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Paisalo Digital Ltd.

BSE: 532900 Sector: Financials
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OPEN 817.00
52-Week high 877.00
52-Week low 348.00
P/E 57.05
Mkt Cap.(Rs cr) 3,542
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 817.00
CLOSE 802.35
52-Week high 877.00
52-Week low 348.00
P/E 57.05
Mkt Cap.(Rs cr) 3,542
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



Your Board of Directors have pleasure in presenting the 28th Annual Report togetherwith the Audited Financial Statements for the Financial Year ended March 312020.

Financial Highlights

The standalone financial performance of the Company for the Financial Year 2019-20 issummarized below:

(INR in million)

Particulars FY 2019-20 FY 2018-19
Revenue from Operations 3374.51 3177.39
Less: Expenditure 2635.29 2330.39
Profit Before Tax (PBT) 739.22 847.00
Tax Expenses 198.84 279.29
Net Profit After Tax (PAT) 540.38 567.71
Total Comprehensive Income for the Period 540.38 567.71
Transfer to Statutory Reserves (RBI Reserve Fund) 108.65 112.97
Transfer to General Reserve 390.00 390.00
Provisions of Standard Assets 1.22 2.92
Earnings per Share (EPS) (INR) 12.78 14.00
Net Worth 7603.20 6558.74
Assets Under Management (AUM) 19195.70 19253.04

Results of Operations and State of Company's Affairs

Revenue from operations for the year ended March 312020 has marginally increased by6.20 % at INR 3374.51 million over the corresponding previous year. The Net Profit ofyour Company for the financial year ended March 31 2020 stood at INR 540.38 million asagainst the Net Profit of INR 567.71 million for the financial year ended March 312019.Accordingly the Net Profit for the financial year ended March 312020 reflects a marginaldownfall of 4.81 % over the corresponding Profit for the financial year ended March312019.

Transfer to Reserves

As required under Section 45IC of the Reserve Bank of India Act 1934 20% of theprofits are required to be transferred to a Special Reserve Account. The Company hastransferred INR 108.65 millions (previous year INR 112.97 million) to Statutory Reserveand INR 390.00 million has been transferred to General Reserve for financial year 2019-20.


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 finance activities. At the year endedMarch 31 2020 the net worth of the Company stood at INR 532.12 million. During thereporting period the subsidiary reported income of INR 373.18 million and PBT and PAT atINR 2.42 million and INR 0.93 million respectively.

Consolidated Financial Statements

In compliance with the applicable provisions of Companies Act 2013 includingapplicable Accounting Standard on Consolidated Company's Financial Statements stood atthis Annual Report also includes Consolidated Financial Statements for the Financial Year2019-20 consolidated Income INR 3747.69 million as against INR 3605.99 million in theprevious 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 yearunder review Company has posted 6.20 % increase in its total finance business.


During the Financial Year 2019-20 total disbursements reached to INR 14975 million.

Number of Customers

During the year under review the customer outreach increased by 12.59 % and totalcustomers outreach stood at 1176162.

Net Worth and Capital to Risk Adjusted Ratio (CRAR)

The net worth of the Company increased to INR 7603.20 million as on March 312020 fromINR 6558.74 million as on March 31 2019. The Capital to Risk Adjusted Ratio (CRAR) stoodat 43 % as on March 31 2020 as against 34% as on March 312019 which is much above therequirement as stipulated by RBI.

Share Capital

During the year under review the Authorized Share Capital of the Company stood at INR1250.00 million. The Issued Subscribed Share Capital of the Company as on March 312020was INR 423.05 million consisting of 42304699 equity shares of INR 10 each. The FullyPaid-up Share Capital of the Company as on March 31 2020 was INR 422.92 millionconsisting of 42292199 equity shares of INR 10 each fully paid-up and 12500 forfeitedequity shares of INR 10 each (amount originally paid-up @ INR 5 each). During the yearunder review on June 27 2019 the Company has issued 1732199 equity shares of INR 10each pursuant to Scheme of Merger between Agarwal Meadows Private Limited (TransferorCompany) and Paisalo Digital Limited (Transferee Company) as approved by Hon'ble NationalCompany Law Tribunal Principal Bench at New Delhi vide its Order dated May 17 2019.


Your Board is pleased to recommend a final dividend of INR 1/- (Rupee One only) pershare i.e. 10% on each fully paid equity share of INR 10/- (Rupees Ten only) for FinancialYear 2019-20. The dividend if declared by the Members at the forthcoming Annual GeneralMeeting (AGM) shall be paid to the eligible Members of the Company.

