 Equity Shares of INR 1/- each out of total Equity Shares were held in physical form.

NET WORTH AND CAPITAL TO RISK ADJUSTED RATIO (CRAR)

The Net Worth of the Company (Standalone) increased to INR 11,609.99 Million as on March 31, 2023 from INR 10,240.91 Million as on March 31, 2022.

The Capital to Risk Adjusted Ratio (CRAR) stood at 40.34 % as on March 31, 2023 as against 42.92 % as on March 31, 2022, which is much above the requirement as stipulated by Reserve Bank of India.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company had formulated a Dividend Distribution Policy of the Company, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/or retaining profit earned. The policy is available on the website of the Company at https://paisalo.in/pdf/corporate_governance/ Dividend_Distribution_Policv.pdf

DIVIDEND

Your Board is pleased to recommend a final dividend of 10% on each fully paid equity share for Financial Year 2022-23. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company.

The dividend recommended is in accordance with the Company''s Dividend Distribution Policy and framework laid down by the Reserve Bank of India vide its circular dated June 24, 2021

The dividend, if declared, at the ensuing AGM will be taxable in the hands of the Members of the Company pursuant to Income Tax Act, 1961.

UNCLAIMED DIVIDEND AND UNCLAIMED SHARES

Pursuant to Rule 5(8) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your company furnished a statement / information through Form IEPF 2 to the Ministry of Corporate Affairs, of the unclaimed dividends amounting to INR 1,48,881.00 as on the date of financial year ended on March 31, 2022. During the year under review, there was an amount of INR 26,860.00 of unpaid and unclaimed dividend for a period of 7 years from the date it was lying in the unpaid dividend, accordingly, pursuant to provisions of Section 124(5) of the Companies Act, 2013, INR 26,860.00 have been transferred in the Investor Education and Protection Fund (IEPF) of the Central Government in November 2022. And During the year Company has transferred 5870 equity shares of INR 1/- each against which dividends were not claimed/paid for the 7 consecutive years.

As on March 31, 2023 following amount was lying in the unclaimed dividend account:

Financial Year	Type of Dividend	%	Dividend per share (in INR)	Dividend Declared in	Date of Dividend Declaration	Unclaimed divided amount (in INR)
2015-16	Final	10	1.00	24th AGM	30-09-2016	20,451.00
2016-17	Final	10	1.00	25th AGM	26-09-2017	17,858.00
2017-18	Final	10	1.00	26th AGM	29-09-2018	12,633.00
2018-19	Final	10	1.00	27th AGM	10-08-2019	13,814.00
2019-20	Final	10	1.00	28th AGM	08-09-2020	21,556.00
2020-21	Final	10	1.00	29th AGM	25-09-2021	35,707.00
2021-22	Final	10	0.10	30th AGM	30-09-2022	11,588.38
For details please refer the list available on Company''s website www.paisalo.in

DEPOSIT

During the year and review, the Company has not accepted any public deposits and as such, no amount on account of principal or interest on deposits from public, in terms of Section 73 of the Companies Act, 2013 was outstanding as on the date of the balance sheet.

BANK FINANCE

Your Company raised funds for its working capital and business requirements from various banks and the total amount of bank loan outstanding as on March 31, 2023 was INR 13,017.52 Million as against INR 10,261.10 Million on March 31, 2022.

During the year under review, your Company maintained banking relationships with 15 Banks.

FUND RAISING THROUGH ISSUE OF DEBENTURES

During the year under review, Company has raised INR 480.00 Million by issuing Unlisted Unsecured Unrated NonConvertible Debentures on private placement basis. The fund raised from such issue were utilized for the financing activities and other general purpose.

TIMELY REPAYMENT OF DEBT LIABILITIES

During the year under review, the Company has duly serviced all its debts obligations in time.

During the year, the Company has also make payment of interest and principal amount on Non-Convertible Debentures as per the terms of issue.

CREDIT RATING

M/s Infomerics Valuation and Rating Pvt. Ltd. assigned following rating to Company''s instruments:

Sr No.	Instrument/Facility	Amount (INR in Million)	Rating Assigned
1	Fund Based Facilities from Banks-Long Term	18000.00	IVR AA-/Stable Outlook (IVR Double A Minus with Stable Outlook)
2	Non-Convertible Debentures	1150.00
3.	Commercial Paper	1500.00	IVR A1 (IVR A One Plus)

BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL

The Company''s Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, RBI''s Corporate Governance provisions as applicable on the Company and provisions of the Articles of Association of the Company. The Company''s Board has been constituted with requisite diversity, wisdom and experience commensurate to the business of your Company.

APPOINTMENT/REAPPOINTMENT OF DIRECTORS

The Board of Directors based on recommendation of Nomination and Remuneration Committee in their meeting held on May 6, 2022 appointed Mr. Santanu Agarwal (DIN: 07 069797) as Additional Director in the category of Executive Director designated as Deputy Managing Director for five years we.f. May 6, 2022. On June 10, 2022 Members of the Company passed the Special Resolution through Postal Ballot for the appointment of Mr. Santanu Agarwal as Deputy Managing Director of the Company.

As per the provisions of Section 149(10) of the Companies Act, 2013 and in terms of appointment of Mr. Gauri Shankar, as Non-Executive Independent Director, his tenure of five year was completing on July 21, 2022, Accordingly, based on the recommendation of Nomination and Remuneration Committee and keeping in the view the knowledge and experience of Mr. Gauri Shankar, the Board of Director, in their meeting held on May 6, 2022 recommended to the Members for reappointment of Mr. Gauri Shankar as Non-Executive Independent Director another term of three consecutive years from July 22, 2022 upto July 21, 2025. Members of the Company, on June 10, 2023, passed the Special Resolution through Postal Ballot for the reappointment of Mr. Gauri Shankar as Non-Executive Independent Director of the Company for three years commencing from July 22, 2022.

Further, Board of Directors of the Company appointed Mr. Nirmal Chand (DIN: 10041305) as an Additional Director of the Company in the category of Non-Executive Independent Director, not liable to retire by rotation for a term of three consecutive years w.e.f. March 27, 20 23 subject to approval of Members of the Company. On May 5, 2023, Members passed Special Resolution through Postal Ballot for appointment of Mr. Nirmal Chand as Independent Director of the Company.

CHANGE IN DESIGNATION

During the year Members of the Company, on June 10, 2023, passed the Special Resolution through Postal Ballot for the appointment of Mr. Vijuy Ronjan n (DIN: 09345384), who was appointed as an Additional Director in the category of Non-Executive Independent Director by the Board we.f. October 8, 2021, as Non-Executive Independent Director of the Company for three years from his initial date of appointment as Non-Executive Independent Director viz. October 8, 2021.

The Board of Directors in their meeting held on May 6, 2022 changed the designation of Mr. Santanu Agarwal from Deputy CEO to Deputy Managing Director, the Members of the Company passed the Ordinary Resolution through Postal Ballot for appointment of Mr. Santanu Agarwal as Deputy Managing Director and for his remuneration as Deputy Managing Director on June 10, 2022.

CESSATION OF DIRECTOR

With deep regret, we report the sad demise of our Independent Director Mr. Pradeep Agarwal on August 2, 2022. Your Board would like to place on record their highest gratitude and appreciation for the guidance given by Mr. Pradeep Agarwal to the Board during his tenure as a Director. Paisalo benefited immensely from his invaluable guidance over the years. We knew him as a man of great intellect and vision who leaves behind a legacy of incredible commitment, dedication and a passion for business excellence. He was a true Karmayogi and a source of inspiration to all those whose lives he touched. He will remain in our memories for the rest of our lives.

RETIREMENT OF DIRECTOR BY ROTATION

During the year under review, Mr. Harish Singh (DIN: 00039501), who retired at the 30th Annual General Meeting, was re-appointed as an Executive Director of the Company.

