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Paisalo Digital Ltd.

BSE: 532900 Sector: Financials
BSE 00:00 | 24 May 298.00 -2.10






NSE 00:00 | 24 May 298.00 -4.00






OPEN 302.00
52-Week high 401.55
52-Week low 140.70
P/E 21.26
Mkt Cap.(Rs cr) 1,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 302.00
CLOSE 300.10
52-Week high 401.55
52-Week low 140.70
P/E 21.26
Mkt Cap.(Rs cr) 1,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Paisalo Digital Ltd. (PAISALO) - Director Report

Company director report

Dear Members

Your Board of Directors have pleasure in presenting the 25th Directors' Report of theS. E. Investments Limited (The “Company”) together with the Audited FinancialStatements for the year ended March 31 2017.

Financial Highlights

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

(Rs. in Lakhs)

Particulars 2016-17 2015-16
Total Income 24951.77 19336.69
Less: Expenditure 8356.05 5945.89
Profit before Depreciation Financial Cost & Tax (PBDIT) 16595.72 13390.80
Less: Financial Cost 8837.49 6487.43
Profit before Depreciation & Tax (PBDT) 7758.23 6903.37
Less: Depreciation 39.62 43.51
Profit Before Tax (PBT) 7718.61 6859.86
Less: Tax Expenses 2589.46 2346.72
Net Profit After Tax (PAT) 5129.15 4513.14
Add: Profit b/f from the previous year 307.30 350.23
Profit Available for Appropriation 5436.45 4863.37
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 3500.00 2700.00
Transfer to Reserve Fund (RBI Act) 1025.83 902.63
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. 5129.15 Lakhs for FY 2016-17 ascompared to a PAT of Rs. 4513.14 Lakhs for FY 2015-16.

Financial Cost for the year increased by 36.22 % to Rs. 8837.49 Lakhs from Rs.6487.43 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 takethe growth of the Company to a higher level.


During the financial year 2016-17 total disbursements (including gures of Subsidiary)reached to Rs. 148201.34 Lakhs. The Company is focusing to maintain the asset quality ofits loan portfolio without compromising the risk profile.

Number of Customers

Total Customers outreach stood at 774190 being increased by 9.16 % as compared toprevious year.

Net Worth and Capital to Risk Adjusted Ratio (CRAR)

The Net Worth of the Company increased to Rs.55241 Lakhs as on March 31 2017 fromRs.50514 Lakhs as on March 31 2016. The Capital to Risk Adjusted Ratio (CRAR) stood at38.08% as on March 31 2017 as against 41.69 % as on March 31 2016 which is much abovethe requirement as stipulated by Reserve Bank of India and is one of the best in theindustry.


Keeping in mind the overall performance and the outlook of your Company for thefinancial year 2016-17 your Board is pleased to recommend a dividend of Re. 1/- (RupeeOne 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 ofMembers/ 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 ofprincipal 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 underreview Mr. Sachin Agarwal has resigned from the Directorship of the Company w.e.f. May 62016 other than that no other change took place in the composition of Board of Directorsof the Company.

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

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 atthe ensuing Annual General Meeting and being eligible for re-appointment offers himselffor re-appointment.

Mr. Gauri Shankar having a rich experience of banking industry has been appointed asan Additional Independent Director on the Board w.e.f. July 22 2017 to hold office tillthe date of forthcoming Annual General Meeting of the Company. Now the Board believes thatthe knowledge and expertise of Mr. Gauri Shankar will benefit the Company in itsendeavours and in the opinion of the Board his continous association will be in theinterest of the Company. Accordingly Board recommends his appointment as an IndependentDirector for five consecutive years in the forthcoming Annual General Meeting of theCompany.

Number of Board Meeting

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

Declaration of Independence by Independent Directors

Declaration have been given by all the Independent Directors of the Company con firmingthat they meet the criteria of independence as envisaged in Section 149(6) the CompaniesAct 2013 and Listing Regulations.

Policy on Directors Appointment and Remuneration

In accordance with Section 178 of the Companies Act 2013 the Board has on therecommendation of Nomination and Remuneration Committee approved the Policy forAppointment and Remuneration of Directors.