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 unclaimeddividends amounting to INR 259429.00 as on the date of financial year ended on March 312019. During the year under review there was an amount of INR 57622.00 of unpaid andunclaimed dividend for a period of 7 years from the date it was lying in the unpaiddividend Accordingly pursuant to the provisions of Section 124(5) of the Companies Act2013 INR 57622.00 had been transferred in the Investor Education and Protection Fund(IEPF) of the Central Government during financial year 2019-20.

Fixed Deposit

During the year under review the Company has not accepted any public deposits and noamount on account of principal or interest on public deposits was outstanding as on thedate of balance sheet.

Bank finance

Your Company raised funds for its working capital and business requirements fromvarious Banks and the total amount of Bank loan outstanding as on March 31 2020 was INR7983.01 million as against INR 7418.57 million on March 31 2019. During the year underreview your Company maintained banking relationships with 13 Banks.

Fund Raising through Issue of Debentures

During the year under review the Company has raised INR 160.00 million by issuingUnlisted Unsecured Unrated NonConvertible Debentures of INR 10.00 million each on privateplacement basis.

Credit Rating

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

Instrument/Facility Amount (INR in million) Rating Assigned
1. Fund Based Facilities (CC) 8225.00 IVRA/Positive Outlook
2. Fund Based (Non Convertible Debentures) 1000.00 (IVR Single A with Positive
3. Proposed Facilities 675.00 Outlook)

Board of Directors Board Meetings and Key Managerial Personnel

The Company's Board is duly constituted and is in compliance with the requirements ofthe Companies Act 2013 the Listing Regulations and provisions of the Articles ofAssociation of the Company. The Company's Board has been constituted with requisitediversity wisdom and experience commensurate to the business of your Company.

Change in Directors or KMP

During the year under review Mr. Anoop Krishna (DIN: 08068261) who retired at the27th Annual General Meeting was re-appointed as an Executive Director of the Company. Inthe 27th Annual General Meeting of the Company through Special Resolution passed by theShareholders of the Company under Section 149(10) of the Companies Act 2013 Mr. NareshKumar Jain has been reappointed as Independent Director for further term of 5 yearscommencing from August 14 2019 and on March 212020 the Shareholders of the Company bypassing Special Resolution under Section 149(10) of the Companies Act 2013 through PostalBallot have reappointed Mr. Pradeep Agarwal as Independent Director for further term of 5years commencing from March 28 2020.

On October 15 2019 the Board has appointed Mr. Raman Aggarwal (DIN: 00116103) as anAdditional Independent Director. During the year under review due to time constraints andpersonal reasons Mrs. Bhama Krishnamurthy (DIN: 02196839) has resigned as IndependentDirector from the Board of the Company effective from March 3 2020. The Board places onrecord its deep sense of appreciation for the guidance and support provided by Mrs. BhamaKrishnamurthy during her tenure as Independent Director of the Company. On May 18 2019CA Atul Kumar Agrawal was appointed as Chief Financial Officer of the company anddesignation of Mr. Harish Singh was changed from Executive Director cum CFO to ExecutiveDirector

Appointment/Reappointment of Directors or KMP

Reappointment of Mr. Harish Singh retire by rotation:

In terms of Section 152 of Companies Act 2013 Mr. Harish Singh (DIN: 00039501) isliable to retire by rotation at the ensuing Annual General Meeting and being eligible forre-appointment offers himself for re-appointment. The Board of the Company recommendsre-appointment of Mr. Harish Singh as a Director of the Company liable to retire byrotation.

Since the date of 27th Annual General Meeting of the Company on the recommendation ofNomination and Remuneration Committee the Board of Directors has appointed Mr. RamanAggarwal (on October 15 2019) and Mrs. Nisha Jolly (on May 30 2020) as AdditionalIndependent Directors of the Company to hold the office till the date of forthcomingAnnual General Meeting. Keeping in the view the good experience knowledge and expertiseof these Additional Directors in finance industry the Board believes that theirassociation with the Company will be in the interest of the Company and will benefit theCompany in its endeavours. Accordingly Board of Directors and Nomination and RemunerationCommittee of the Company recommend the appointment of Mr. Raman Aggarwal and Mrs. NishaJolly as Non-Executive Independent Directors in the forthcoming Annual General Meeting ofthe Company.