In terms of Section 152 of Companies Act, 2013, Mr. Anoop Krishna, Executive Director (DIN 08 068261), is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment as Director. The Board Directors of the Company in its meeting held on July 24, 2023 based on the recommendation of Nomination and Remuneration Committee recommended to the Members re-appointment of Mr. Anoop Krishna as a Director of the Company, liable to retire by rotation. Brief particulars of Mr. Anoop Krishna as required under the Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015 is provided in the Notice convening the 31st Annual General Meeting of the Company.

KMPS

There was no change in the KMPs of the Company during the year 2022-23

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Sections 149(6) and 149(7) of the Companies Act, 2013; Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and RBI Corporate Governance Norms as applicable on the Company. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are the person of integrity and repute. They fulfil the conditions specified in the Companies Act, 2013 and the Rules made thereunder and are independent of the management of the Company. The Board also places on records its deep appreciation for their continuous guidance, support and contribution to the Management of the Company.

EVALUATION OF BOARD OF DIRECTORS

The Board has carried out an annual evaluation of its own performance, the Board committees and individual Directors pursuant to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Through a structured questionnaire, feedback from Directors was obtained as a part of performance evaluation. This questionnaire and criteria of performance was broadly based on the guidance note on the Board evaluation issued by SEBI on January 5, 2017.

Basis on the feedback received from the directors, the Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors, the Managing Director including various committees established by the Board at their respective meetings.

The performance evaluation of the individual Directors including the Managing Director, inter alia, was done based on the criteria such as professional conduct, roles and functions, discharge of duties, their contribution to Board/ Committees/senior management, preparedness on the issues to be discussed, contribution to the decision making, etc. The performance evaluation of the Board as a whole and its committees was made after seeking inputs from the Directors/committee members on various criteria such as structure and composition, effectiveness of the Board process, information, roles and responsibilities, professional development, functioning of the Board and its committees, establishment and determination of responsibilities of committees, and the quality of relationship between the Board and the management.

The performance evaluation of the Non-Independent Directors viz., Managing Director and Executive Directors and the Board as a whole was also carried out by the Independent Directors at their separate meeting held on February 9, 2023, considering the views of the Executive and the Non-Executive Directors.

The Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. Performance of the Board of Directors, its Committees and Individual Directors Mounting stakeholders'' expectations, challenges faced by the Companies to operate under fluctuating economic conditions and increased regulatory requirements have brought the quality of performance of the Board of Directors under greater scrutiny. The Board of Directors has recognized that it would be important for them to continually assess how effectively they are performing their roles against the objectives and the goals they have set for themselves. This growing recognition has resulted in Board evolutions as a critical structural tool for assessing Board effectiveness and efficiency.

The Directors expressed satisfaction with the evaluation process. The performance of the Director individually and collectively and performance of the Committees are found satisfactory.

With the spirit of wealth creation for the Stakeholders of the Company, your Directors are committed to give their efforts towards the development of the Company.

BOARD & COMMITTEES OF THE COMPANY BOARD OF DIRECTORS

As on March 31, 2023, there are ten members on the Board of the Company, out of ten members six are Non-

Executive Independent Directors. Board members of the Company having experience in the field of finance, banking, taxation, legal and compliance.

MEETINGS OF BOARD

During the year under review, a total of Six Meetings of the Board of Directors of the Company were held, i.e., on May 6, 2022; August 5, 2022; September 3, 2022; September 12, 2022; November 10, 2022 and February 10, 2023. Details of Board composition and Board Meetings held during the financial year 2022-23 have been provided in the Corporate Governance Report which forms part of this Report.

AUDIT COMMITTEE

The Audit Committee of the Board consists of Independent Directors namely Mr. Gauri Shankar, as Chairperson and Mr. Naresh Kumar Jain and Executive Director Mr. Harish Singh as Members. The composition, terms of reference and details of meetings held during the year are disclosed in the Report on Corporate Governance. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholder Relationship Committee of the Board consists of Independent Directors namely Mr. Naresh Kumar Jain, as Chairperson and Mr. Gauri Shankar and Mr. Raman Aggarwal as Members. The composition, terms of reference and details of meetings held during the year are disclosed in the Report on Corporate Governance.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee (''NRC'') recommends to the Board the suitability of candidates for appointment as Director/Managing Director, Key Managerial Personnel and the remuneration packages payable to them. The composition, terms of reference and details of meetings held during the year are disclosed in the Report on Corporate Governance.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company strives to maintain an appropriate combination of Executive, Non-Executive and Independent Directors. The Nomination & Remuneration Committee of the Company leads the process for Board appointments in accordance with the requirements of Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable rules or guidelines. All the Board appointments are based on meritocracy. Generally, the Managing Director and Whole-time Directors (Executive Directors) are appointed for a period of five years. Independent Directors of the Company are appointed to hold their office for a term of up to five consecutive years on the Board of your Company. Based on their eligibility for reappointment, the outcome of their performance evaluation and the recommendation by the Nomination and Remuneration Committee, the Independent Directors may be re-appointed by the Board for another term of five consecutive years, subject to approval of the Shareholders of the Company. The Directors, Key Managerial Personnel and Senior Management Personnel shall retire as per the applicable provisions of the Companies Act, 2013 and the policy of the Company. The potential candidates for appointment to the Board are inter-alia evaluated on the basis of personal and professional ethics, standing, integrity, values and character; appreciation of the Company''s vision, mission, values; prominence in business, institutions or professions; professional skill, knowledge and expertise; financial literacy and such other competencies and skills as may be considered necessary.

In addition to the above, the candidature of an Independent Director is also evaluated in terms of the criteria for determining independence as stipulated under Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, guidelines issued by RBI and other applicable regulations or guidelines. In case of re-appointment of Director, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level.

The Company has Remuneration Policy for Directors, KMPs and other employees, which is reviewed by the Board of Directors of the Company, time to time, the policy represents the overarching approach of the Company for the remuneration of Director, KMPs and other employees.

COMPLIANCE WITH THE CODE OF CONDUCT OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT

The Board of Directors and Senior Management of the Company have complied with the Company''s Code of Conduct applicable to Board of Directors and Senior Management. In this regard declaration signed by the Managing Director is annexed and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c), read with Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, the Directors, to the best of their knowledge and belief, hereby confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departure has been made in following the same;

b) Appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) Proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 have been taken for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

d) The annual accounts have been prepared on a going concern basis;

e) Internal financial controls to be followed by the Company had been laid down and such internal financial controls are adequate and operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS & AUDIT REPORTSSTATUTORY AUDITOR AND STATUTORY AUDIT REPORT

In terms of Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) issued by Reserve Bank of India vide its notification RBI/2021-22/25 Ref. No. DoS. CO. ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 and provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Members of the Company appointed M/s Manish Goyal & Co. Chartered Accountants, having Firm Registration no. 006066C, as the Statutory Auditors of the Company at the 30^th Annual General Meeting held on September 30, 2022 to hold office from conclusion of 30^th Annual General Meeting till the conclusion of 32^nd Annual General Meeting of the Company to conduct the audit of accounts for the financial year ending March 31, 2023 and March 31, 2024. M/s Manish Goyal & Co. Chartered Accountants, has audited the Company''s Financial Statements for the financial year ended March 31, 2023. The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments under Section 134 of the Companies Act, 2013. The Auditors'' Report to the Members for the year under review is unmodified, i.e. it does not contain any qualification, reservation or adverse remark.

The Report given by the Statutory Auditor M/s Manish Goyal & Co., Chartered Accountants, on the Financial Statement of the Company for the financial year 2022-23 is part of the Annual Report.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

In accordance with the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and as a measure of good Corporate Governance practice, Board of Directors in their Meeting held on February 10, 2023 has appointed M/s. Satish Jadon & Associates, Practicing Company Secretaries, as Secretarial Auditor of the Company to conduct Secretarial Audit of the Company for financial year ended March 31, 2023 and to submit Secretarial Audit Report in Form No. MR-3.

A copy of the Secretarial Audit Report received from M/s. Satish Jadon & Associates in the prescribed Form No. MR-3 is annexed to this Board''s Report and marked as Annexure A.

