5.9 Contingent Liabilities and Contingent Assets

Contingent liabilities are disclosed for:

a. possible obligations which will be confirmed only by future events not wholly within the control of the
Company, or

b. present obligations arising from past events where it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

c. Contingent assets are disclosed wherein an inflow of economic benefits is probable.

d. The Company has not recognized the Assets & Liability in respect of Arbitration Decree.

5.10 Share Capital

a. Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from proceeds.

b. The Company may capitalize permitted Reserves and Security Premium for Bonus Shares.

c. The Company has issued equity shares under Paisalo ESPS scheme at discounted price which has been
recognized in the Profit & Loss Statements and Reserve & Surplus.

5.11 Segment Reporting Policy

The Chief Executive Officer reviews the operation at the Company level. Therefore, the operations of the
Company fall under "Financing activities" business only, which is considered to be the only segment in
accordance with the provisions of Ind AS 108- Operating segment.

5.12 Business Model

During the previous year, the company entered into bilateral assignment transactions against outstanding
loans. But the value of these loans are trivial in light of the Company's AUM, thus Company's business model
continue to be 'Hold to collect' as per Ind AS 109- Financial Instruments.

5.13 Employee Retirement Benefits

Contributions to Provident Fund and Super Annuation Fund made during the year, are charged to Statement
of Profit and Loss.

Employees Gratuity liabilities has been calculated on the basis of Projected Unit Credit method adopted by
LIC of India at the time of renewal of gratuity policy. Accordingly, Company has made contribution in line of
that which is charged to Statement of Profit & Loss Account in the year of contribution.

5.14 Borrowing Cost

Borrowing costs, which are directly attributable to the acquisition /construction of fixed assets, till the time
such assets are ready for intended use, are capitalized as a part of the cost of assets.

All borrowing costs other than mentioned above are expensed in the period they are incurred. In case of
unamortized identified borrowing cost is outstanding at the year end, it is classified under loans and advances
as unamortized cost of borrowings.

In case any loan is prepaid/ cancelled then the unamortized borrowing cost, if any, is fully expensed off on the
date of prepayment/cancellation.

5.15 Related Party

A related party is a person or an entity that is related to the reporting entity. A related party transaction is a
transfer of resources, services or obligations between a reporting entity and a related party, regardless of
whether a price is charged.

A person or a close family member is related if he:

• Has control/joint control;

• Has significant influence;

• Is a member of the Key Managerial Personnel (KMP);

of the reporting entity or its parent.

Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity including:

• that person's children, spouse or domestic partner, brother, sister, father and mother;

• children of that person's spouse or domestic partner; and

• dependants of that person or that person's spouse or domestic partner.

Key Management Personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity.

Company has duly complied with all the disclosure requirements of Ind AS 24 "Related Party Disclosures"

5.16 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. Company follows accrual basis for all revenue recognition.
Interest income is recognized on due basis and penal income is recognized on receipt basis. For recognition
of revenue, the valuation of listed shares is considered at market price and that of security receipts as per the
valuation report as at Balance Sheet date.

Processing fees received from customer was recognized as income in the year of receipt under India GAAP.
But, as per Ind AS, the same is now amortized over the period of relevant loan.

5.17 Earnings Per Share

The Earning per Share (Basic as well as Diluted) is calculated based on the net profit or loss for the period
attributable to equity shareholders i.e. the net profit or loss for the period.

For the purpose of calculating (Basic and Diluted EPS), the number of equity shares taken are the weighted
average number of equity shares outstanding during the period.

b) Contingent Assets:

In March 2020, Paisalo Digital Limited engaged in a significant transaction involving the transfer of book-
debts amounting to Rs. 23.29 Crores. These debts primarily consisted of loans extended to 'Bottom of Pyramid'
customers, in accordance with a 10:90 risk and rewards sharing arrangement with Central Bank of India. This
strategic move adhered to the regulatory guidelines set forth by the Reserve Bank of India (RBI), reflecting the
company's commitment to prudent financial practices.

However, the unforeseen emergence of the Covid-19 Pandemic shortly thereafter precipitated unforeseen
challenges within this demographic segment, resulting in a notable increase in loan defaults. Despite the
company's proactive measures to mitigate these challenges, a portion of the loans turned non-performing,
impacting both Paisalo Digital Limited and Central Bank of India.

