To The Esteemed Members

The Board of Directors ("Board") of PHF Leasing Limited ("your Company" or "the Company") is feeling delighted to present their 32nd Annual Report with the Audited Financial Statements of the Company for the financial year ended March 31, 2024 ("FY 2023-24") or "period under review" or "financial year under review".

1. FINANCIAL AND OPERATIONAL SUMMARY

1.1 Financial Highlights

The Company's summarized financial performance for the financial year ended March 31, 2024 as compared to the previous financial year ended March 31, 2023 are as under:

The above figures are extracted from the Standalone Financial Statements prepared in accordance with Indian Accounting Standards ("Ind AS") as notified under Sections 129 and 133 of the

Companies Act, 2013 ("the Act") read with the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

i) Revenue from Operations

During the F.Y. 2023-24, Revenue from Operations of your Company increased to Rs. 3466.70 Lakhs marking a tremendous growth of 95.34% over the previous year's Revenue of Rs. 1774.74 Lakhs.

The company has expanded its operations into new geographical regions or states, which has likely opened up new markets and revenue streams. In addition to expanding into new states, the company has also focused on increasing its market share and presence in the areas where it already operates. This could involve capturing more customers, launching new products or services, or strengthening its existing operations. The company has not only increased its revenue but has also enhanced its efficiency in resource utilization, cost management, and operational streamlining, resulting in improved overall performance.

Your company's exceptional credit policies, solid customer connections, and systematic debt recovery strategies have upheld unparalleled asset quality standards.

ii) Profit Before Tax (PBT)

Your Company earned Profit Before Tax (PBT) of Rs. 343.87 Lakhs for the Financial Year 2023-24 as against the profit of Rs. 144.57 Lakhs in the previous Financial Year ending March 31, 2023 resulting a growth of 137.86%. This achievement is a result of business expansion, increase in sales revenue, Improvements in operational efficiency, Effective cost management measures, adjusting pricing strategies to maximize profitability without sacrificing sales volume, strategic fund allocation, and optimized collection practices. Some other favorable macroeconomic conditions such as economic growth, low inflation, and stable interest rates can positively impact business performance and profitability, leading to higher profit before tax.

For an in-depth review of income, expenditure, and financial ratios, please refer to the Management Discussions and Analysis Report, a component of this document.

iii) Profit After Tax (PAT)

The total comprehensive Income for the Financial Year 2023-24 is Rs. 380.02Lakhs as against Rs. 137.31 Lakhs in the previous financial year 2022-23 registering a growth of 176.77%. Your company's commitment to conservative cost management policies, combined with its ability to secure resources at competitive rates, increased sales, improved operational efficiency, cost management initiatives, introduction of new products or favourable market conditions has effectively maintained margins at a commendably reasonable level. Ultimately, an increase in profit after tax is typically seen as a positive sign of financial growth and success for the company.

iv) Earnings Per Share

The Company has earned good profits in the financial year under review, hence, the Basic Earnings Per Share (EPS) of the Company is recorded at Rs. 3.14 and the Diluted Earnings Per Share (DEPS) of the company is recorded at Rs. 3.13 for the FY 2023-24. Overall, the increase in Earnings per Share reflects our commitment to delivering value to our shareholders through sustained growth and profitability. We remain dedicated to executing our strategic initiatives and capitalizing on growth opportunities to drive continued EPS expansion in the future.

v) Capital to Risk Weighted Assets Ratio (CRAR)

The Company's Capital to Risk Weighted Assets Ratio (CRAR) stood at 30.14% as at the end of the financial year under review as compared to 32.40% as on March 31, 2023 of the aggregate risk weighted assets on balance sheet. The company's CRAR, although lower compared to the previous period, remains comfortably above the regulatory minimum of 15%, indicating a strong capital position and adherence to regulatory requirements.

The Tier 1 ratio as on March 31, 2024 is 24.18 % as against 24.23% as on March 31, 2023.

The Tier 2 ratio as on March 31, 2024 is 6.05 % as against 8.17% as on March 31, 2023.

i) Branch Expansion

The Company has broadened its footprint to encompass several additional states, including Punjab. Presently, it operates across a diverse range of regions, including Haryana, Delhi NCR, Himachal Pradesh, Rajasthan, Uttarakhand, Madhya Pradesh, Uttar Pradesh, Jammu, Bihar, Assam, Jharkhand and Chhattisgarh. This expansion involves the addition of numerous dealers and sub-dealers across various locations.