Declaration of Independence by Independent Directors:

Mr. Naresh Kumar Jain Mr. Pradeep Agarwal Mr. Gauri Shankar Mr. Sunil Srivastav Mr.Raman Aggarwal and Mrs. Nisha Jolly-Independent Directors of the Company have declared tothe Board of Directors that they meet the criteria of Independence as laid down inSections 149(6) and 149(7) of the Companies Act 2013 and Regulation 16(1) (b) of SEBI(LODR) Regulations 2015. In the opinion of the Board the Independent Directors possessthe requisite expertise and experience and are the person of integrity and repute. Theyfulfil the conditions specified in the Companies Act 2013 and the Rules made thereunderand are independent of the management of the Company. The Board also places on records itsdeep appreciation for their continuous guidance support and contribution to theManagement of the Company.

Board Meetings

During the year under review a total of seven meetings of the Board of Directors ofthe Company were held i.e. on May 17 2019; June 27 2019; August 10 2019; October 152019; January 30 2020 (10:00 AM); January 30 2020 (2:00 PM) and February 9 2020.Details of Board composition and Board Meetings held during the financial year 2019-20have 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. PradeepAgarwal as Chairperson and Mr. Gauri Shankar and Executive Director Mr. Harish Singh asMembers. The composition terms of reference and details of meetings held during the yearare disclosed in the Report on Corporate Governance. All the recommendations made by theAudit Committee were accepted by the Board of Directors.

Stakeholders Relationship Committee

The Stakeholder Relationship Committee of the Board consists of Independent Directorsnamely Mr. Naresh Kumar Jain as Chairperson and Mr. Gauri Shankar and Mr. Sunil Srivatavas Members. The composition terms of reference and details of meetings held during theyear are disclosed in the Report on Corporate Governance.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Board of Director consists of threeIndependent Directors the committee recommends to the Board the suitability of candidatesfor appointment as Director/Managing Director and Key Managerial Personnel as well as theremuneration packages payable to them. The composition terms of reference and details ofmeetings 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-Executiveand 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 Boardappointments in accordance with the requirements of Companies Act 2013 ListingRegulations and other applicable rules or guidelines. All the Board appointments are basedon meritocracy. Generally the Managing Director and Whole-time Directors (ExecutiveDirectors) are appointed for a period of five years. Independent Directors of the Companyare appointed to hold their office for a term of up to five consecutive years on the Boardof your Company. Based on their eligibility for re-appointment the outcome of theirperformance evaluation and the recommendation by the Nomination and RemunerationCommittee the Independent Directors may be re-appointed by the Board for another term offive consecutive years subject to approval of the Shareholders of the Company. TheDirectors Key Managerial Personnel and Senior Management Personnel shall retire as perthe 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 thebasis of personal and professional ethics standing integrity values and character;appreciation of the Company's vision mission and values; prominence in businessinstitutions or professions; professional skill knowledge and expertise; financialliteracy and other such competencies and skills as may be considered necessary.

In addition to the above the candidature of an Independent Director is also evaluatedin terms of the criteria for determining independence as stipulated under Companies Act2013 Listing Regulations guidelines issued by RBI and other applicable regulations orguidelines. In case of re-appointment of Director the Board shall take into considerationthe results of the performance evaluation of the Directors and their engagement level.

The Company has Remuneration Policy for Directors KMPs and other employees which isreviewed by the Board of Directors of the Company from time to time; the Policy representsthe overarching approach of the Company for the remuneration of Director KMPs and otheremployees.

The Company conducts a Board Evaluation process for the Board of Directors as a wholeBoard Committees and also for the Directors individually through self-assessment and peerassessment.

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 Board ofDirectors have recognized that it would be important for them to continually assess howeffectively they are performing their roles against the objectives and the goals they haveset for themselves. This growing recognition has resulted in Board evolutions as acritical structural 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 the performance of individualDirector is reviewed and evaluated by Nomination and Remuneration Committee and the Boardof Directors through various manner like discussion with Directors by seeking views ofone Director from other Directors inputs from the Directors through structuredquestionnaires covering the various aspects of the Board functioning such as adequacy ofcomposition of the Board and its Committee Board culture execution and performance ofspecific duties obligations participation of Directors in the various matters skill andknowledge of individual Director independence of judgment contribution towardsdevelopment of the strategy and risk management. The Directors expressed satisfaction withthe evaluation process. The performance of the Director individually and collectively andperformance of the Committees are found satisfactory.