Pursuant to circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019, issued by the Securities and Exchanges Board of India and Regulation 24A(2) of SEBI (LODR) Regulations, 2015, the Company has obtained Secretarial Compliance Report for financial year ended March 31, 2023, from Practicing Company Secretary on compliance of all applicable SEBI Regulations and circular/ guidelines issued thereunder and the copy of same has been submitted with the Stock Exchanges within the prescribed due date.

There are no qualifications, reservations, adverse remarks or disclaimer in the above Secretarial Audit Report.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

MAINTENANCE OF COST RECORDS

The cost records as specified by the Central Government under Section 148(1) of the Act are not required to be maintained by the Company.

FRAUD REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTED TO THE CENTRAL GOVERNMENT

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Auditors of the Company have not reported about any fraud, which is being or has been committed in the Company by its officers or employees.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013

Being RBI registered Non-Banking Financial Company, pursuant to Section 186(11) of the Companies Act, 2013 the provisions of Section 186, except Sub-Section 1 of the said Section, shall not apply on the Company, hence disclosure under Section 134 (3) (g) of the Companies Act, 2013, of particulars of the loans given securities provided under Section 186 of the Companies Act, 2013 is not applicable to the Company. The details of Investment made by the Company have been disclosed in the note no. 6 of the Standalone Financial Statement for the year ended March 31, 2023. The Company has given its guarantee only for the credit facilities availed by its Wholly Owned Subsidiary M/s. Nupur Finvest Private Limited.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year ended March 31, 2023, transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were in the ''ordinary course of business'' and ''at arm''s length'' basis. During the year under review, your Company did not enter into any Related Party Transactions which require prior approval of the Members. All Related Party Transactions of the Company had approval of the Audit Committee and the Board of Directors, as required under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Subsequently, the Audit Committee and the Board have reviewed the Related Party Transactions on a quarterly basis. The Company has an internal mechanism for the purpose of identification and monitoring of Related Party Transactions. During the year under review, there has been no materially significant Related Party Transactions having potential conflict with the interest of the Company. Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore details required to be provided under the provisions of Section 134(3)(h) of the Companies Act, 2013 in the prescribed Form AOC-2 is not applicable to the Company. The Directors draw attention of the Members to note no. 37 of the Notes to the Financial Statements for the year ended March 31, 2023 which sets out details of related party transactions.

Policy on materiality of related party transactions and on dealing with related party transactions is displayed on the website of the Company at https://paisalo.in/pdf/corporate_governance/Policv_on_related_partv_transactions. pdf

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year and the date of this Report.

SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS

During the financial year 2022-23, there were no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Further, no penalties have been levied by the RBI or any other regulator during the year under review.

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

As the Company is engaged in the financial services activities, its operations are not energy intensive nor does it require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, to the extent applicable, are as follows:

- being a Non-banking Finance Company, the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.

- Foreign Exchange earnings for the Company during the financial year under review was nil and Company''s Foreign Exchange outgo during the financial year under review was INR 2,31,219/-

CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013 read with rules made thereunder, Company has constituted a Corporate Social Responsibility Committee, which framed a CSR Policy for the Company and same has been approved by the Board of Directors of the Company, which is available on the website of the Company. CSR Policy of the Company is reviewed, time to time,

For the financial year 2022-23 the Board of Directors of the Company in their meeting held on May 6, 2022 approved INR 17.45 Million as the budget for CSR activities. During the Year Company has spent INR 17.60 Million, CSR fund in various activities which are disclosed in the Annual Report on CSR activities for financial year ended March 31, 2023 annexed with this report as Annexure B.

Composition of CSR Committee is disclosed in Corporate Governance Section of this Annual Report as part of Board''s Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, top 1,000 listed entities based on market capitalisation are required to submit a BRSR with effect from the FY2023 Accordingly, the Company has adopted a Policy on BRSR and other ESG initiatives. A detailed BRSR in the format prescribed by SEBI describing various initiatives, actions and process of the Company towards the ESG endeavor has been hosted on Company''s website and can be accessed at https://wwwpaisalo.in/ and also annexed with this report as Annexure C

INTERNAL FINANCIAL CONTROL

The Company remains committed to improve the effectiveness of Internal Financial Controls and processes which would help in efficient conduct of its business operations ensure security to its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Company has put in place adequate internal controls with reference to accuracy and completeness of the accounting records and timely preparation of reliable financial information, commensurate with the size, scale and complexity of operations and ensures compliance with various policies and statutes in keeping with the organizations pace of growth, increasing complexity of operations, prevention and detection of frauds and errors. The Internal Financial Controls with reference to the financial statements are adequate in the opinion of the Board of Directors.

The internal control is supplemented by an extensive program of internal, external audits and periodic review by the Management. This system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. Competent professionals have been engaged by the Company for conducting internal audit, to examine and evaluate the adequacy and effectiveness of internal financial control system of the Company The Internal Audit team is responsible to assist the Audit Committee and Risk Management Committee on an independent basis with a complete review of the risk assessments and associated management action plans. The Internal Audit Reports and Risk related report are reviewed periodically by the Audit Committee and Risk Management Committee of the Company Efficacy of internal control systems are tested periodically by Internal Auditors and Internal Control over financial reporting is tested and certified by Statutory Auditors.

Internal Financial Control System of the Company is modified continuously in accordance with the dynamic changes in the business conditions and to comply with the applicable laws, regulations, statutory and accounting requirements.

During the year, no material or serious observations have been highlighted for inefficiency or inadequacy of such controls.

RISK MANAGEMENT

Risk management forms an integral part of the Company''s business operations and monitoring activities. The Company and its subsidiaries are exposed to a variety of risks, including liquidity risk, interest rate risk, market risk, credit risk, technology risk, operational risk, regulatory and compliance risk, reputational risk, business continuity risk, legal risk, competition risk, risks pertaining to pandemic, among others.

NBFCs are required to ensure that a proper framework on Risk Management System is formulated and put in place. For this purpose, the Company, in addition to Audit Committee, has also constituted Assets Liability Management Committee and Risk Management Committee, the details of the functioning of these Committees and its frequency of meetings are provided in Report on Corporate Governance forming part of this Report. These Committees are constituted to facilitate the Board to address the risk associated with the business of the Company and developed and implemented a Risk Management Policy to ensure sustainable business growth with stability and promote a proactive approach in reporting, evaluating and resolving risks associated with the Company''s business. The Policy also highlights the functions, responsibilities and role of the Committees and Board to address the risks associated with the Company and to mitigate/reduce the impact of the risk on the Company. The Company follows a disciplined risk management process and takes business decisions with balanced risk reward paradigm.

HUMAN RESOURCES

Company''s industrial relations continued to be harmonious during the period under review. The Company strives to provide the best work environment with ample opportunities to grow and explore. Healthy, cordial and harmonious industrial relations have been maintained by the Company at all levels.

DISCLOSURES AS PER THE PROVISION OF SECTION 197 (12) OF COMPANIES ACT, 2013

The information required pursuant to the provisions of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company has been appended as Annexure D of this Report. In terms of first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employee''s

particulars as required pursuant to provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary at [email protected] in this regard and same will be furnished on such request.

COMPLIANCE WITH PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company is committed to providing and promoting a safe and healthy work environment for all its employees. The Company has a detailed policy in place in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the "POSH”), Internal Complaints Committees (the "ICC”) has been set up to redress complaints, if any, received regarding sexual harassment and the Company has complied with provisions relating to the constitution of ICC under the POSH. During the financial year 2022-23, no complaints was received from any of the employees.

COMPLIANCE OF RESERVE BANK OF INDIA GUIDELINES

Your Company is categorized as a Non-Deposit taking Systemically Important Middle Layer Non-Banking Finance Company. Accordingly, during the year, the Company has not accepted any deposits from the public and there were no deposits which become due for repayment or renewal. The Company has complied with the ''Master Direction-Non-Banking Financial Company- Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, as amended from time to time and all other applicable Directions of RBI during FY 2022-23.

