SG Finserve Ltd

Dear Members,

Your directors have pleasure in presenting the Thirtieth (30^th) Annual Report, together with the Audited Financial Statement of the Company for the Financial Year ended March 31, 2024 ("FY 2024").

FINANCIAL PERFORMANCE

The Audited Financial Statements of your Company as on March 31, 2024, are prepared in accordance with the relevant applicable Indian Accounting Standards ("Ind AS") and Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the provisions of the Companies Act, 2013 ("Act").

A Summary of the Company's Financial Performance for the FY 2024 is as follows.

(Amount in Rslakh)

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

Duringthe yea r u nder review, you r Com pa ny ach ieved Tota I Revenue and Net Profit of T18,971.94 lakh and T7,858.49 lakh respectively as against Total Revenue and Net Profit of T4,196.18 lakh and T1,840.63 lakh respectively during the previous financial year ended March 31,2023.

RBI REGULATIONS

Your Company continues to comply with all the Regulations issued by the Reserve Bank of India to the extent as applicable to the Company.

DIVIDEND

Keeping in view the need to augment the resources of the company for future, your directors do not recommend the payment of dividend for the FY 2023-24.

LISTING OF SECURITIES

The Equity shares of the Company are presently listed on BSE Limited.The Annual listing fees for the year 2024-25 has been paid to the BSE Limited.

ANNUAL RETURN

In accordance with the provisions of Section 134 (3)(a) of the Companies Act, 2013, the Annual Return, as required under Section 92 of the Act for the financial year 2023- 24, is available on the Company's website at https://www. safinserve.com/annual-return

MANAGEMENT'S DISCUSSION AND ANALSYS

The report on Management Discussion and Analysis as required under Regulation 34 and schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented in a

separate section, forming an integral part of this Annual Report. Certain statements in the report may be forward- looking. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

PUBLIC DEPOSITS

The Company has not invited or accepted any public deposit during the year under review.

DIVIDEND DISTRIBUTION POLICY

Pursuant to the provisions of regulation 43A of the SEBI Listing Regulations, the Company had formulated a dividend distribution policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/or retaining profit earned. The policy is available on the website of the Company at https://www.safinserve.com/ investor

TRANSFER OF RESERVES

Under section 45-IC(1) of Reserve Bank of India ('RBI') Act, 1934, non-banking financial companies ('NBFCs') are required to transfer a sum not less than 20% of its net profit everyyearto reserve fund before declaration ofanydividend. Accordingly, SG Finserve Ltd. (the 'Company; or 'SGFL') has transferred a sum of Rs1,987.10 lakhs to its reserve fund.

CHANGES IN SHARE CAPITAL AND MEMORANDUM OF ASSOCIATION

The Authorized share capital as on March 31, 2024 was ^60,00,00,000.

The paid-up equity share capital as on March 31, 2024 was ^54,97,90,000.

The Company has not issued shares with differential voting rights, sweat equity shares and bonus Shares.

The company has converted the following Fully Convertible Warrants into an equivalent number of equity shares.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company did not have any Subsidiary/Joint Venture/ Associate Companies during the year under review.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company, being an NBFC registered with the RBI is exempt from complying with the provisions of Section-186 ofthe Act with respectto loans,guaranteesand investments. Accordingly, the Company is exempt from complying with the requirements to disclose in the financial statement the full particulars ofthe loans given, investment made or guarantee given or security provided.

PARTICULARS OF REMUNERATION

Disclosure of ratio of the remuneration of the Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed to this report as Annexure'A'. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms ofthe provisions

of section 136 of the said Act, the report and accounts are being sent to all the members ofthe Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary/Compliance Officer. The said information is available for inspection at the registered office of the Company during working days ofthe Company up to the date of the ensuing annual general meeting.

DIRECTORS AND KEY MANAGERIAL PERSONS

As on March 31, 2024, the Company had six Directors on its Board, all six were Non- Executive Directors. Out of six Nonexecutive Directors, four were Independent Directors.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Rules made thereunder and pursuant to Articles of Association of the Company, Shri Rahul Gupta (DIN: 07151792) Director of the Company, is liable to retire by rotation at the ensuing AGM and being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment for the consideration of the members of the Company at the ensuing AGM.

The Board also appointed Shri Dukhabandhu Rath (DIN: 08965826) as an Additional Independent Director for a

period of 3 years w.e.f. 25 January 2023 through resolution by circulation.

The Board also appointed Shri HSU Kamath (DIN: 02648119) as an Additional Independent Director for a period of 3 years w.e.f. 13 February 2023 through resolution by circulation.

The appointment of both the directors were subsequently regularized by the members through postal ballot dated April 23,2023.

Shri Sachin Kumar resigned as Company Secretary & Compliance Officer w.e.f. April 3, 2023 for making a career move to another organisation.

Ms. Ritu Nagpal (M. No.:- A38318) was appointed as Compliance Officer on April 3, 2023 and as Company Secretary in the Board meeting held on May 11,2023, in his place.