With the spirit of wealth creation for the Stakeholders of the Company your Directorsare committed to give their efforts towards the development 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. Pursuant to Listing Regulations performance evaluation of theIndependent Directors was done by the entire Board excluding the Independent Directorbeing evaluated. The performance of Non-Independent Directors the Board as a whole andthat of the Chairman of the Board were also evaluated in a separate meeting of theIndependent Directors held during the year.

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 theCompany's Code of Conduct applicable to Board of Directors and Senior Management. In thisregard Declaration signed by the Managing Director is annexed and forms part of thisReport.

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 the Directors tothe best of their knowledge and belief hereby confirm that:

a in the preparation of the annual accounts for the Financial Year ended March312020 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 consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Financial Year and of theprofit 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 the Companyand 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 ofall applicable laws and that such systems were adequate and operating effectively.

Auditors & Audit Reports

Statutory Auditor and Statutory Audit Report

In terms of Section 139 of the Companies Act 2013 M/s Mukesh Kumar & CoChartered Accountants (Firm Reg. no. 002040C) had been appointed as Statutory Auditor ofthe Company in the 25th Annual General Meeting held on September 26 2017 for threeconsecutive years. Pursuant to the provisions of Section 139 (2) of the Companies Act2013 and RBI Directions the term of M/s Mukesh Kumar & Co Chartered Accountants isbeing completed on the conclusion of ensuing Annual General Meeting. Accordingly asrecommended by the Audit Committee recommendation of Board for appointment of M/s D Tayal& Jain Chartered Accountants (Firm Registration No. 011181C) as Statutory Auditorsof the Company for a period of three years commencing from the conclusion of 28th AnnualGeneral Meeting until the conclusion of 31st

Annual General Meeting will be placed before the Members at the ensuing Annual GeneralMeeting for their approval.

The Report given by the Statutory Auditor on the financial statement of the Company forthe Financial Year 2019-20 is part of the Annual Report. The Notes on financial statementsreferred to in the Auditors Report are self explanatory and do not call for any furthercomments under Section 134 of the Companies Act 2013. The Auditors' Report does notcontain any qualification reservation or adverse remark.

Secretarial Auditor and Secretarial Audit Report

In accordance with the provisions of Section 204 of the Companies Act 2013 read withRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and as a measure of good Corporate Governance practice Board of Directors in theirMeeting held on February 9 2020 has appointed M/s. Satish Jadon & AssociatesPracticing Company Secretaries as Secretarial Auditor of the Company to conductSecretarial Audit of the Company for financial year ended March 31 2020 and to submitSecretarial Audit Report in Form No. MR-3.

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

Pursuant to circular No. CIR/CFD/CMD1/27/2019 dated February 8 2019 issued by theSEBI the Company has obtained Secretarial Compliance Report for financial year endedMarch 312020 from Practicing Company Secretary on compliance of all applicable SEBIRegulations and circular/ guidelines issued thereunder and the copy of the same has beensubmitted with the Stock Exchanges within the prescribed due date.

The Report of Secretarial Auditor is self-explanatory and no explanation is requiredthereon from the Board of Directors of the Company.

Secretarial Standards

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

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

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

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

Being an RBI registered Non-Banking Financial Company pursuant to Section 186(11) ofthe Companies 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 the 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. However the details of Investment made by the Company havebeen disclosed in the Note: 6 of the Financial Statement for the year ended March 312020.The Company has given its guarantee only for the credit facilities availed by its WhollyOwned Subsidiary M/s. Nupur Finvest Private Limited.

Particulars of Contracts or Arrangements with Related Parties

During the financial year ended March 312020 transactions with the Related Parties asdefined under the Companies Act 2013 read with Rules framed thereunder and SEBI (LODR)Regulations 2015 (Listing Regulations) were in the 'ordinary course of business' and 'atarm's length' basis. During the year under review your Company did not enter into anyRelated Party Transactions which require prior approval of the Members. All Related PartyTransactions of the Company had approval of the Audit Committee and / or the Board ofDirectors as required under Companies Act 2013 and Listing Regulations. The AuditCommittee and the Board have also reviewed the Related Party Transactions on a quarterlybasis. The Company has an internal mechanism for the purpose of identification andmonitoring of Related Party Transactions. During the year under review there has been nomaterially significant Related Party Transactions having potential conflict with theinterest of the Company. Since all Related Party Transactions entered into by your Companywere in the ordinary course of business and also on an arm's length basis the detailsrequired to be provided under the provisions of Section 134(3)(h) of the Companies Act2013 in the prescribed Form AOC - 2 is not applicable to the Company. The Directors drawattention of the Members to Note No. 36 to the Financial Statements for the year endedMarch 312020 which sets out details of related party transactions.