ANNUAL RETURN

In accordance with the provisions of Section 92(3) read with Section 134(3) (a) of the Act and the applicable rules, Annual Return of the Company as on March 31, 2023, in the prescribed form, which will be filed with Registrar of Companies/MCA, is hosted on website of the Company at https://paisalo.in/pdf/annual_report/MGT-7_ PAISALO 2022-23.pdf

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis report for the year under review as required under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided as a separate section forming part of the Annual Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The vigil mechanism as envisaged in the Companies Act, 2013, the rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company''s Whistle Blower Policy to enable the Directors and Employees of the Company to report genuine concerns, to provide for adequate safeguards against victimisation and make provision for direct access to the Chairman of the Audit Committee. Details of vigil mechanism/whistle blower are included in the Corporate Governance Report, forming part of this Report.

During the financial year 2022-23, no cases under this mechanism have been reported.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Company has also taken software containing structural digital database for maintaining names of persons with whom unpublished price sensitive

information is shared. The software contains details of information shared and the names of such persons with whom information is shared under this regulation along with the Permanent Account Number.

The Code requires pre-clearance for dealing in the Company''s securities and prohibits the purchase or sale of Company securities by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the trading window is closed. The Board is responsible for implementation of the Code. The Code is available on the website of the company at https://wwwpaisalo.in/pdf/corporate_governance/Code_of_conduct_for_prevention_of_insider_trading.pdf

CORPORATE GOVERNANCE

Your Company believes that good corporate governance is the basis for sustainable growth of the business and effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. Your Company give prime importance to reliable financial information, integrity transparency, fairness, empowerment and compliance with law in letter and spirit.

In compliance with the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 read with Schedule V to the said Regulations, the Report on Corporate Governance forms an integral part of this report and is set out as separate section of this Report. The certificate from the Secretarial Auditor of the Company confirming compliance with the conditions of Corporate Governance is annexed to the Report on Corporate Governance.

CERTIFICATE FROM THE MANAGING DIRECTORS AND CHIEF FINANCIAL OFFICER

The certificate received from Mr. Sunil Agarwal, Managing Director and Mr. Harish Singh, Executive Director and Chief Financial Officer with respect to the financial statements and other matters as required under Part B of Schedule II to the the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of this Report.

ACKNOWLEDGMENTS

Your Board acknowledges the support and co-operation received from all regulatory authorities of the Central Government and all State Governments in India. Your Board takes this opportunity to thank all its Banks and other stakeholders as it considers them essential partners in progress.

Your Board acknowledges and appreciates the relentless efforts of the employees and staff including the management team headed by the Executive Directors who always lead from the front in achieving a commendable business performance year on year despite a challenging business environment. Your Board is indebted for the unstinted support and trust reposed by you, the Members. Your Board wishes to place on record its deep appreciation of the Non-Executive Directors of the Company for their immense contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take right decisions in achieving its business goals. Your Board is also looking forward to continued support and co-operation in future.

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Mar 31, 2018

Board’s Report

TO

THE MEMBERS OF PAISALO DIGITAL LIMITED

The Board of Directors have pleasure in presenting the 26^th Board''s Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2018.

Financial Highlights

The standalone financial performance of the Company for the Financial Year 2017-18 is summarized below:

Rs, in Million)

Particulars	2017-18	2016-17
Total Income	2,874.96	2,495.18
Less: Expenditure	879.86	835.61
Profit Before Depreciation, Financial Cost & Tax (PBDIT)	1,995.10	1,659.57
Less: Financial Cost	1,147.62	883.75
Profit Before Depreciation & Tax (PBDT)	847.48	775.82
Less: Depreciation	4.26	3.96
Profit Before Tax (PBT)	843.22	771.86
Less: Tax Expenses	274.72	258.95
Net Profit After Tax (PAT)	568.50	512.91
Add: Profit b/f from the Previous Year	15.97	30.73
Profit Available for Appropriation	584.47	543.64
Dividend Including Tax	45.53	45.53
Provision for Standard Assets	19.28	14.52
Expenditure on CSR Activities	14.50	15.04
Transfer to General Reserve	380.00	350.00
Transfer to Reserve Fund (RBI Act)	113.70	102.58
Balance Carried to Balance Sheet	11.46	15.97

The Company has posted a profit after tax (PAT) of ''568.50 Million for FY 2017-18 as compared to a PAT of ''512.91 Million for FY 2016-17.

Subsidiary

Nupur Finvest Private Limited, a registered Non Deposit taking Non-Banking Finance Company, is the only Subsidiary Company, of which the Company owns one hundred percent shares.

Nupur Finvest Private Limited is engaged in business to provide MSME and income generation loans for self employment purpose. At the year ended March 31, 2018, the net worth of the Company stood at ''531.80 Million. During the reporting period the subsidiary reported a gross income of ''310.52 Million and Profit Before Tax (PBT) and Profit After Tax (PAT) at ''46.00 Million Lakhs and ''30.79 Million respectively.

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act, 2013 including applicable Accounting Standard on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the Financial Year 2017-18. Consolidated Turnover was ''3043.55 Million as against ''2665.42 Million in the previous year.

Review of Operations

The Company is providing a number of financial products like Business Loans, SME & MSME Loans, Income Generation Loans for business/self-employment purpose. During the year under review Company has posted 18.035% increase in the total finance business of the Company.

Disbursements

During the Financial Year 2017-18, total disbursements (including figures of Subsidiary) reached to ''I7655.29IMillion. The Company is focusing to maintain the asset quality of its loan portfolio without compromising the risk profile.

Number of Customers

Total Customers outreach stood at 878682 being increased by I3.30 % as compared to previous year.

Net Worth and Capital to Risk Adjusted Ratio (CRAR)

The Net Worth of the Company increased to Rs,6034.90 Million as on March 3I, 20I8 from Rs,5524.I0 Million as on March 3I, 20I7. The Capital to Risk Adjusted Ratio (CRAR) stood at 3I.67% as on March 3I, 20I8 as against 38.08% as on March 3I, 20I7 which is much above the requirement as stipulated by Reserve Bank of India.

Dividend

Your Board is pleased to recommend a final dividend of Rs,I/- (Rupee One only) per share i.e. I0% on each fully paid equity share of Rs, I0/- (Rupees Ten Only) for Financial Year 20I7-I8.

Pursuant to the provisions of Section I24 (5) of the Companies Act, 20I3, Interim/Final dividend for the Financial Year 2009-I0 and 20I0-II amounted to Rs,30,029/- and Rs,I,0I,929/- respectively, which were unpaid and unclaimed for a period of 7 years from the date it was lying in the unpaid dividend account has been transferred by the company to the Investor Education and Protection Fund (IEPF) of the Center Government.

Fixed Deposits

Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits was outstanding as on the date of balance sheet.

Launch of New App

"India is getting digital, so are we”, keeping this aphorism in mind your Company launched the App "PAISALO” in view to ease of finance and to eliminate the presence of the middle-man and to reduce corruption.

Through this mobile app any person who is in need of small finance can conveniently apply and borrow the amount ranging from Rs, I0,000 to ''50,000 from their digital device.

This app can be downloaded from Google Play Store and is available in two languages i.e. Hindi and English while availability in additional key regional languages will be part of our future growth strategy.

Name Change

Being a Non Deposit Accepting Systemically Important Non Banking Finance Company (ND-SI-NBFC) is engaged in the finance business and with the change of use of technology in the Company''s business and moving towards digitalized path, the Company w.e.f. January I2, 20I8, has changed its name from S. E. INVESTMENTS LIMITED to PAISALO DIGITAL LIMITED which in itself reflects the operations of the Company with its way of operation (finance with the use of digital platform). Further, your Board assures you that with the new name "Paisalo Digital Limited ” the Company is and will always remain true to its motto -H.Hid.hy ^tf:" "Money is trust property of society”.

To celebrate this moment of name change and change of Company scrip ID/code on the Stock Exchanges, an Opening Bell Ceremony was organised at NSE Mumbai on January 24, 20I8.