CORPORATE GOVERNANCE REPORT

The Corporate Governance philosophy of the Company is driven by the interest of stakeholders and business needs of the organization. The Company continues to be compliant with the requirements of Corporate Governance as enshrined in Listing Regulations. In terms of Regulation 27 of Listing Regulations, the Corporate Governance Report along with certificate received from Secretarial Auditors of the Company certifying compliance with the conditions of Corporate Governance is annexed as Annexure"B"forming integral part of this Report.

MATERIAL CHANGES AND COMMITMENTS

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

BOARD AND COMMITTEES'MEETINGS

The Board meets at regular intervals to, inter-alia, discuss the Company's policies and strategies apart from other Board matters. The Tentative annual Calendar of the Board and Committee Meetings is circulated to enable the Directors to plan their schedule and to ensure participation in the meetings. The notice for the Board/Committees Meetings is also given in advance to all the Directors.

DECLARATION BY INDEPENDENT DIRECTORS

The independent directors have submitted a declaration of independence, stating that they meet the criteria of independence provided under section 149(6) of the Act read with regulation 16 of the SEBI Listing Regulations, as

amended. The independent directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.

The Board took on record the declaration and confirmation submitted by the independent directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the SEBI Listing Regulations.

Further, in the opinion of the Board, the independent Directors of the Company possess the requisite expertise, skills and experience (including the proficiency) and are persons of high integrity and repute as well as are independent of the management.

CORPORATE POLICIES

We seek to promote and follow the highest level of ethical standards in our business transactions. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All the policies are available on the website of the Company at https://www.safinserve.com/ policy

The Policies are reviewed periodically by the Board and updated on the basis of requirement in accordance with revision in compliance guidelines.

The Key Policies are as follows:

I. Nomination and Remuneration Policy

In accordance with the provisions of section 134 (3) (e) of the Companies Act, 2013 read with Section 178 (4) and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your company has adopted the policy on appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter - alia includes the criteria for determining qualifications, positive attributes and independence of directors.

Yourcompany has also adopted policyon remuneration of Directors, Key Managerial Personnel and Employees of the company in accordance with the provisions of sub section (4) of section 178. The Policy is available on the Company's website https://www.safinserve.com/ policy

II. Risk Management Policy

Your company has a comprehensive Risk Management Policy in place and laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. The Policy is available on the Company's website https://www.safinserve.com/policv

III. Whistle Blower Policy - Vigil Mechanism

The company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its directors, employees and stakeholders associated with the company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed there under and the Listing Regulation is implemented through the Whistle Blower Policy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors,orany Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. The Whistle Blower Policy has been appropriately communicated within the Company and is available on the Company's website https://www.safinserve.com/policv.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In line with the provisions of Section 135, Schedule VII of the Companies Act, 2013, theCompany hasframed its Corporate Social Responsibility (CSR) policy for development of project named "Vidyadhara" for the benefit of under privileged children towards their basic education and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR)

policy of the Company provides a road map for its CSR activities.

During the year under review, the Company has made contribution of T8.16 Lakhs for the project "Vidyadhara" in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility and has transferred T10.74 Lakhs to the unspent CSR account of the Company on 31.03.2024 pertaining to ongoing projects.

The Annual Report on CSR activities for the financial year 2023-24 containing salient features of CSR Policy and other relevant details is annexed herewith as Annexure 'C'. The CSR Policy has been uploaded on the Company's website and may be accessed at the link: https://www.safinserve. com/csr-initiative.

AUDITORS AND AUDITORS' REPORT

A. STATUTORY AUDITORS AND AUDITORS' REPORT

The members of the Company in their last Annual General Meeting held on 26^th September, 2023 had appointed M/s AKGVG & Associates, Chartered Accountants (Firm Registration Number: 018598N) as the Statutory Auditors of the Company, to hold office from the conclusion of the 28^th Annual General Meeting until the conclusion of the 32^nd Annual General Meeting of theCompany to be held in year 2027.

The Auditor's Reports on the Financial Statements for the financial year ended March 31, 2024 does not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

The Notes to Accounts referred to in the Auditors' Report are self- explanatory and do not call for any further comments.

B. INTERNAL AUDITORS

In terms of section 144 of Companies Act, 2013, The Company had appointed M/s Ernst & Young LLP, Chartered Accountants as their Internal Auditors to carry out the Internal Audit of various operational areas of the Company.

C. SECRETARIAL AUDIT REPORT

The Board of the Directors of the Company had appointed M/s Kuldeep Dahiya & Associates, Company Secretaries (Membership No.: 34404 and C.P.No.:18930) to conduct the Secretarial Audit of the Company pursuant to the provision of Section 204 of the

Companies Act, 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of sub - section (1) of Section 204, the Secretarial Audit Report for the financial year 2023-24 is appended to this report as Annexure"D".The same does not contain any adverse remark or disclaimer.