The Company has branches/ collection offices at Amritsar, Batala, Kapurthala, Tarn Taran, Ludhiana, Ferozepur, Hoshiarpur, Delhi NCR, Abohar, Muktsar, Malout, Jaipur, Jagraon, Moga, Pathankot, Khanna, Nawanshahr, Sri Ganga Nagar, Zirakpur, Hanumangarh, Noida, Jalandhar & Varanasi. The company is making decisions or taking actions with an eye towards its future growth prospects. Our Company keeps a forward-looking approach that takes into account the company's ability to capitalize on opportunities and achieve long-term success.

The company's proactive approach to growth and expansion, highlighting its plans to open new centers at various locations and diversify its business activities into specific states during the upcoming fiscal year.

Recruitment endeavors were broad-based, spanning across diverse roles and responsibilities within the organization, rather than being restricted to specific positions. The company's efforts to expand its workforce by recruiting employees across all levels, resulting in a notable increase in employee strength from about 333 employees as on March 31, 2023 to 495 as on March 31, 2024.

ii) Operational Cost

The Company has expanded its operations in various locations in Punjab and other neighboring states and also captured the E-Vehicles business in the market which has resulted in increase in the employee benefit expenses. Consequently, the operational cost of the Company has also increased during the financial year under review. However, this increased cost is a result of the expansion and growth of the business and would help the Company in long run.

During the year, the operational and financial performance of your Company was as follows:

Disbursements

The company experienced significant growth in its total loan portfolio, which expanded by 85.50% to reach a value of Rs. 14757.91 Lakhs as of March 31, 2024. The retail and SME segments are the company's preferred areas for lending, which align with the company's strategic objectives, risk appetite, and target customer base. The notable growth in the loan book indicates successful business expansion and the ability to capture market opportunities.

The company is diversifying its loan portfolio by including a larger number of smaller loans across different sectors or customer segments, which includes Amritsar, Batala, Kapurthala, Tarn Taran, Ludhiana, Ferozepur, Hoshiarpur, Delhi NCR, Abohar, Muktsar, Malout, Jaipur, Jagraon, Moga, Pathankot, Khanna, Nawanshahr, Sri Ganga Nagar, Zirakpur, Hanumangarh, Noida, Jalandhar & Varanasi. The company's move towards a more granular portfolio mix indicates a strategic shift towards diversification and risk management, with the aim of reducing the average size of loans in its portfolio. By focusing efforts on increasing customer base and diversifying product categories, especially in MSME and retail lending through E-Vehicles, the company aims to:

? Expand its market reach and customer engagement. ? Capture new revenue streams and business opportunities. ? Enhance its competitiveness and differentiation in the market. ? Address evolving customer preferences and market trends. ? Contribute to sustainable and inclusive economic development.

3. RECOVERY & STRESSES ASSETS MANAGEMENT

The movement of NPAs during the last four financial years are furnished below:

The Reserve Bank of India (RBI) issued guidelines on June 7, 2019, under Circular RBI/2018-19/ 203 DBR.No.BP.BC.45/21.04.048/2018-19, outlining the Prudential Framework for Resolution of Stressed Assets.

RBI's 7th June 2019 circular on prudential framework for resolution of high value distressed assets has provided a new avenue for timebound resolution of these accounts. Your company is actively exploring resolution under this mode.

In accordance with the aforementioned circular, lenders are required to promptly identify emerging stress in loan accounts upon default, categorizing them as Special Mention Accounts (SMA). Consequently, adherence to the Circular's guidelines, income recognition, asset classification, and provisioning have been duly applied. Accounts with overdue payments exceeding 90 days have been classified as Non-Performing Assets (NPAs).

In the event of selling stressed assets below the net book value (i.e., the funded outstanding minus specific provisions held), any shortfall is recorded as an expense in the Profit and Loss Account. Conversely, if the sale exceeds the net book value, the surplus provision is recorded as income in the Profit and Loss Account. This adjustment occurs when the total cash received from initial consideration and/or redemption or transfer of security receipts issued by the SC/RC surpasses the net book value of the loan at the time of transfer.

As of March 31, 2024, the Gross Non-Performing Assets (NPA) totaled Rs. 423.81 Lakhs, marking an increase from the previous year's figure of Rs. 190.67 Lakhs. The overall net NPA of the Company also rose by 117.40% compared to the previous period. It is anticipated that the NPAs will decrease further with the expansion of the portfolio and improved collection efficiency.