The objective of aforesaid Policy is to provide criteria for appointment of Directorsviz. experience qualification positive attributes understanding of Company's businessand social perspective personal achievements and Board diversity. The policy alsocontains the provisions to ensure that Executive Directors KMP and other employees aresufficiently compensated for their performance. Under the policy Nomination andRemuneration Committee is entrusted with the responsibility to evaluate the variousaspects 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 theCompanies 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 312017 the applicable accounting standards have been followed and there are no materialdepartures from the same;

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

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and

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


Nupur Finvest Private Limited a registered non deposit taking non-banking financecompany is the only subsidiary company of which the Company owned hundred percentshares.

Nupur Finvest Private Limited is engaged in business to provide business and incomegeneration loans to entrepreneurs. At the year ended March 31 2017 the net worth of theCompany stood at Rs. 5164.74 Lakhs. During the reporting period the subsidiary reported agross income of Rs.2102.55 Lakhs and Profit Before Tax (PBT) and Profit After Tax (PAT) atRs. 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 StatutoryAuditors of the Company in 22nd Annual General Meeting of the Company held on September30 2014 for 3 years subject to annual ratification. Pursuant to the provisions ofSection 139 (2) the term of M/s R. Lal & Company Chartered Accountants is beingcompleted on the conclusion of ensuing Annual General Meeting and could not bere-appointment as auditor of the Company at least for five years from the completion oftheir term.

Accordingly as recommended by the Audit Committee recommendation for appointment ofM/s Mukesh Kumar & Co. Chartered Accountants (Firm Reg. no. 002040C) as StatutoryAuditors of the Company for a period of three years commencing from the conclusion of25th Annual General Meeting until the conclusion of 28th Annual General Meeting (subjectto annual ratification) will be placed before the Members at the ensuing Annual GeneralMeeting for their approval.

The observations of Auditors in their report read with notes to the accounts areself-explanatory and do not call for any further explanation. The Auditors of the Companyhave 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 ameasure of good Corporate Governance practice the Company had appointed CS DimpleSachdeva Practicing Company Secretary as its secretarial auditor to conduct secretarialaudit of the Company for financial year ended March 31 2017. The Report of secretarialauditor for financial year ended March 31 2017 being a part of this Directors' Report isenclosed herewith as Annexure A. There are no qualifications reservations or adverseremarks made by the secretarial auditor of the Company.

Fraud reported by auditors under Section 143(12) other than those which are reported tothe Central Government Pursuant to provisions of Section 143(12) of the Companies Act2013 the Auditors of the Company have not reported about any fraud which is being or hasbeen committed in the Company by its officers or employees.

Particulars of Loans Guarantees or Investments Under Section 186 of Companies Act2013

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

Related Party Transactions

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

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

Policy on materiality of related party transactions and on dealing with related partytransactions is displayed on the website of the Company at

Material Changes and Commitments if any Affecting the Financial Position of theCompany

There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year of the Company and date ofthis 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 underreview the particulars pursuant to Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 to the extent applicable are asfollows:

• Since the Company does not flown any manufacturing facility the particularsrelating to conservation of energy and technology absorption have not been furnished.

• Foreign Exchange earnings for the Company during the financial year under reviewwas nil and Company's Foreign Exchange outgo during the financial year under review wasRs. 1.80 Lakhs.

Corporate Social Responsibility

In accordance with the provisions of Section 135 of Companies Act 2013 read with rulesmade thereunder Company has constituted a Corporate Social Responsibility Committeewhich framed a Board approved CSR Policy for the Company same is available on Company'swebsite CSR Policy of the Company has vision to make concrete efforts towardsthe animal welfare and also supported the cause of rural development promoting educationproviding preventive healthcare and sustainable development of green environment providedthey are covered as per the statutory requirements of social responsibility.

The Board of the Company has decided to undertake its CSR activities through aregistered charitable trust and Company not for profit which is engaged in the welfare ofMother Cow and rural health care initiatives. In the financial Year 2016-17 Company hasmade contribution of Rs.150.35 Lakhs in the corpus fund of the Trust and Company which ismore than 2% of Company's average net profit of last three years of Rs.7314.61Lakhs.Composition of CSR Committee as disclosed in Corporate Governance Section of this AnnualReport as part of Directors' Report and other details as required under Companies Act2013 is annexed with this Report as Annexure B.