The Secretarial Auditor's Report for the financial year ended March 31, 2024 does not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has duly complied with the applicable provisions of the Secretarial Standards issued by the Institute of Companies Secretaries of India.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE INCOME/OUTFLOW

As the company is not engaged in the manufacturing activity, the prescribed information regarding compliance of rules relating to the Conversation of Energy and Technology absorption pursuant to section 134 (3)(m) of the Companies Act, 2013, read with Rule-8 (3) of the Companies (Accounts) Rules, 2014 is not provided. The Company does not have any Foreign Exchange Earnings and outgo in the year under review.

PARTICULARS OF CONTRACT OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during FY2024 with related parties were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. All related party transactions entered during FY2024 were on arm's length basis and not material under the Act and SEBI Listing Regulations. Details of transactions with related parties during FY 2023-24 are provided in note no. 28 to the financial statements.

The policy on materiality of related party transactions and on dealing with related party transactions was amended in line with SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021. The policy is available on the website of the Company at https:// www.sqfinserve.com/policv and also forms a part of the Corporate Governance Report.

Further, the Company has not entered into any contract or arrangement or transaction with the related parties which were not on arm's length basis or could be considered material in accordance with the policy of the company on materiality of related party transaction in view of the above, it is not required to provide the specific disclosure of related party transaction in form AOC-2 in terms of Section 134 of theCompanies Act, 2013.

Your directors draw attention of the members to Note No. 28 to the Financial Statement which sets out related party disclosure.

DETAILS OF PECUNIARY RELATIONSHIPS OR TRANSACTIONS OFTHE NON-EXECUTIVE INDEPENDENT DIRECTOR VIS-A-VIS THE COMPANY

There are no pecuniary relationships or transactions of the non-executive independent director vis-a-vis the Company for the period ending March 31,2024.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal Financials Control with reference to financial statements, commensurate with the size, scale, and complexity of its operation to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized recorded and reported correctly.

Reasonable Financial Controls are operative for all the business activities ofthecompany and no material weakness in the design or operation of any control was observed.

ORDERS PASSED BY THE REGULATORS OR COURTS, IF ANY

No significant and material orders were passed by the Regulators, Courts orTribunals impacting the going concern status and Company's Operation in future.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013 with respect to Directors responsibility statement, the Directors of the company hereby confirm that:

i) In preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the company at the end of financial year and of the profit of the company for that period.

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) Directors have prepared the annual accounts on a going concern basis.

v) The Directors have laid down internal financial controls that are adequate and were operating effectively.

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

EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company grants share-based benefits to eligible employees with a view to attract and retain talent, encouraging employees to align individual performance with the Company's objectives, and promoting increased participation by them in the growth of the Company.

During FY 2023-24, the Company added 5 lakh ESOPs and increased the pool of ESOPs from 5 lakhs to 10 Lakh (Moongipa Securities Limited Employee Stock Option Scheme, 2022, herein referred as ESOS 2022) and the scheme received in-principle approval from BSE on May 10, 2024. The said increase was in compliance with SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the ESOS-2022 to the employees of the Company shall not exceed 10,00,000 equity shares. Further, a statement giving complete details under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as on March 31, 2024 is available on the website of the Company at https://www.safinserve.com/ communication-to-shareholders . There is no material change in the said scheme during the year.

The Certificate from the Secretarial Auditors of the Company certifying that the ESOS 2022 is being implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF).

No amount was lying unpaid or unclaimed for a period of seven years. Therefore, no funds were required to be transferred to Investor Education and Protection Fund (IEPF).

CASH FLOW STATEMENT

The cash flow Statement for year ended March 31, 2024 is in conformity with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges in India, is annexed herewith.

DETAILS OF FRAUD, IF ANY REPORTED BY AUDITORS (OTHERTHAN REPORTABLETO CENTRAL GOVERNMENT)

No fraud / misconduct was detected at the time Statutory Audit by Auditors of the Company for the financial year ended on March 31, 2024.

GREEN INITIATIVE

Your Company has taken the initiative of going green and minimizing the impact on the environment. The Company has been circulating the copy of the Annual Report in electronic format to all those Members whose email address is available with Company. Your Company would encourage other Members also to register themselves for receiving Annual Report in the electronic Report form.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act and an Internal Complaints Committee has also been set up to redress complaints received regarding Sexual Harassment.

No complaint of sexual harassment was received during the financial year 2023-24.

OTHER DISCLOSURES AND REPORTING

Your Directors state that no disclosure or reporting is

required with respect to the following items as there were

no transactions on these items during the year under

review:

1. Change in the nature of business of the Company.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.

4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.

5. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and company's operations in future.

6. Material changes affecting the financial position of the Company which have occurred between the end of

the financial year of the Company and the date of the Report.

7. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

8. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof

ACKNOWLEDGEMENT

The Board of Directors places its gratitude and appreciation for the support and cooperation from its members, the RBI and other regulators, banks and financial institutions.

The Board of Directors also places on record its sincere appreciation for the commitment and hard work put in by the employees of the Company and thanks them for yet another excellent year of performance.