Furthermore, the Company has executed the sale of stressed assets to Asset Reconstruction Company (ARC) amounting to Rs. 3,82,57,141/.-. Additionally, a sum of Rs. 57,38,571/- has been written off based on the valuation of assets.

4. SHARE CAPITAL AND DEBENTURES

4.1 Capital Structure

To strengthen the Company's capital base and balance sheet and to augment the long-term resources for meeting funding requirements of its business activities, financing the future growth opportunities, general corporate and other purposes, the Authorized Share Capital of the Company was increased to Rs. 40,00,00,000 (Rupees Forty Crores Only) divided into 4,00,00,000 (Four Crores) Equity Shares of Rs. 10/- (Rupees Ten Only) each during the year under review.

The Authorized Share Capital of the Company as on March 31, 2024 is Rs. 40,00,00,000 (Rupees Forty Crores Only) and the issued, subscribed and paid-up share capital of the Company is as below:-

The difference in issued share capital and subscribed & paid up share capital is on account of the 14,500 (Fourteen Thousand and Five Hundred) equity shares that have been forfeited by the Company.

A. Preferential Issue of Equity Shares

During the year under review, the Company did not raise any funds through the issuance of equity shares.

Below are the details of the equity share capital as on March 31, 2024:

(Amount in Rs.)

Preferential Issue of Equity Warrants

During the financial year under review, the Company allotted 1,84,60,510 (One Crore Eighty Four Lakhs Sixty Thousand Five Hundred and Ten) Equity Warrants ("Warrants") at a price of Rs. 25/- (Rupees Twenty Five Only) per Warrant , with a right to the warrant holders to apply for and be allotted 1 (One) Equity Share of the face value of Rs. 10/- (Rupees Ten Only) each of the Company ("the Equity Shares") at a premium of Rs. 15/- per share for each Warrant within a period of 18 (Eighteen) months from the date of allotment of the Warrants, aggregating to Rs. 46,15,12,750/- ( Rupees Forty Six Crores Fifteen Lakhs Twelve Thousand Seven Hundred Fifty Only) for cash consideration on a preferential basis ("Preferential Issue") to the persons belonging to non-promoter category

B. Private Placement Issues of Non-Convertible Debentures

During the financial year under review, the Company had allotted Secured Redeemable Non- Convertible Debentures (SRNCDs) on private placement basis as follows:

During the financial year under review, the Company allocated Subordinate-Debt Bonds (referred to as SDBs) in the form of Unsecured Redeemable Non-Convertible Debentures (NCDs) through private placement, as outlined below:

The Company has been regular in its payment obligations towards the NCDs.

4.2 Banks/FIs

As of March 31, 2024, the Company's total Borrowings amounted to Rs. 13,870.01 lacs, as compared to Rs. 8,336.41 lacs in the previous year. During the financial year under review, the Company secured a term loan of Rs. 5,350 lacs from various banks and financial institutions. Additionally, the Company obtained a term loan of Rs. 10 crores from the State Bank of India.

Furthermore, the Company strengthened its ties with existing bankers by securing additional working capital and term loan facilities.

5. DIVDENED

Keeping in view the performance of the Company and to preserve the profits for future expansion, the Board has decided to plough back its profits and has not recommended any dividend for the financial year under review.

6. CREDIT RATING

During the year, CRISIL assigned BBB- rating for the company's long term fund based facilities of

Rs. 25 Crore and BBB- rating for Fixed Deposits of Rs. 25 Crore.

7. RISK MANAGEMENT

Throughout the fiscal year, the Company has remained steadfast in its commitment to identifying, assessing, and mitigating various risks that may impact its operations, financial performance, and strategic objectives. The proactive management of risks continues to be a cornerstone of our corporate governance framework, ensuring resilience and sustainability in an ever-evolving business landscape. the Company has adopted a multifaceted approach to risk management, which includes:

? Regular risk assessments and scenario analyses to identify emerging risks and vulnerabilities. ? Implementation of risk mitigation measures tailored to specific risk profiles, including diversification strategies, hedging techniques, and insurance coverage.

? Ongoing monitoring and review of risk exposures to ensure timely and appropriate responses to evolving risk dynamics. ? Strengthening internal controls and governance structures to enhance risk oversight and accountability across all levels of the organization.