Scheme of Amalgamation of Agarwal Meadows Private Limited into the Company

The Board of Directors of the Company, in their meeting held on February 23, 20I8, has approved the Scheme of Amalgamation of Agarwal Meadows Private Limited into Paisalo Digital Limited, pursuant to such Scheme, if approved by the National Company Law Tribunal and Other Authorities, all the assets and liabilities of Agarwal Meadows Private Limited will be transferred and vested in the Company with effect from December 3I, 20I7, being Appointed Date for the purpose the Scheme and the Company will issue 59I8 fully paid-up equity share of ''I0/- each for every I00 equity shares of Agarwal Meadows Private Limited of '' I00/- each as consideration to the shareholders of Agarwal Meadows Private Limited

As on the date of this Board''s Report the Scheme has been submitted to the Stock Exchanges for their Observation Letter/ NOC and after getting the NoC from Stock Exchange company will submit the same to NCLT for its approval.

Issue of Unlisted Unsecured Non-Convertible Debentures

During the year under review, Company has raised ''280 Million through issue of Unlisted Unsecured I2% Non-Convertible Debentures of '' I0.00 Million each on private placement basis.

Directors and Key Managerial Personnel Change in Directors or KMP

The following changes took place in the composition of Board of Directors during the year under review:

Mr. Gauri Shankar was introduced on Board of the Company as an Additional Independent Director of the Company w.e.f. July 22, 20I7. Further on September 26, 20I7 in the 25^th Annual General Meeting of the Company his appointment was regularized and was appointed as the Independant Director of the Company for the term of the five years effective from July 22, 20I7.

Mrs. Bhama Krishnamurthy was introduced on the Board as the Additional Woman Independent Director w.e.f November 25, 20I7.

On November 25, 2017 Mr. Brij Lal Goel, Mrs. Anshu Gupta and Dr. Arun Gopal Agarwal resigned from the office of the Director of the Company.

The Board of the Company has appointed Mr. Anoop Krishna as an Additional Director of the Company w.e.f February 23, 20I8.

Further on April I2, 20I8, The Board of the Company has appointed Mr. Sunil Srivastava as an Additional Independent Director of the Company.

Other than that no other change took place in the Board of Directors of the Company. Appointment/Reappointment of Directors or KMP

In terms of Section I52 of Companies Act, 20I3, Mr. Harish Singh is liable to retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment.

Board of Directors in their Meeting held on January 30, 20I8 and May 2, 20I8 has reappointed Mr. Sunil Agarwal as Managing Director for further term of 5 years effecting from February 20, 20I8 and Mr. Harish Singh as Executive Director for further term of 5 year effecting from August I, 20I8, respectively and their such reappointment is proposed to be ratified in the upcoming Annual General Meeting.

Since the date of 25th Annual General Meeting of the Company, The Board of Directors has appointed Mrs. Bhama Krishnamurthy as Additional Independent Director, Mr. Anoop Krishna as Additional Professional Director and Mr. Sunil Srivastava has been appointed as Additional Independent Director of the Company to hold the office till the date of forthcoming Annual General Meeting. Keeping in the view the good experience, knowledge and expertise of all these Additional Directors in Banking Industry, Board believes that their association with the Company will be in the interest of the Company and will benefit the Company in its endeavours. Accordingly, Board recommends the appointment of Mrs. Bhama Krishnamurthy, Sunil Srivastava as Independent Director and Mr. Anoop Krishna as Professional Director in the forthcoming Annual General Meeting of the Company.

Number of Board Meetings

During the Financial Year 20I7-I8, Board of Directors met 8 times on April 28, 20I7, July 22, 20I7, August 23, 20I7, October 27, 2017, November 25, 2017, January 30, 2018 and February 23, 2018 (2:00 pm and 4:00 pm).

Declaration of Independence by Independent Directors

The Company has received the necessary declaration from each Independent Director in accordance with Section I49(7) of the Companies Act, 20I3, that he/she meets the criteria of independence as laid out in sub-section (6) of Section I49 of the Companies Act, 20I3 and Listing Regulation.

Policy on Directors Appointment and Remuneration

The Company strives to maintain an appropriate combination of Executive, and Independent Directors subject to a minimum of 3 (three) and maximum of 15 (fifteen) Directors, including at least one woman Director.

The Nomination & Remuneration Committee of the Company leads the process for Board appointments in accordance with the requirements of Companies Act, 20I3, listing agreement and other applicable regulations or guidelines. All the Board appointments are based on meritocracy.

The potential candidates for appointment to the Board are inter-alia evaluated on the basis of personal and professional ethics, standing, integrity, values and character; appreciation of the Company''s vision, mission, values; prominence in business, institutions or professions, professional skill, knowledge and expertise, financial literacy and such other competencies and skills as may be considered necessary.

In addition to the above, the candidature of an Independent Director is also evaluated in terms of the criteria for determining independence as stipulated under Companies Act, 20I3, Listing Regulation, guidelines issued by RBI and other applicable regulations or guidelines. In case of re-appointment of Directors, the Board shall take into consideration the results of the performance evaluation of the Directors and their engagement level.

The Company has Remuneration Policy for Directors, KMPs and other employees, which is reviewed by the Board of Directors of the Company, from time to time. The policy represents the overarching approach of the Company for the remuneration of Directors, KMPs and other employees.

Board’s Responsibility Statement

Pursuant to the requirement under Section I34(3)(c), read with Section I34(5) of the Companies Act, 20I3 with respect to Board''s Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March, 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 20I3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

Auditors & Audit Reports Statutory Auditor & Audit Report

M/s Mukesh Kumar & Co, Chartered Accountants, have been appointed as Statutory Auditor of the Company in its 25^th Annual General Meeting held on September 26, 2017 for 3 years, subject to annual ratification. Accordingly Board of Directors recommends the ratification of appointment of Statutory Auditor 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. The Auditors of the Company have not given any adverse remarks or disclaimers in the report.

Secretarial Auditor and Secretarial Audit Report

In accordance with the provisions of Section 204 of the Companies Act, 20I3 and as a measure of good Corporate Governance practice, the Company in its Board Meeting held on January 30, 20I8 has appointed CS Satish Kumar Jadon, Practicing Company Secretary, as its Secretarial Auditor to conduct secretarial audit of the Company for financial year ended March 31, 2018. The Report of Secretarial Auditor for financial year ended March 31, 2018, being a part of this Board''s Report is enclosed herewith as Annexure A. The Report of Secretarial Auditor is self-explanatory and no explanation is required thereon from the Board of Directors of the Company.

Fraud reported by auditors under Section 143(12) other than those which are reported to the Central Government

Pursuant to provisions of Section I43(I2) of the Companies Act, 20I3, the Auditors of the Company have not reported about any fraud, which is being or has been committed in the Company by its officers or employees.

Particulars of Loans, Guarantees or Investments Under Section 186 of Companies Act, 2013

Being RBI registered Non-Banking Finance Company, in terms of Section 186(I I) of the Companies Act, 2013 the provisions of Section I86, except Sub-Section I of the said Section, shall not apply on the Company, hence disclosure under Section I34 (3) (g) of the Companies Act, 20I3, of particulars of the loans given, investments made or guarantees given or securities provided under Section I86 of the Companies Act, 20I3 is not applicable to the Company.

Related Party Transactions

During the year under review, transactions entered into with Related Parties, as defined under Companies Act, 2013 and SEBI (LODR) Regulations, 20I5, were in the ordinary course of business and at an arm''s length pricing basis, and do not attract the provisions of Sections I88 of the Companies Act, 20I3. Related party transactions under the ordinary courcse of business are disclosed in the Note no. 30 of the financial statement.

The details of the transactions with Related Parties were placed before the Audit Committee for its prior approval, from time to time.

Policy on materiality of related party transactions and on dealing with related party transactions is displayed on the website of the Company at www.paisalo.in.