Details of Significant and Material Orders Passed by the Regulator or Courts orTribunal 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 thegoing 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 isformulated and put in place. For this purpose Company has constituted Assets LiabilityManagement Committee and Risk Management Committee to facilitate the Board to address therisk associated with the business of the Company and developed and implemented a riskmanagement policy to ensure sustainable business growth with stability and promote aproactive approach in reporting evaluating and resolving risks associated with theCompany's business. The Policy also highlights the functions responsibilities and role ofthe Committees and Board to address the risks associated with the Company andmitigate/reduce the impact of the risk on the Company.

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

Internal Financial Control

Internal Financial Control System is an integral component of the Risk ManagementSystem of the Company. The internal financial control policies and internal audit programadopted by the Company play an important role to ensure the orderly and efficientlyconduct of the Company's business including adherence to the Companies policiessafeguard of Company's assets proper utilisation of available resources the preventionand detection of frauds reliability and accuracy of financial reporting.

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

The Audit Committee of Board of Directors Statutory Auditors and the Business Headsare periodically apprised the internal audit ndings and corrective actions taken.

The Audit Committee of Board of Directors actively reviews the adequacy andeffectiveness of internal financial control system and suggests improvements forstrengthening them.

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

Human Resources

Your Company strives to provide the best work environment with ample opportunities togrow and explore. The human resources development function of the Company is guided by astrong set of values and policies. Healthy cordial and harmonious industrial relationshave been maintained by the Company at all levels.

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

The Company has a policy against sexual harassment and process for dealing withcomplaints of harassment or discrimination in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013. TheDirectors further state that during the year under review there was no case led pursuantto the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.

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 Act2013 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 & ResearchPrivate Limited (A Fitch Group Company).

As per rating symbols & de nitions “IND A” isdefined as “Instruments with this rating are considered to have adequate degree ofsafety regarding timely servicing of financial obligations. Such instruments carry lowcredit risk”.

Compliance of Reserve Bank of India Guidelines

The Company always adheres to comply with applicable provisions of rules regulationsand 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 obligationsin 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-9is 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 forthe year under review has been represented in the Annual Report Under the head ManagementDiscussion 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 ensuredthat the practices being followed by the Company are in alignment with its philosophytowards Corporate Governance. The Company believes that the Corporate Governance is allabout effective management of relationship among constituents of the system of the systemand always works towards strengthening this relationship through corporate fairnesstransparency and accountability. In the Company prime importance is given to reliablefinancial information integrity transparency fairness empowerment and compliance withlaw in letter and spirit.

Detailed compliances with the provisions of Listing Regulation for the year ended2016-17 along with the Certificate of Compliance from the Auditor has been mentioned inCorporate 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 underfluctuating economic conditions and increased regulatory requirements have brought thequality of performance of the Board of Directors under greater scrutiny. The Boards haverecognised that it would be important for them to continually assess how effectively theyare performing their roles against the objectives and the goals they have set forthemselves. This growing recognition has resulted in Board evolutions as a criticalstructural tool for assessing Board effectiveness and efficiency.

Considering the above fact and in the light of Company's performance the performanceof the Board of Directors and their committees along with performance of individualDirector is reviewed and evaluated from time to time by Nomination and RemunerationCommittee and the Board of Directors through various manner like discussion withindividual director by seeking views of one Director about the performance of otherDirectors inputs from the Directors through structured questionnaires covering thevarious aspects of the Board functioning such as adequacy of composition of the Board andits Committee Board culture execution and performance of specific duties obligationsparticipation of Directors in the various matters skill and knowledge of individualDirector and independence of judgement. The performance of the Directors individually andcollectively and performance of committees are found satisfactory.

With the spirit of wealth creation for the shareholders of the Company your Directorsare 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 fullattendance made an assessment and evaluation of the performance of Non IndependentDirectors Managing Director and Chairman of the Company.

Independent Directors also reviewed the performance of the Board as a whole andassessed the quality and timeliness of the flow of the information between the Companymanagement and Board.


The Board of Directors would like to place on record their gratitude for thecommitment dedication and hard work done by the employees of the Company and theco-operation extended by Banks Government Authorities Customers Shareholders andEmployees of the Company and we look forward for their mutual support and cooperation.

Date : 22nd 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 DIN : 00039501