By presenting the note on risk management implementation separately within the MD&A Report, stakeholders can gain deeper insights into the Company's approach to managing risks and its integration with strategic decision-making processes.

UPDATE

The Company recognizes the importance of adhering to applicable laws, regulations, and industry standards in all aspects of its operations. Throughout the reporting period, stringent measures were implemented to ensure compliance with relevant legal requirements, thereby upholding the Company's commitment to ethical conduct and corporate governance excellence.

The Company, registered as a deposit-taking Non-Banking Financial Company (NBFC) with the Reserve Bank of India, has diligently adhered to all pertinent guidelines and directives issued by the Reserve Bank of India (RBI) and other applicable laws.

As a listed entity, the Company has ensured full compliance with the disclosure requirements mandated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, throughout the financial year under review. Additionally, the Company has meticulously complied with all other SEBI regulations relevant to its operations.

Furthermore, the Company has fulfilled its obligations under the Companies Act, 2013, by filing all requisite information and forms with the concerned Registrar of Companies (ROC) during the financial year.

In its capacity as an issuer of various securities, the Company has upheld compliance with the applicable provisions, terms, and conditions outlined in contracts and agreements executed with stock exchanges, debenture trustees, depositories, depository participants, and Registrar & Transfer Agent, as mandated by prevailing regulations.

Looking ahead, the Company remains committed to maintaining a culture of compliance and upholding the highest standards of ethical conduct in all its operations. Continuous monitoring of regulatory developments, proactive risk assessments, and ongoing compliance initiatives will be integral to ensuring sustained compliance with applicable laws and regulations.

The Company reaffirms its commitment to compliance with applicable laws, regulations, and industry standards as a cornerstone of its corporate governance framework. By prioritizing compliance and ethical conduct, the Company aims to enhance stakeholder trust, mitigate legal and reputational risks, and drive sustainable long-term value creation.

8.2 Compliance with Secretarial Standards

The Company has ensured compliance with the applicable provisions of Secretarial Standards issued by The Institute of Company Secretaries of India. This commitment underscores the Company's dedication to upholding the highest standards of corporate governance and regulatory compliance in its operations.

9. DETAILS OF SUBSIDIARIES/ ASSOCIATES/JOINT VENTURES

The Company does not have any subsidiary/ joint venture/ associates as on March 31, 2024.

10. TRANSFER TO GENERAL RESERVE/STATUTORY RESERVES

The transfer to General Reserves/Statutory Reserves is reflected in the financial statements, contributing to the strengthening of the Company's balance sheet and enhancing its financial standing. This allocation underscores the Company's commitment to maintaining a robust financial position and fortifying its ability to weather future challenges.

During the financial year under review, an amount of Rs. 77.76 Lacs, equivalent to 20% of the profit after tax (PAT), has been allocated to the Statutory Reserve of the Company in accordance with the provisions of Section 45-IC of the Reserve Bank of India Act, 1934.

Internal Financial Controls at our Company consist of a comprehensive set of policies and procedures designed to ensure efficient and orderly business operations. These controls are essential for adhering to Company policies, safeguarding assets, detecting and preventing fraud, maintaining accurate and complete accounting records, and providing reliable financial information. The key elements are:

? Policies and Procedures:

o The Company has implemented well-defined policies and procedures to guide business conduct. Delegation of authority is formally documented, ensuring clarity in roles and responsibilities.

o An established organizational structure facilitates effective workflow and decision-making.

o Segregation of duties is enforced to prevent conflicts of interest and enhance internal controls.

? Prevention and Detection of Fraud and Errors: o A proactive anti-fraud framework is in place to manage risks associated with fraudulent activities.

? Timely Preparation of Reliable Financial Information:

o Financial items are accurately described, classified, and organized to ensure transparency in reporting.

o Financial information is prepared in accordance with stakeholder timelines, supporting informed decision-making.

? Safeguarding of Assets:

o The Company ensures ownership and protection of its assets through processes designed to prevent loss or misuse.

? Accuracy and Completeness of Accounting Records:

o Transactions are thoroughly recorded, ensuring complete documentation.

o Asset, liability, revenue, and expense records are accurately maintained and appropriately classified to facilitate reliable financial statements.

Our Company's internal control systems are tailored to our operations' nature, size, scale, and complexity. Standard Operating Procedures (SOPs) and Risk Control Matrices are meticulously designed and regularly updated to ensure their effectiveness.