Of particular concern was Central Bank of India's unilateral action on March 31, 2023, whereby they debited
Paisalo Digital Limited's Cash Credit account by Rs. 5.38 Crores. This action, which deviated from the agreed
terms of the transaction, has raised legal and operational concerns. Since the requests for resolution of
dispute through negotiation have not been considered by the Bank hence the Company is in the process of
filing pre-litigation mediation petition before the Hon'ble Court.

As a prudent accounting measure, the company has already charged this disputed amount to the profit
and loss statement in the previous year as an exceptional item. However, given the merits of the company's
position in contesting this debit, the amount continuous to be classified as a contingent asset pending
resolution.

Notes:

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

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

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

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

(5) Company has extended its guarantee to Banks/ Financial Institutions for credit facilities availed by the wholly
owned subsidiary Nupur Finvest Pvt. Ltd.

38. Working Capital, Working Capital Demand Loan and Term Loan Borrowings:

The Company has an arrangement with a consortium of Eight banks under the leadership of Bank of Baroda for
its working capital requirements. The facility is primarily secured by the hypothecation of book-debts / receivables
of the Company and collaterally by mortgage of immovable properties including office premises, a flat owned by
the Company and four commercial properties by third parties as well as personal and corporate guarantees. The
outstanding details of the member banks in the consortium is as under:

45. The Company had not taken any exposure in Derivatives during the financial year 2024-25.

46. Disclosure relating to Securitization:

i) The Company has not done securitization of any of its loans & advances to any organization during the
financial year 2024-25 and there is no outstanding amount as on Balance Sheet date. Also, the Company has
not sold its financial assets to any Securitization/Reconstruction Company for Asset Reconstruction. Further
the Company has not undertaken new assignment transactions during the Financial Year 2024-25.

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

a) Disclosures pursuant to RBI Notification- RBI/2020-21/16 DOR.No.BP.BC/3/21.04.048/2020-21 dated 6^th
August 2020 and RBI/2021-22/31/DOR.STR.REC.11 /21.04.048/2021-22 dated 5^th May 2021.

There were no borrower accounts where resolution plans had been implemented under RBI 's Resolution
Framework 2.0 dated 5^th May 2021 during the year.

b) Disclosures pursuant to RBI Notification- RBI /DOR/2021-22/86 DOR.STR.REC.51 /21.04.048/2021-22 dated
24^th September 2021.

(i) Details of transfer through assignment in respect of loans not in default during the financial year
ended 31^st March, 2025.

In addition to above the Company has transferred written off loans amounting to Rs. Nil for a
consideration of Rs. Nil.

(iv) The Company has not acquired any stressed loan during the financial year ended 31^st March, 2025.

c) Pursuant to the RBI circular dated 12^th November 2021 - "Prudential norms on Income Recognition, Asset
Classification and Provisioning pertaining to Advances - Clarifications', the Company has aligned its
definition of default from number of instalments outstanding approach to Days Past Due approach. On
15^th February 2022, RBI allowed deferment till 30^th September 2022 of Para 1 of this circular pertaining to
upgrade of Non-performing accounts. However, the Company has not opted for this deferment and
such alignment does not have any significant impact on the financial results for the quarter and year
ended 31^st March 2025.

iii) Co-Lending Operations with Banks

Paisalo Digital Ltd. has forged strategic Co-Lending partnerships with five prominent banking institutions-State
Bank of India, Bank of Baroda, UCO Bank, Punjab National Bank, and Karnataka Bank. These collaborations are
anchored in the shared objective of advancing financial inclusion by extending timely and accessible credit
to underserved segments, notably in the agriculture (AGRI) sector, micro, small, and medium enterprises
(MSMEs), and other small business ecosystems.

Under the Reserve Bank of India's regulated Co-Lending Model (CLM), Paisalo Digital Ltd. contributes 20% of the
loan amount while the partner banks provide the remaining 80%. This model enables an equitable sharing of
risk and return, and allows both parties to leverage their respective strengths-Paisalo's deep penetration into
rural and semi-urban markets, and the banks' robust funding capabilities and regulatory frameworks.