Material Changes and Commitments, if any, Affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year of the Company and date of this Board''s Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of business undertaken by the Company during the year under review, the particulars pursuant to Section I34 (3) (m) of the Companies Act, 20I3 read with Rule 8 of the Companies (Accounts) Rules, 20I4, to the extent applicable, are as follows:

- Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption have not been furnished.

- Foreign Exchange earnings for the Company during the financial year under review was nil and Company''s Foreign Exchange outgo during the financial year under review was ''0.20 million.

Corporate Social Responsibility

In accordance with the provisions of Section I35 of the Companies Act, 20I3 read with rules made thereunder, Company has constituted a Corporate Social Responsibility Committee, which framed a Board approved CSR Policy for the Company, and the same is available on the website of the Company. CSR Policy of the Company has vision to make concrete efforts towards providing preventive health care, sustainable development of green environment and welfare of animal.

For the financial year 2017-18 the Company has decided to undertake its CSR activities through a registered trust a Company not for profit, which is engaged to develop start-ups in the space of Agribusiness and Technology domains and rural health care initiatives. Composition of CSR Committee as disclosed in Corporate Governance Section of this Annual Report as part of Board''s Report and other details as required under Companies Act, 20I3 is as annexed with this Report as Annexure B.

Details of Significant and Material Orders Passed by the Regulator or Courts or Tribunal Impacting the Going Concern Status and Company’s Operation in Future

There is no order passed by the Regulators, Courts or Tribunals which would impact the going concern status of the Company and its future operations.

Risk Management Policy

Non-Banking Finance Companies (NBFCs) form an integral part of Indian financial system. NBFCs are required to ensure that a proper framework on Risk Management System is formulated and put in place. For this purpose Company, in addition to Audit Committee, has constituted Assets Liability Management Committee and Risk Management Committee to facilitate the Board to address the risk associated with the business of the Company and developed and implemented a risk management policy to ensure sustainable business growth with stability and promote a proactive approach in reporting, evaluating and resolving risks associated with the Company''s business. The Policy also highlights the functions, responsibilities and role of the Committees and Board to address the risks associated with the Company and to mitigate/ reduce the impact of the risk on the Company.

The Company follows a disciplined risk management process and takes business decisions with balanced risk-reward paradigm. Internal Financial Control

Your Company remains committed to improve the effectiveness of internal financial controls and processes which would help in efficient conduct of its business operations, ensure security to its assets and timely preparation of reliable financial information.

The internal financial controls with reference to the Financial Statements are adequate, in the opinion of the Board of Directors.

The Company has a proper system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly.

The internal control is supplemented by an extensive programme of internal, external audits and periodic review by the Management. This system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. A firm of Chartered Accountants has been engaged by the Company for conducting internal audit, to examine and evaluate the adequacy and effectiveness of internal financial control system of the Company.

Internal Financial Control System of the Company is modified continuously in accordance with the dynamic changes in the business conditions and to comply with the applicable laws, regulations, statutory and accounting requirements.

Human Resources

Company''s industrial relations continued to be harmonious during the period under review.

Your Company strives to provide the best work environment with ample opportunities to grow and explore. Healthy, cordial and harmonious industrial relations have been maintained by the Company at all levels.

Information required under Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013

The Company has a policy against sexual harassment and process for dealing with complaints of harassment or discrimination in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Directors further state that during the year under review there was no case filed pursuant to the sexual harassment of women at workplace (Prevention Prohibition and Redressal) Act, 20I3.

Disclosures as per the Provision of Section 197 (12) of Companies Act, 2013

Information in accordance with provisions of Section, I97(I2) of the Companies Act, 20I3 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4 are forming part of this report as Annexure C. The statement containing particulars of employees as required u

under Section I97 (I2) of the Companies Act, 20I3 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnal) rule 20I4 may be obtained by the members by the writing to the Company Secratary of the Company.

Credit Rating

Infomerics Valuation and Rating Pvt. Limited vide its letter dated March 26, 20I8, has assigned IVR A/Stable outlook rating to company''s fund based Bank facilities for an amount of ''9,900.00 Million

Further, M/s India Ratings & Research Private Limited (A Fitch Group Company) through its letter dated July 25, 20I7 has assigned following rating to Company''s instruments:

i) Long Term Banks Loans Limit of ''8,000.00 million (increased from ''6,500.00 million): Rating IND A-, Outlook-Positive; i) Long Term Debenture aggregating to ''1,000 million: Rating-IND A-, Outlook -Positive.

Compliance of Reserve Bank of India Guidelines

The Company always adheres to comply with applicable provisions of prudential norms, rules, regulations and guidelines issued by Reserve Bank of India for Non Banking Financials Companies.

Timely Repayment of Loan Liabilities

During the year under review, the Company has duly serviced all its debts obligations in time.

Extracts of Annual Return

Pursuant to section 92(3) of the Companies Act, 20I3 and Rule I2(I) of the Companies (Management and Administration) Rules, 20I4, Extracts of Annual Return in the form MGT-9 is annexed herewith as integral part of this Report as Annexure D.

Management Discussion and Analysis of Financial Conditions

An analysis of the financial conditions and results of operations of the Company for the year under review, has been represented in the Annual Report as a separate section on Management Discussion and Analysis as an integral part of this Annual Report.

Corporate Governance

Your Company strives to ensure that the best corporate governance practices are identified, adopted and consistently followed. It is ensured, that the practices being followed by the Company are in alignment with its philosophy towards Corporate Governance. Your Company believes that good corporate governance is the basis for sustainable growth of the business and effective management of relationship among constituents of the system and always works towards strengthening this relationship through corporate fairness, transparency and accountability. Your Company gives prime importance to reliable financial information, integrity, transparency, fairness, empowerment and compliance with law in letter and spirit.

The report on corporate governance forms an integral part of this report and is set out as separate section to this Annual Report.

Detailed compliance with the provisions of Listing Regulation for the Finance Year 2017-18 along with Certificate of Compliance from the Statutory Auditor, has been mentioned in the Corporate Governance Report Section of this Report which is annexed herewith as Annexure E.

Performance of the Board of Directors, Its Committees and Individual Directors

Mounting stakeholders'' expectations, challenges faced by the Companies to operate under fluctuating economic conditions and increased regulatory requirements have brought the quality of performance of the Board of Directors under greater scrutiny. The Board of Directors have recognised that it would be important for them to continually assess how effectively they are performing their roles against the objectives and the goals they have set for themselves. This growing recognition has resulted in Board''s evolutions as a critical structural tool for assessing Board''s effectiveness and efficiency.

Considering the above facts and in light of the Company''s performance, the performance of the Board of Directors and their committees, along with performance of individual Directors is reviewed and evaluated from time to time by Nomination and Remuneration Committee and the Board of Directors through various manner like discussion with Directors, seeking views of one Director from other Directors, inputs from the Directors through structured questionnaires covering the various aspects of the Board functioning such as adequacy of composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, participation of Directors in the various matters, skill and knowledge of individual Director and independence of judgement, contribution towards development of the strategy, risk management. The Directors expressed satisfaction with the evaluation process. The performance of the Directors individually and collectively and performance of the committees are found satisfactory.

With the spirit of wealth creation for the stakeholders of the Company, your Directors are committed to give their efforts towards the development of the Company.

Independent Directors also reviewed the performance of the Board as a whole and assessed the quality and timeliness of the flow of the information between the Company Management and Board.

Acknowledgments

We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. Your Directors wish to place on record their gratitude for the valuable assistance and co-operation extended to the Company by Banks, Government Authorities, Customers, Shareholders of the Company and we are looking forward to their continued support and co-operation in future.

Date : May 2, 2018 For & on behalf of the Board of Directors

Place : New Delhi of Paisalo Digital Limited

Sd/- Sd/-

(Sunil Agarwal) (Harish Singh)

Managing Director Executive Director

DIN : 00006991 DIN : 00039501

---

Mar 31, 2017

Dear Members

The Board of Directors have pleasure in presenting the 25th Directors'' Report of the S. E. Investments Limited (The "Company") together with the Audited Financial Statements for the year ended March 31, 2017.