Throughout the year, no significant issues were reported concerning the efficiency or adequacy of these controls, demonstrating our commitment to robust internal mechanisms that mitigate risks and uphold operational integrity.

Periodic internal audits validate the effectiveness of controls and compliance with guidelines and statutory requirements. The Audit Committee reviews the audit scope annually to ensure comprehensive coverage. Internal Audit Reports are scrutinized by the Audit Committee and Board of Directors, with significant observations promptly addressed and corrective actions taken.

We continuously enhance our internal financial controls through regular assessments, feedback mechanisms, and training initiatives. This ongoing vigilance ensures that our controls adapt to emerging risks and changing business conditions.

Internal financial controls are foundational to our governance framework, promoting transparency, accountability, and sound financial management. By maintaining robust controls and fostering a culture of compliance, we safeguard our assets, mitigate risks, and create sustainable value for our stakeholders.

11.2 Internal Control Systems

In response to the introduction of the Risk-Based Internal Audit (RBIA) system and in compliance with RBI guidelines (RBI/2021-22/53 DoS.CO. PPG.SEC/ 03/11.01.005/2021-22), the Company has adopted a Risk-Based Internal Audit Policy. This policy aims to provide the Board and Senior Management with reasonable assurance regarding the effectiveness of the Company's risk management and control framework.

The Internal Audit Department, led by Mr. Prabh Dayal, is tasked with evaluating and enhancing the organization's governance, risk management, and control processes through a structured and disciplined approach. The audit process covers all functional areas, including branch and Head Office operations, and serves as a critical tool for internal control. It will assess the adequacy and implementation of systems and procedures related to risk identification, measurement, and mitigation.

The Company has implemented comprehensive internal controls, systems, and procedures across all business segments and support functions. These measures are designed to protect assets from unauthorized use or disposal and ensure accurate and reliable transaction authorization, recording, and reporting. Independent internal audits are conducted based on the scope and schedule approved by the Audit Committee.

The internal audit team plays a vital role in evaluating control measures, recommending improvements to adapt to evolving business needs, and enhancing the control environment. Regular process reviews and risk assessments are performed to gauge the effectiveness and efficiency of controls.

With ongoing training and knowledge updates, the audit team effectively identifies and mitigates risks, ensuring that controls continue to support the Company's strategic objectives. As a key component of the third line of defense, the team detects risks, red flags, and early warning signals, facilitating timely adjustments through agile audit plans.

The internal audit department, staffed with experienced professionals, reports directly to the Audit Committee. The Committee rigorously reviews audit findings and assesses the adequacy and effectiveness of internal controls, ensuring a robust governance framework.

12. LISTING STATUS OF THE COMPANY

The Company's equity shares were listed on the Metropolitan Stock Exchange of India (MSEI) on May 16, 2018, and commenced trading on the MSEI from May 21, 2018, following circular no. MSE/LIST/6322/2018. As a listed entity, the Company ensures compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with any relevant statutory updates. Furthermore, the MSEI has given the in-principle approved to the Equity Warrants convertible into equity shares.

13. DEPOSITS

Contingent upon receiving a BBB- (Stable) credit rating from CRISIL and as per the RBI Master Directions Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)

Directions, 2016, and the Miscellaneous Non-Banking Companies (Advertisement) Rules of 1977, the Company initiated the acceptance of fixed deposits from Employees, Directors, and Shareholders effective September 30, 2023, subsequent to approval from the Board of Directors. Additionally, the Company submitted the requisite documentation to the Reserve Bank of India on November 14, 2023, to facilitate the acceptance of deposits from the general public also.

During the Financial Year ending March 31, 2024, the Company raised funds through fixed deposits amounting to Rs. 75.25 lakhs. Furthermore, there were no instances of deposit renewal or repayment by the company during the review period.

In compliance with the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, the Company has established a floating charge on statutory liquid assets, which include investments in government securities (face value) valued at Rs. 18.32 lakhs. This charge is in favor of trustees, acting on behalf of the public deposit holders of the Company.

14. ANNUAL RETURN

In accordance with the provisions of Section 92(3) of the Act, the Annual Return of the Companyis hosted on website of the company at the web link https://www.phfleasing.com/

15. LOANS, GUARANTEES OR INVESTMENTS

The loans disbursed, guarantees extended, and securities furnished by an NBFC registered with the Reserve Bank of India within the scope of its regular business operations fall outside the purview of Section 186 of the Act. Therefore, specifics regarding such transactions are not disclosed in this Report.