The Co-Lending arrangement is designed to streamline credit delivery through end-to-end digital processes,
ensuring faster loan disbursal and minimal friction for the borrower. By integrating operational workflows and
aligning underwriting criteria, Paisalo and its banking partners are able to optimize risk assessment, improve
cost efficiency, and provide competitive interest rates. While the banks' rates remain aligned with prevailing

benchmarks, Paisalo retains flexibility within regulatory limits to determine its own rates, thereby maintaining
a fair and transparent pricing mechanism for borrowers.

Recent regulatory developments and clarifications from the Reserve Bank of India have further bolstered
the Co-Lending framework, providing increased clarity and operational confidence to participating entities.
Paisalo continues to invest in digital infrastructure to support seamless onboarding, documentation, and
disbursement processes-positioning itself as a key enabler of last-mile credit delivery.

In essence, Co-Lending reflects a transformative shift in credit distribution strategy, one that synergizes
institutional capital with grassroots reach. For Paisalo Digital Ltd., it is not merely a business model but a core
pillar of its mission to democratize credit and foster inclusive economic development. The company's forward¬
looking alliances in this space are expected to remain a significant growth driver, contributing meaningfully to
both financial performance and social impact.

50. Bank borrowings and Long Term Debt Securites of the Company have been assigned rating of "IVR AA/STABLE
OUTLOOK” by Infomerics Valuation and Rating Pvt. Ltd. which denotes "Instruments with this rating are considered
to have adequate degree of safety regarding timely servicing of financial obligations. Such instruments carry low
credit risk". Similarly, the Company has been assigned rating of "IVR A1 (IVR A One Plus)" for Commercial Paper
by Infomerics Valuation and Rating Pvt Ltd which denotes "Securities with this rating are considered to have very
strong degree of safety regarding timely payment of financial obligation. Such instruments carry lowest credit risk."

d) The Company has issued Foreign currency convertible bonds of USD 50 millions, which are duly hedged
against repayment of interest and maturity value, out of these FCCBs of USD 2 million has been converted into
equity share during the year. The profit/(loss) on exchange rate fluctuation have been duly recongnised in
Profit & Loss Statements.

e) Concentration of NPAs

Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the
directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments
are overdue for more than 90 days past due and management is of the opinion that its recovery chances are
very remote or negligible, the Company writes off these accounts (Net of Future Interest Charges) as bad debts.
In all other cases where loan installments are overdue for more than 90 days past due the provisioning for
non-performing assets is made in compliance with Non-Banking Financial Company Systemically Important
Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions 2016, as applicable to
the company. As per the RBI Directions dated 1st September 2016 updated as on 23rd February 2018 Company
has made general provision of 0.40% of Standard assets. Other directives of Reserve Bank of India have been
duly complied with. The details of top 4 NPA's written off during the year are given below:

59. Uncertainty relating to the global health pandemic from COVID-19 ("Covid-19"):

a) The global landscape remains fraught with challenges, chiefly stemming from the widespread COVID-19
pandemic. This unprecedented crisis has precipitated multifaceted repercussions, including sweeping
governmental interventions, a resilient economic rebound post a severe global recession, surging inflation
rates, geopolitical tensions such as the conflict in Ukraine, and substantial economic sanctions imposed on
Russia.

b) In light of the enduring ramifications of the global pandemic, Paisalo Digital Ltd. has proactively instituted
alternative work modalities to safeguard the health and well-being of its workforce and business associates.
These measures encompass the facilitation of remote work arrangements, particularly for operations and call
centers during periods of enforced lockdowns. Equipping employees with requisite technological infrastructure
has ensured the secure and efficient delivery of services to borrowers.

Throughout the fiscal year, the company has fostered robust communication channels via virtual sessions
with branches, employees, and business associates, thereby sustaining proactive engagement with
customers. Services such as Door Step Sourcing and Servicing have been meticulously executed, adhering to
stringent safety protocols and implementing essential non-pharmaceutical interventions. Despite prevailing
challenges, the majority of branches, employees, and business associates have remained operational,
playing a pivotal role in extending essential credit to borrowers.