Financial Highlights

The standalone financial performance of the Company for the year ended 2016-17 is summarized below:

(Rs, in Lakhs)

Particulars	2016-17	2015-16
Total Income	24,951.77	19,336.69
Less: Expenditure	8,356.05	5,945.89
Profit before Depreciation, Financial Cost & Tax (PBDIT)	16,595.72	13,390.80
Less: Financial Cost	8,837.49	6,487.43
Profit before Depreciation & Tax (PBDT)	7,758.23	6,903.37
Less: Depreciation	39.62	43.51
Profit Before Tax (PBT)	7,718.61	6,859.86
Less: Tax Expenses	2,589.46	2,346.72
Net Profit After Tax (PAT)	5,129.15	4,513.14
Add: Profit b/f from the previous year	307.30	350.23
Profit Available for Appropriation	5,436.45	4,863.37
Dividend Including Tax	455.38	455.38
Provision for Standard Assets	145.18	68.06
Expenditure on CSR Activities	150.35	180.00
Transfer to General Reserve	3,500.00	2,700.00
Transfer to Reserve Fund (RBI Act)	1,025.83	902.63
Transfer to Capital Redemption Reserve	-	250.00
Balance Carried to Balance Sheet	159.71	307.30

The Company has posted a profit after tax (PAT) of Rs. 5,129.15 Lakhs for FY 2016-17 as compared to a PAT of Rs. 4,513.14 Lakhs for FY 2015-16.

Financial Cost for the year increased by 36.22 % to Rs. 8,837.49 Lakhs from Rs. 6,487.43 Lakhs in the last year. Review of Operations

The Company is providing a number of financial products like Business Loans, SME & MSME Loans, Income Generation Loans and easy EMI finance scheme which are expected to take the growth of the Company to a higher level.

Disbursements

During the financial year 2016-17, total disbursements (including figures of Subsidiary) reached to Rs. 1,48,201.34 Lakhs. The Company is focusing to maintain the asset quality of its loan portfolio without compromising the risk profile.

Number of Customers

Total Customers outreach stood at 7,74,190 being increased by 9.16 % as compared to previous year.

Net Worth and Capital to Risk Adjusted Ratio (CRAR)

The Net Worth of the Company increased to Rs.55,241 Lakhs as on March 31, 2017 from Rs.50514 Lakhs as on March 31, 2016. The Capital to Risk Adjusted Ratio (CRAR) stood at 38.08% as on March 31, 2017 as against 41.69 % as on March 31, 2016 which is much above the requirement as stipulated by Reserve Bank of India and is one of the best in the industry.

Dividend

Keeping in mind the overall performance and the outlook of your Company, for the financial year 2016-17, your Board is pleased to recommend a dividend of Re. 1/- (Rupee One only) per equity share i.e. 10% on each Equity Share of Rs. 10/- (Rupees Ten only). The dividend would be paid to all the shareholders, whose names appear in the Register of Members/ Beneficial Holders list on the Book Closure/Record date as decided by the Board.

Fixed Deposits

Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits was outstanding as on the date of balance sheet.

Directors and Key Managerial Personnel

Change in Directors or KMP

The Board of Directors of the Company is duly constituted. During the year under review, Mr. Sachin Agarwal has resigned from the Directorship of the Company w.e.f. May 6, 2016 other than that no other change took place in the composition of Board of Directors of the Company.

During the financial year 2016-17, w.e.f. January 24, 2017 Mr. Vishal Sharma has ceased to be Company Secretary of the Company due to his resignation and w.e.f. January 25, 2017 Mr. Manendra Singh has been appointed as Company Secretary of the Company by the Board of Directors.

Appointment/ Reappointment of Directors

In terms of Section 152 of Companies Act, 2013, Dr. Arun Gopal Agarwal (DIN: 00374421), Non-Executive Non Independent Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment.

Mr. Gauri Shankar having a rich experience of banking industry, has been appointed as an Additional Independent Director on the Board w.e.f. July 22, 2017 to hold office till the date of forthcoming Annual General Meeting of the Company. Now the Board believes that the knowledge and expertise of Mr. Gauri Shankar will benefit the Company in its endeavors and in the opinion of the Board his continuous association will be in the interest of the Company. Accordingly, Board recommends his appointment as an Independent Director for five consecutive years in the forthcoming Annual General Meeting of the Company.

Number of Board Meeting

During the financial year 2016-17, Board of Directors met 7 times on May 7, 2016, August 13, 2016, September 8, 2016, September 17, 2016, October 22, 2016, January 25, 2017 and February 4, 2017.

Declaration of Independence by Independent Directors

Declaration have been given by all the Independent Directors of the Company confirming that they meet the criteria of independence as envisaged in Section 149(6) the Companies Act, 2013 and Listing Regulations.

Policy on Directors Appointment and Remuneration

In accordance with Section 178 of the Companies Act, 2013 the Board has, on the recommendation of Nomination and Remuneration Committee, approved the Policy for Appointment and Remuneration of Directors.

The objective of aforesaid Policy is to provide criteria for appointment of Directors, viz. experience, qualification, positive attributes, understanding of Company''s business, and social perspective, personal achievements and Board diversity. The policy also contains the provisions to ensure that Executive Directors, KMP and other employees are sufficiently compensated for their performance. Under the policy, Nomination and Remuneration Committee is entrusted with the responsibility to evaluate the various aspects relating to the appointment and remuneration of the Directors to the Board.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134(3)(c), read with Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March, 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

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

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

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

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

Subsidiary

Nupur Finvest Private Limited, a registered non deposit taking non-banking finance company, is the only subsidiary company, of which the Company owned hundred percent shares.

Nupur Finvest Private Limited is engaged in business to provide business and income generation loans to entrepreneurs. At the year ended March 31, 2017, the net worth of the Company stood at Rs. 5,164.74 Lakhs. During the reporting period the subsidiary reported a gross income of Rs.2102.55 Lakhs and Profit Before Tax (PBT) and Profit After Tax (PAT) at Rs. 328.52 Lakhs and Rs. 219.75 Lakhs respectively.

Auditors & Audit Reports

Statutory Auditors

M/s R. Lal & Company, Chartered Accountants, has been appointed as Statutory Auditors of the Company in 22nd Annual General Meeting of the Company held on September 30, 2014, for 3 years subject to annual ratification.

Pursuant to the provisions of Section 139 (2) the term of M/s R. Lal & Company, Chartered Accountants, is being completed on the conclusion of ensuing Annual General Meeting and could not be re-appointment as auditor of the Company at least for five years from the completion of their term.

Accordingly, as recommended by the Audit Committee, recommendation for appointment of M/s Mukesh Kumar & Co. Chartered Accountants (Firm Reg. no. 002040C), as Statutory Auditors of the Company, for a period of three years commencing from the conclusion of 25th Annual General Meeting until the conclusion of 28th Annual General Meeting (subject to annual ratification) will be placed before the Members, at the ensuing Annual General Meeting, for their approval.

The observations of Auditors in their report read with notes to the accounts are self-explanatory and do not call for any further explanation. The Auditors of the Company have not given any adverse remarks or disclaimers in the report.

Secretarial Auditor and Secretarial Audit Report

In accordance with the provisions of Section 204 of the Companies Act, 2013 and as a measure of good Corporate Governance practice, the Company had appointed CS Dimple Sachdeva, Practicing Company Secretary, as its secretarial auditor to conduct secretarial audit of the Company for financial year ended March 31, 2017. The Report of secretarial auditor for financial year ended March 31, 2017, being a part of this Directors'' Report is enclosed herewith as Annexure A. There are no qualifications, reservations or adverse remarks made by the secretarial auditor of the Company.

Fraud reported by auditors under Section 143(12) other than those which are reported to the Central Government

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Auditors of the Company have not reported about any fraud, which is being or has been committed in the Company by its officers or employees.