16. CORPORATE SOCIAL RESPONSIBILITY

No disclosure is mandated under this clause as the Company does not fall under the purview of Section 135 of the Act.

17.1 Statutory Auditors

In accordance with the Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) issued by the Reserve Bank of India (RBI) vide Notification Ref. No. DoS.CO.ARG/SEC.01/08.91.001/2021-

22 dated 27th April 2021 ("RBI Guidelines") and pursuantto the provisions of Section 139(8) and other applicable provisions of the Companies Act, 2013 readwith rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") (including any statutory modification(s) or re- enactment(s) thereof for the time being in force), and upon recommendation of the Audit Committee and Board of Directors, the Company in its 29th Annual General Meeting (AGM) held on September 23, 2021 had appointed M/s GSA & Associates LLP, Chartered Accountants, having FRN.: 000257N/N500339, as Statutory Auditors of the Company to hold office for a term of three years until the conclusion of the 32nd Annual General Meeting to be held in the calendar year 2024.Thus, the tenure of M.s GSA & Associates, LLP, Statutory Auditors will complete with the conclusion of 32nd Annual General Meeting .

17.2 Auditors' Report

M/s GSA & Associates, LLP, Chartered Accountants, who serve as the Statutory Auditors of the Company, have conducted an audit of the Company's financial statements for the fiscal year ending on March 31, 2024. In accordance with section 143(3) of the Act, the Statutory Auditors have also provided a report on the adequacy and effectiveness of the internal financial controls system over financial reporting, which is enclosed as an 'Annexure to Independent Auditors' Report'. It is noteworthy that the Statutory Auditors have not issued any qualifications in their report.

17.3 Response of the Board to the Auditors' Comment

The Auditors' Report, read with notes to the accounts are self-explanatory and therefore, do not require further comments/elaborations pursuant to Section 134 of the Act.

17.4 Internal Audit

Upholding stringent checks and balances, our Company conducts regular and thorough internal audits under the supervision of the independent Internal Audit Department. Spearheaded by the Mr. Prabh Dayal, the department scrutinizes internal controls, operational systems, and procedures, pinpointing opportunities for refinement. Proactively, the Audit function suggests enhancements to operational processes and service quality, effectively mitigating a spectrum of risks. Ensuring adherence to the Companies Act, 2013, the Audit Committee periodically reviews significant audit discoveries and oversees compliance measures.

17.5 Secretarial Auditors and Secretarial Audit Report and Secretarial Compliance Report

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") (including any statutory modification(s) or re- enactment(s) thereof for the time being in force) and upon recommendation of the Audit Committee and Board of Directors, the company had appointed M/s. Harsh Goyal & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit and Secretarial Compliance Audit of the Company for the financial year ended on March 31, 2024.

The Secretarial Audit Report in Form MR-3 for the financial year under review, as received from M/s. Harsh Goyal & Associates, Company Secretaries, is attached as Annexure III to the Board's Report. The Secretarial Audit Report is self-explanatory. Pursuant to Regulation 24A of the SEBI Listing Regulations, the Secretarial Compliance Report obtained from M/s. Harsh Goyal & Associates,

Practicing Company Secretaries for the financial year under review was placed before the Audit Committee and the Board.

The Secretarial Audit Report and the Secretarial Compliance Report do not contain any qualifications, reservations or adverse remarks.

17.6 Response of the Board to the observations of Secretarial Auditors in their Secretarial Audit Report and Secretarial Compliance Report

The Secretarial Audit Report and Secretarial Compliance Report for the FY 2023-24 does not contain any other observations, qualification or adverse remarks.

17.7 Reporting of Frauds by Auditors

Throughout the review period, neither the Statutory Auditors, Internal Auditors, nor the Secretarial Auditors have reported any instances of fraud perpetrated by the Company's Officers or Employees to the Audit Committee, as mandated by section 143(12) of the Act. Therefore, no details regarding such occurrences need to be included in this Report.

17.8 Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.

18. CORPORATE GOVERNANCE

2. At PHF, our commitment to responsible business practices and transparent governance is evident through our unwavering focus on governance and ethics. Our internal governance framework, led by a diverse Board of Directors with expertise from various fields, provides essential guidance to enhance stakeholder value.

Our CEO & Whole-time Director oversees daily operations with the support of our senior management team, ensuring effective supervision and control. The Board of Directors conducts regular assessments of policies, goals, and performance to maintain accountability and drive improvement.