Furthermore, Paisalo Digital Ltd. has swiftly adapted to evolving circumstances, innovating digital and analog
tools to facilitate credit requests and optimize loan recovery mechanisms.

c) During the financial year 2024-25, no significant governmental, regulatory, or banking frameworks were
introduced explicitly targeting COVID-19 relief or aid for Non-Banking Financial Companies (NBFCs) like
Paisalo Digital Ltd. However, NBFCs have increasingly served as conduits for governmental and major banking
institutions, leveraging their local presence to directly support households in need.

The stability in funding and liquidity afforded to Paisalo Digital Ltd. is fortified by its entrenched local footprint,
robust credit and risk assessment methodologies, and enduring partnerships with esteemed banking entities.

60. In the financial year 2024-25, Paisalo Digital Ltd. delivered a robust non-fund based income of ^701.23 lakhs. This
income segment, comprising fees, commissions, and revenue from ancillary services, illustrates the company's
focus on building a diversified and resilient revenue base beyond traditional interest income.

Paisalo implemented several targeted initiatives to strengthen its non-fund based income portfolio:

a) Business Correspondent (BC) Services: Acting as a Business Correspondent for leading banks such as State
Bank of India and Bank of India, Paisalo extended formal banking and financial services to unbanked and
underbanked geographies. As a BC, the company facilitated a range of banking transactions-including
account openings, deposits, withdrawals, and loan processing-on behalf of its partner banks. In return,
Paisalo earned transaction-based fees and service commissions, establishing a recurring revenue stream
with minimal credit risk exposure.

b) Ancillary Financial Services: In addition to its core lending operations, Paisalo expanded into ancillary
services designed to complement and enhance its financial offerings. These include transaction facilitation,
documentation support, and financial advisory services. Revenues in this segment are typically fee-based
and linked to transaction volumes, allowing the company to scale non-fund income in tandem with customer
activity and asset volumes.

c) Cross-Selling of Financial Products: Capitalizing on its extensive customer base and high engagement
levels, Paisalo adopted a cross-selling strategy to offer supplementary financial products such as insurance,
investment-linked services, and savings instruments. These initiatives aim to deepen customer relationships,
increase lifetime value, and unlock incremental income streams. This strategy also aligns with the company's
long-term vision of becoming a holistic financial services provider in rural and semi-urban India.

These strategic efforts have contributed significantly to enhancing the company's non-fund based income,
while also reinforcing its value proposition to customers and partners alike. As part of its ongoing evolution,
Paisalo continues to identify and implement innovative methods to expand its fee-based income, improve
profitability, and create long-term value for shareholders.

environment by minimizing the impact of interest rate fluctuations on the company's business plan. This
involves assessing the potential effects of interest rate changes on the company's financial position and
operations, enabling more accurate forecasting and strategic decision-making.

ii) Achieving Greater Predictability to Earnings

Another key goal is to achieve greater predictability in earnings by determining the financial value of
expected earnings in advance. This entails forecasting future earnings based on various factors such as
market conditions, customer behavior, and economic trends. By accurately predicting earnings, the company
can better allocate resources, plan investments, and manage its financial performance effectively.

A) Credit Risk

Credit risk represents the potential financial loss to the company if a customer or counterparty fails to
fulfill its contractual obligations. This risk primarily emanates from trade and other receivables, cash
equivalents, and bank balances. To assess credit risk, the company utilizes various metrics such as
installment default rate, overdue position, and debt management efficiency.

Credit risk is closely monitored through the analysis of credit exposures, portfolio monitoring, and
evaluation of customer and portfolio concentration risk. Moreover, the risk management unit employs
a robust control framework to manage credit risk effectively. This framework involves aligning credit
and debt management policies, leveraging external data from credit bureaus, and conducting regular
reviews of portfolios and delinquencies by senior and middle management teams.

By implementing these strategies, Paisalo Digital Ltd aims to proactively identify and mitigate credit risks,
thereby safeguarding its financial stability and ensuring the continuity of its operations.

(a) Loans, Trade & Other Receivables

Managing credit risk from loans, trade, and other receivables is a multifaceted process that involves

a comprehensive approach to mitigate potential financial losses and uphold the company's

financial stability. Here's a detailed overview of how the company manages credit risk:

1. Establishing Credit Limits: The company meticulously sets credit limits for each customer,
taking into account various factors such as creditworthiness, financial history, and repayment
capacity. These credit limits serve as a safeguard against excessive borrowing and minimize
the risk of default.