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

Significant and Material Litigations / Orders

During the year under review there were no significant and material orders passed bythe Regulators / Courts which would impact the going concern status of the Company and itsfuture operations. Further no penalties have been levied by the RBI or any otherregulator during the year under review.

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:

• Being a Non-banking Finance Company the particulars regarding the conservationof 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 reviewwas nil and Company's Foreign Exchange outgo during the financial year under review wasINR 196220.30.

Corporate Social Responsibility

In accordance with the provisions of Section 135 of the Companies Act 2013 read withrules made thereunder the Company has constituted a Corporate Social ResponsibilityCommittee which framed a CSR Policy for the Company and the same has been approved bythe Board of Directors of the Company which is available on the website of the Company.CSR Policy of the Company has vision to make concrete efforts towards providing preventinghealth care sustainable development of green environment and welfare of animals etc.

Generally the Company under took its CSR activities through the outside ImplementingAgency(ies) which are carrying out such kind of CSR activities similar to the activitiesas approved by the CSR Committee and Board of the Company under the CSR Policy of theCompany. For the financial year 2019-20 the Board of Directors of the Company in theirmeeting held on May 17 2019 approved INR 16.12 million as the budget for CSR activities.But due to difficulty to find out suitable activities/implementing agency as perCompany's CSR policy only INR 9.79 million was spent out of budget amount during thefinancial year 2019-20. For the balance amount of the CSR budget of financial year2019-20 CSR Committee and Board have recommend to carry forward the same and shall bespent during the upcoming years.

Composition of CSR Committee is disclosed in Corporate Governance Section of thisAnnual Report as part of Board's Report and other details as required under CompaniesAct 2013 is as annexed with this Report as Annexure B.

Internal Financial Control

The Company remains committed to improve the effectiveness of internal financialcontrols and processes which would help in efficient conduct of its business operations inensuring security to its assets prevention and detection of frauds and errors accuracyand completeness of accounting records and timely preparation of reliable financialinformation.

The Company has put in place adequate internal controls with reference to accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation commensurate with the size scale and complexity of operations and ensurescompliance with various policies and statutes in keeping with the organizations pace ofgrowth increasing complexity of operations prevention and detection of frauds anderrors. The Internal Financial Controls with reference to the financial statements areadequate in the opinion of the Board of Directors.

The internal control is supplemented by an extensive program of internal externalaudits and periodic review by the Management. This system is designed to adequately ensurethat financial and other records are reliable for preparing financial information andother data and for maintaining accountability of assets. An independent firm of CompetentChartered Accountants has been engaged by the Company for conducting internal audit toexamine and evaluate the adequacy and effectiveness of internal financial control systemof the Company. The Internal Audit team is responsible to assist the Audit Committee andRisk Management Committee on an independent basis with a complete review of the riskassessments and associated management action plans. The Internal Audit Reports and Riskrelated report are reviewed periodically by the Audit Committee and Risk ManagementCommittee of the Company. Efficacy of Internal control systems is tested periodically byInternal Auditors and Internal Control over financial reporting is tested and certifiedby Statutory Auditor.

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.

Risk Management

NBFCs form an integral part of Indian financial system. NBFCs are required to ensurethat a proper framework on Risk Management System is formulated and put in place. For thispurpose the Company in addition to Audit Committee has also constituted Assets LiabilityManagement Committee and Risk Management Committee the details of the functioning ofthese Committees and its frequency of meetings are provided in Report on CorporateGovernance forming part of this Annual Report. These Committees are constituted tofacilitate the Board to address the risk associated with the business of the Company anddeveloped and implemented a Risk Management Policy to ensure sustainable business growthwith stability and promote a proactive approach in reporting evaluating and resolvingrisks associated with the Company's business. The Policy also highlights the functionsresponsibilities and role of the Committees and Board to address the risks associated withthe Company and to mitigate/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.