Particulars of Loans, Guarantees or Investments Under Section 186 of Companies Act, 2013

Being RBI registered Non Banking Finance Company, in terms of Section 186(11) of the Companies Act, 2013 the provisions of Section 186, except Sub-Section 1 of the said Section, shall not apply on the Company, hence disclosure under Section 134 (3) (g) of the Companies Act, 2013, of particulars of the loans given, investments made or guarantees given or securities provided under Section 186 of the Companies Act, 2013 is not applicable to the Company.

Related Party Transactions

During the year under review, transactions entered into with Related Parties, as defined under Companies Act, 2013 and SEBI (LODR) Regulations, 2015, were in the ordinary course of business and at an arm''s length pricing basis, and do not attract the provisions of Sections 188 of the Companies Act, 2013. Such related party transactions are disclosed in the Note no. 29 of the financial statement.

The details of the transactions with Related Parties were placed before the Audit Committee for its prior approval, from time to time.

Policy on materiality of related party transactions and on dealing with related party transactions is displayed on the website of the Company at www.seil.in.

Material Changes and Commitments, if any, Affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year of the Company and date of this Directors'' Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of business undertaken by the Company during the year under review, the particulars pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, to the extent applicable, are as follows:

- Since the Company does not own any manufacturing facility, the particulars relating to conservation of energy and technology absorption have not been furnished.

- Foreign Exchange earnings for the Company during the financial year under review was nil and Company''s Foreign Exchange outgo during the financial year under review was Rs. 1.80 Lakhs.

Corporate Social Responsibility

In accordance with the provisions of Section 135 of Companies Act, 2013 read with rules made there under, Company has constituted a Corporate Social Responsibility Committee, which framed a Board approved CSR Policy for the Company, same is available on Company''s website www.seil.in. CSR Policy of the Company has vision to make concrete efforts towards the animal welfare and also supported the cause of rural development, promoting education, providing preventive healthcare and sustainable development of green environment, provided they are covered as per the statutory requirements of social responsibility.

The Board of the Company has decided to undertake its CSR activities through a registered charitable trust and Company not for profit, which is engaged in the welfare of Mother Cow and rural health care initiatives. In the financial Year 2016-17, Company has made contribution of Rs.150.35 Lakhs in the corpus fund of the Trust and Company, which is more than 2% of Company''s average net profit of last three years of Rs.7,314.61Lakhs. Composition of CSR Committee as disclosed in Corporate Governance Section of this Annual Report as part of Directors'' Report and other details as required under Companies Act, 2013 is annexed with this Report as Annexure B.

Details of Significant and Material Orders Passed by the Regulator or Courts or Tribunal Impacting the Going Concern Status and Company’s Operation in Future

There is no order passed by the Regulators, Courts or Tribunals which would impact the going concern status of the Company and its future operations.

Risk Management Policy

Non-Banking Finance Companies (NBFCs) form an integral part of Indian financial system. NBFCs are required to ensure that a proper framework on Risk Management System is formulated and put in place. For this purpose Company has constituted Assets Liability Management Committee and Risk Management Committee to facilitate the Board to address the risk associated with the business of the Company and developed and implemented a risk management policy to ensure sustainable business growth with stability and promote a proactive approach in reporting, evaluating and resolving risks associated with the Company''s business. The Policy also highlights the functions, responsibilities and role of the Committees and Board to address the risks associated with the Company and mitigate/reduce the impact of the risk on the Company.

The Company follows a disciplined risk management process and takes business decisions with balanced risk-reward paradigm. Detailed statement on risk management policy of the Company is discussed in separate section on Management Discussion and Analysis and it forms part of the Directors'' Report.

Internal Financial Control

Internal Financial Control System is an integral component of the Risk Management System of the Company. The internal financial control policies and internal audit program adopted by the Company play an important role to ensure the orderly and efficiently conduct of the Company''s business, including adherence to the Companies policies, safeguard of Company''s assets, proper utilization of available resources, the prevention and detection of frauds, reliability and accuracy of financial reporting.

A firm of Competent Chartered Accountants has been engaged by the Company for conducting internal audit, to examine and evaluate the adequacy and effectiveness of internal financial control system of the Company.

The Audit Committee of Board of Directors, Statutory Auditors and the Business Heads are periodically apprised the internal audit findings and corrective actions taken.

The Audit Committee of Board of Directors actively reviews the adequacy and effectiveness of internal financial control system and suggests improvements for strengthening them.

Internal Financial Control System of the Company is modified continuously in accordance with the dynamic changes in the business conditions and to comply with the applicable laws, regulations, statutory and accounting requirements.

Human Resources

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. Healthy, cordial and harmonious industrial relations have been maintained by the Company at all levels.

Information required under Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013

The Company has a policy against sexual harassment and process for dealing with complaints of harassment or discrimination in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Directors further state that during the year under review there was no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act, 2013.

Disclosures as per the Provision of Section 197 (12) of Companies Act, 2013

Information in accordance with provisions of Section, 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been annexed herewith as Annexure C to the Directors'' Report.

Credit Rating

As on the date of this Report, analysis is under process for Bank Loan Rating. Previously, it was "IND A-" as assigned by M/s India Ratings & Research Private Limited (A Fitch Group Company).

As per www.indiaratings.co.in rating symbols & definitions "IND A" is defined as "Instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk".

Compliance of Reserve Bank of India Guidelines

The Company always adheres to comply with applicable provisions of rules, regulations and guidelines issued by Reserve Bank of India.

Timely Repayment of Loan Liabilities

During the year under review, the Company has duly serviced all its debts obligations in time.

Extracts of Annual Return

Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Extracts of Annual Return in the form MGT-9 is annexed here with as an integral part of this Report as Annexure D.

Management Discussion and Analysis of Financial Conditions

An analysis of the financial conditions and results of operations of the Company for the year under review, has been represented in the Annual Report Under the head Management Discussion and Analysis as an integral part of this Report

Corporate Governance

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

Detailed compliances with the provisions of Listing Regulation for the year ended 2016-17 along with the Certificate of Compliance from the Auditor, has been mentioned in Corporate Governance Report, which is annexed herewith as Annexure E.

Performance of the Board of Directors, Its Committees and Individual Directors

Mounting stakeholders'' expectations, challenges faced by the Companies to operate under fluctuating economic conditions and increased regulatory requirements have brought the quality of performance of the Board of Directors under greater scrutiny. The Boards have recognized that it would be important for them to continually assess how effectively they are performing their roles against the objectives and the goals they have set for themselves. This growing recognition has resulted in Board evolutions as a critical structural tool for assessing Board effectiveness and efficiency.

Considering the above fact and in the light of Company''s performance, the performance of the Board of Directors and their committees, along with performance of individual Director is reviewed and evaluated from time to time by Nomination and Remuneration Committee and the Board of Directors through various manner like discussion with individual director, by seeking views of one Director about the performance of other Directors, inputs from the Directors through structured questionnaires covering the various aspects of the Board functioning such as adequacy of composition of the Board and its Committee, Board culture, execution and performance of specific duties, obligations, participation of Directors in the various matters, skill and knowledge of individual Director and independence of judgment. The performance of the Directors individually and collectively and performance of committees are found satisfactory.

With the spirit of wealth creation for the shareholders of the Company, your Directors are committed to give their best efforts towards the development of the Company.

The Independent Directors at their separate meeting held on March 15, 2017, in full attendance, made an assessment and evaluation of the performance of Non Independent Directors, Managing Director and Chairman of the Company.

Independent Directors also reviewed the performance of the Board as a whole and assessed the quality and timeliness of the flow of the information between the Company management and Board.

Acknowledgments

The Board of Directors would like to place on record their gratitude 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 we look forward for their mutual support and cooperation.

Date : 22^nd July 2017 For & on behalf of the Board of Directors of

Place : New Delhi S. E. Investments Ltd.

Sd/- Sd/-

(Sunil Agarwal) (Harish Singh)

Managing Director Executive Director

DIN :00006991 D I N :00039501

---

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

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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

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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