2. Credit Approvals Process: Every credit request undergoes a stringent approval process that
evaluates the creditworthiness of the customers and assesses associated risks. This process
involves analyzing financial statements, credit reports, and other relevant information to
determine the likelihood of repayment. Only credit requests meeting predefined risk criteria
are approved.

3. Continuous Creditworthiness Monitoring: The company continuously monitors the
creditworthiness of its customers to identify any changes in their financial circumstances that
may impact their ability to repay loans or fulfill obligations. This ongoing monitoring involves
regular reviews of credit reports, financial statements, and market trends to assess credit risk
profiles accurately.

4. Regular Monitoring of Receivables: The company maintains a vigilant stance by regularly
monitoring outstanding receivables to ensure timely repayment by customers. This includes
tracking payment schedules, identifying overdue accounts, and implementing effective
collection strategies for delinquent accounts. By closely monitoring receivables, the company
can promptly identify potential credit risks and take appropriate actions to mitigate them.

5. Ageing Analysis: The company conducts thorough ageing analysis of loans and trade
receivables to categorize outstanding receivables based on their ageing profile. This analysis
helps identify accounts that are overdue or at risk of default, enabling the company to
prioritize collection efforts and allocate resources efficiently. By understanding the ageing
profile of receivables, the company can implement targeted credit management strategies
to minimize credit risk exposure.

(b) Cash & Cash Equivalents & Other Bank Balances

Regarding the management of cash and cash equivalents, the company maintains a robust
evaluation process for assessing the creditworthiness of banks and financial institutions where funds
are held. This evaluation occurs regularly and involves comprehensive assessments of financial
stability, regulatory compliance, and risk management practices. By ensuring the creditworthiness
of banking partners, the company mitigates the risk associated with cash holdings and safeguards
its liquidity position. The company holds cash and cash equivalents and other bank balances of Rs.
10,366.77 Lakh at 31^st March 2025.

B) Liquidity & Funding Risk

Liquidity risk poses a substantial threat to the Company's ability to fulfill its financial obligations, particularly

those settled through cash or other financial assets. This risk encompasses several dimensions, including

funding risk, which manifests in various scenarios:

1. Inability to Raise Incremental Funds: The company faces the risk of being unable to secure additional
borrowings or deposits to meet its operational needs or fulfill repayment obligations. This could
arise due to limitations in accessing capital markets or reluctance from lenders amidst uncertain
economic conditions.

2. Cash Flow Mismatches: Funding risk also emerges when long-term assets cannot be financed
over their expected term, leading to discrepancies in cash flows. Such mismatches may arise from
unexpected changes in market conditions or disruptions in the funding environment.

3. Market Volatility Impacting Funding: Volatility in financial markets can further exacerbate funding
risk by hindering the company's ability to source funds from banks and money markets. Fluctuations
in interest rates, credit spreads, or investor sentiment may impede access to funding avenues,
heightening liquidity concerns.

Measuring liquidity risk involves several key metrics and assessments:

1. Identification of Structural and Dynamic Liquidity Gaps: The company analyzes structural and
dynamic liquidity statements to identify gaps between available funds and near-term liabilities.
This entails assessing the maturity profile of assets and liabilities to gauge liquidity adequacy.

2. Assessment of Incremental Borrowing Needs: Evaluating the incremental borrowings required to
fulfill repayment obligations and support the company's business plan amidst prevailing market
conditions is crucial. This assessment considers factors such as interest rate environment, credit
availability, and funding costs.

3. Monitoring Liquidity Coverage Ratio (LCR): The company tracks its liquidity coverage ratio in
adherence to regulatory guidelines, ensuring sufficient high-quality liquid assets are held to cover
short-term liquidity needs under stress scenarios.

Managing liquidity risk involves proactive measures implemented by the treasury team:

1. Gap Analysis and Scenario Testing: The company continuously assesses the gap between
fund visibility and near-term liabilities, considering evolving liquidity conditions and regulatory
requirements for non-banking financial companies (NBFCs). Stress tests and scenario analyses are
conducted to evaluate potential liquidity shortfalls and compare them against available buffers.