Human Resources

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

The Company strives to provide the best work environment with ample opportunities togrow and explore. Healthy cordial and harmonious industrial relations have beenmaintained 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 withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of employees of the Company has been appended as Annexure C of thisReport. In terms of first proviso to Section 136 of the Act the Report and Accounts arebeing sent to the Members and others entitled thereto excluding the information onemployees particulars as required pursuant to provisions of Rule 5(2) and Rule 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The saidinformation is available for inspection by the Members at the Registered Office of theCompany during business hours on working days of the Company up to the date of the ensuingAGM. If any Member is interested in obtaining a copy thereof such Member may write to theCompany Secretary in this regard.

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

The Company is committed to providing and promoting a safe and healthy work environmentfor all its employees. A Policy on Prevention of Sexual Harassment at work place which inline with the statutory requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013. is in place for ensuring protectionagainst the Sexual Harassment and right to work with dignity. The Directors further statethat during the year under review the Company has not received any complaint in thisregard..

Compliance of Reserve Bank of India Guidelines

Your Company is categorized as a Non-Deposit taking Systemically Important Non-BankingFinance Company (NBFC- NDSI). Accordingly during the year the Company has not acceptedany deposits from the public and there were no deposits which become due for repayment orrenewal. The Company has complied with the 'Master Direction-NonBanking Financial Company-Systemically Important Non-Deposit taking Company and Deposit taking Company (ReserveBank) Directions 2016' as amended from time to time and all other applicable Directionsof RBI during FY 2019-20.

Timely Repayment of Debt Liabilities

During the year under review the Company has duly serviced all its debts obligationsin time.

Dematerialization of Equity Shares

Equity Shares of the Company are compulsorily tradable in demat form. As on March312020 99.99% of the Equity Shares are held in demat form and only 6006 out of42292199 Equity Shares were held by the shareholders in physical form.

Extracts of Annual Return

In compliance with Section 134(3)(a) of the Act the extract of Annual Return in MGT-9as required under Section 92(3) of the Act and prescribed in Rule 12 of the Companies(Management and Administration) Rules 2014 may be accessed on the Company's website athttps://www.

Management Discussion and Analysis

The Management Discussion and Analysis report for the year under review as requiredunder Regulation 34(2)(e) of the Securities and Exchange Board of India (LODR)Regulations 2015 (LODR) is provided as a separate section forming part of the AnnualReport.

Corporate Governance

Your Company strives to ensure that best Corporate Governance practices are identifiedadopted and consistently followed. It is ensured that the practices being followed by theCompany are in alignment with its philosophy towards Corporate Governance. Your Companybelieves that good Corporate Governance is the basis for sustainable growth of thebusiness and effective management of relationship among constituents of the system andalways works towards strengthening this relationship through corporate fairnesstransparency and accountability. Your Company gives prime importance to reliable financialinformation integrity transparency fairness empowerment and compliance with law inletter and spirit.

In compliance with the provisions of Regulation 34 of the SEBI (LODR) Regulation 2015read with Schedule V to the said Regulations the Report on Corporate Governance forms anintegral part of this report and is set out as separate section of this Report and markedas Annexure D. The certificate from the Secretarial Auditor of the Company confirmingcompliance with the conditions of Corporate Governance is annexed to the Report onCorporate Governance.

Business Responsibility Report

Pursuant to Regulation 34(2)(f ) of the SEBI (LODR) Regulations 2015 as amended theBusiness Responsibility Report for the year under review is annexed to this Report asAnnexure E.


Your Board acknowledges and appreciates the relentless efforts of the employees andstaff including the management team headed by the Executive Directors who always lead fromthe front in achieving a commendable business performance year on year despite achallenging business environment. Your Board is indebted for the unstinted support andtrust reposed by you—the Members. Your Board wishes to place on record its deepappreciation of the Non-Executive Directors of the Company for their immense contributionby way of strategic guidance sharing of knowledge experience and wisdom which helpsyour Company to take right decisions in achieving its business goals. Your Boardacknowledges the support and co-operation received from all regulatory authorities of theCentral Government and all State Governments in India. Your Board takes this opportunityto thank all its Banks and other stakeholders as it considers them essential partners inprogress. Your Board is also looking forward to continued support and co-operation infuture.

Date : 13th August 2020
Place : New Delhi

For & on behalf of the Board of Directors of

Paisalo Digital Ltd.

Sd/- Sd/-
(Sunil Agarwal) (Harish Singh)
Managing Director & CEO Executive Director
DIN :00006991 DIN :00039501