2. Adaptive Funding Strategies: A dynamic approach to funding involves aligning funding sources
with emerging market conditions in banking and money markets. The company adjusts its funding
mix and borrowing strategies to optimize liquidity and mitigate funding risks.

3. Maintaining Liquidity Buffers: Building and maintaining liquidity buffers is essential to mitigate
liquidity risk. These buffers serve as a cushion during periods of funding stress and provide resilience
against unexpected liquidity shocks.

4. Strategic Asset-Liability Management: The company employs positive asset-liability management
practices to match asset and liability durations, reducing the risk of cash flow mismatches. This
entails aligning asset maturities with liability obligations to minimize funding gaps.

5. Diversification and Relationship Management: Diversifying funding sources and cultivating strong
relationships with banks and financial institutions enhance the company's ability to access funding
under diverse market conditions. Maintaining a robust pipeline of sanctions and approvals ensures
access to funding avenues when needed.

In essence, the management of liquidity risk is a dynamic and multifaceted endeavor, requiring
a proactive and strategic approach from the treasury team. Through the judicious application of
liquidity buffers, long-term funding strategies, asset-liability management, pipeline management,
and prudent loan assignments, the treasury team fortifies the Company's liquidity position,
safeguards against funding uncertainties, and fosters financial resilience in an ever-evolving
financial landscape.

C) Market Risk

Market risk, a critical facet of financial risk management, underscores the potential for future earnings,

fair values, or cash flows to incur losses due to adverse fluctuations in market rates and prices, or the

values of market risk-sensitive instruments. This encompasses Currency Risk, Interest Rate Risk, and Price

Risk, each demanding meticulous assessment and proactive management strategies.

1. Measurement Techniques: Market risk is quantified through a suite of sophisticated metrics and
methodologies, including Value at Risk (VaR), basis point value (PV01), and modified duration
analysis. These tools facilitate a comprehensive evaluation of portfolio dynamics and the potential
impact on income streams, particularly in terms of net interest income. The Company's exposure to
market risk is analyzed across various dimensions, encompassing equity investments, interest rate
fluctuations within investment portfolios, and the implications of floating rate assets and liabilities
with varying maturity profiles.

2. Monitoring Protocols: Rigorous monitoring protocols are employed to track fluctuations in equity
prices and interest rate sensitivities under diverse stress test scenarios. Through simulated
simulations of probable interest rate movements, both fixed and floating assets and liabilities
are scrutinized to gauge resilience under adverse market conditions. This proactive monitoring
framework enables the identification of vulnerabilities and informs timely risk mitigation strategies.

3. Management Strategies: The management of market risk is entrusted to the Company's treasury
team, operating under the guidance of the Board. This dedicated team implements a multi-faceted
approach tailored to address specific risk exposures:

- Currency Risk: Given the Company's exclusive operations within India, exposure to foreign
currency risk is mitigated. The Company has issued Foreign currency convertible bonds of
USD 50 millions, which are duly hedged against repayment of interest and maturity value, out
of these FCCBs of USD 2 million has been converted into equity share during the year.

- Interest Rate Risk: The Company actively manages interest rate risk by closely monitoring
market interest rate movements and their potential impact on interest-bearing liabilities and
assets. This proactive stance enables the Company to adapt swiftly to changing interest rate
environments and optimize its interest rate exposure.

- Price Risk: Equity price risk arising from investments is managed through prudent portfolio
diversification strategies. The Company strategically diversifies its investment portfolio within
predefined limits to mitigate concentration risk and optimize risk-adjusted returns.

4. Governance Framework: The management of market risk is conducted under the oversight of
the Board of Directors. The treasury team, comprising seasoned professionals with expertise in
financial risk management, implements risk mitigation strategies in alignment with the Board's
directives and risk appetite. This ensures that market risk management practices are consistent
with the Company's strategic objectives and regulatory compliance obligations.

In essence, the management of market risk requires a judicious blend of quantitative analysis,
robust monitoring mechanisms, and proactive risk mitigation strategies. By leveraging sophisticated
measurement techniques, rigorous monitoring protocols, and strategic management frameworks,
the Company navigates the complexities of market risk dynamics while safeguarding its financial
stability and optimizing long-term performance.

D) Operational Risk

Operational risk, a multifaceted challenge inherent in the company's operational landscape, arises from
a spectrum of sources, encompassing internal processes, human resources, technological systems, and
external factors. To effectively manage operational risks, the Company has instituted a comprehensive
framework of internal controls and procedures, meticulously designed to govern critical activities across
various functional domains, including loan acquisition, customer service, IT operations, and finance
functions.

1. Internal Control Systems: At the heart of operational risk management lies a robust system of
internal controls, meticulously crafted to mitigate the risk of inadequate or failed internal processes,
people, or systems. These controls span a myriad of functions, facilitating proactive identification
and remediation of potential vulnerabilities. Through continuous monitoring and assessment, the
Company endeavors to strengthen its internal control environment, ensuring operational resilience
and efficiency.

2. Internal Audit Oversight: Internal Audit plays a pivotal role in operational risk management,
conducting comprehensive reviews of all operational functions at least annually. This diligent
scrutiny serves to unearth process gaps and deficiencies in a timely manner, enabling corrective
actions to be implemented promptly. By providing independent assurance and insights, Internal
Audit reinforces the Company's commitment to sound governance practices and operational
excellence.

3. Compliance and Control Units: Within the IT and Operations functions, dedicated compliance and
control units operate in tandem to uphold the integrity and security of internal processes. Through
continuous monitoring and evaluation, these units assess adherence to regulatory requirements
and internal policies, proactively identifying and addressing operational risks. By fostering a culture
of compliance and risk awareness, these units contribute to the Company's resilience in the face of
evolving operational challenges.

4. Disaster Recovery and Business Continuity Planning: Recognizing the imperative of business
continuity in the face of unforeseen events, the Company has established robust Disaster Recovery
(DR) and Business Continuity Plans (BCP). These plans are meticulously crafted to ensure the
seamless continuation of operations and services to customers in the event of natural disasters,
technological outages, or other disruptive incidents. Regular testing and analysis of these plans
enable the Company to identify and rectify any gaps in the framework, bolstering its readiness to
navigate unforeseen disruptions effectively.

In essence, operational risk management is woven into the fabric of the Company's governance

framework, underpinned by a relentless commitment to process excellence, regulatory compliance,
and business continuity. Through the concerted efforts of internal control systems, audit oversight,
compliance units, and robust disaster recovery planning, the Company strives to fortify its
operational resilience and safeguard its business operations against a spectrum of potential risks
and contingencies.

63. Additional information pursuant to Ministry of Corporate Affairs notification dated March 24, 2021 with respect

to amendments in Schedule iii of Companies Act, 2013:

i) The Company has made provision for dividend @ Rs. 0.10 each per share and the same will be declared & paid
after the approval of the shareholders in their Annual General Meeting.

ii) All the borrowings of the Company are used for the specific purpose for which it was taken.

iii) There are no proceedings which have been initiated or pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

iv) The Company is not a willful defaulter as declared by any bank or financial Institution or any other lender.

v) The Company does not have any transactions with the companies struck off under section 248 of Companies
Act, 2013 or Section 560 of Companies Act, 1956.

vi) There are no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the
statutory period.

vii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act
read with Companies (Restriction on number of Layers) Rules, 2017.

viii) There are no transactions which are not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the income Tax Act, 1961 (such as, search
or survey or any other relevant provisions of the Income Tax Act, 1961).

xi) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

Notes:

1. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Company-Systemically
Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Direction, 2016.

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

Signed in terms of our Report of even date For and on behalf of the Board

Sd/-

For Saket Jain & Co. (SUNIL AGARWAL)

Chartered Accountants Managing Director

Firm Reg. No. 014685N DIN : 00006991

Sd/-

(CA. ASHISH JAIN) Sd/-

Partner (HARISH SINGH)

Membership No. 400599 Executive Director & CFO

UDIN : 25400599BMIGVH1618 DIN : 00039501

Sd/-

(MANENDRA SINGH)

Place : New Delhi Company Secretary

Date : 9^th May 2025 Membership No. : F7868