Our Company's operations are further supported by several Board-established committees. These committees, in line with legal requirements, are dedicated to enhancing shareholder value, supporting management decisions, and maintaining high standards of transparency and corporate governance. PHF also mandates annual declarations from directors to confirm adherence to the Code of Conduct for the Board of Directors and Senior Management Personnel, reinforcing our commitment to ethical standards and responsible behavior.

We have implemented a comprehensive Business Responsibility Policy that highlights transparency, ethical conduct, and accountability. This policy ensures compliance with relevant laws and regulations and fosters a culture of integrity and professionalism.

Our zero-tolerance approach to bribery and corruption is enforced through rigorous policies and procedures. The Business Responsibility Policy and Code of Conduct expressly forbid any form of abusive, corrupt, or anti-competitive practices, maintaining a commitment to ethical behavior. A robust grievance redressal mechanism is in place to address concerns from stakeholders including communities, investors, shareholders, employees, and customers, ensuring prompt and effective resolution of issues.

PHF's commitment to governance and ethics drives us to operate responsibly and align with sustainability principles to generate long-term value. Our practices are grounded in transparency, accountability, and ethical behavior.

For more detailed information on PHF's Corporate Governance practices, please consult the Corporate

Governance Report. In accordance with Part C of Schedule V of SEBI Listing Regulations, we have included a Corporate Governance report and a compliance certificate from M/s Harsh Goyal & Associate, Company Secretaries, as Annexure II in this annual report.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties are integral to ensuring transparency and accountability within our organization. During the reporting period, all such transactions were conducted in the ordinary course of business and on an arm's length basis. As a result, no disclosure in Form AOC-2 is required.

The Board-approved policy governing the materiality of related party transactions and their handling is readily accessible on our Company's website at the web link: https://www.phfleasing.com/

It is noteworthy that there have been no materially significant related party transactions involving Promoters, Directors, Key Managerial Personnel, or other designated individuals that might pose a conflict of interest with the broader interests of the Company. Additionally, none of our Directors maintains any pecuniary relationships or transactions with the Company beyond those disclosed in the notes to the accounts.

Through these measures, we uphold our commitment to transparency, integrity, and ethical business practices in all our dealings with related parties.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO, IN MANNER PRESCRIBED

The information pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is as follows:

a. Conservation of Energy

The Company, being engaged in financing business within the country, does not have any activity intensive to energy. However, significant measures are taken to reduce energy consumption by using energy efficient computers and electrical equipment's. The Company has allocated specific cost budgets for the same in its head office and all its branches to reduce electricity waste and the same is monitored on periodical basis.

b. Technology Absorption

The Company is using customized centralized finance software for its operational and financial activities. It is designed to handle large volume of accounts and transactions. It is equipped with customizable modules, menu driven interface that can be easily adapted to the changing business and growth requirements that also safeguards IT investments. However, the company has planned to shift its software to fully integrated LOS and LMS which will help in efficiency and reduction incost. The Company is following the basic line of digitalization to blur the line between physical anddigital process through the Integration of technology to certain a contactless and seamless ecosystem.

The Company has not imported any technology during the last three financial years.

c. Foreign Exchange Earnings and Outgo

There was no foreign exchange earnings and outgo during the year.

21.1 BOARD OF DIRECTORS

The Board of Directors of PHF is at the nucleus of our corporate governance structure, steering the Company towards sustainable growth and value creation. Comprising individuals with diverse expertise and unwavering commitment, our Board remains dedicated to upholding the highest standards of integrity, transparency, and accountability.

Throughout the year under review, the Board has played a pivotal role in overseeing the Company's operations, ensuring that management actions align with the best interests of our stakeholders. Regular meetings and deliberations have provided a platform for strategic decision-making, policy formulation, and performance evaluation.

Our Board remains deeply engaged in fulfilling its fiduciary duties, exercising prudent oversight over risk management, financial reporting, and compliance matters. The establishment of specialized committees, such as the Audit Committee, Risk

Management Committee, and Nomination and Remuneration Committee, further strengthens the governance framework, ensuring focused attention on key areas of responsibility.

We take pride in the independence and diversity of our Board, with a sufficient number of independent directors contributing invaluable insights and perspectives. Their diligent oversight, coupled with transparent disclosures, safeguards against potential conflicts of interest and reinforces stakeholder trust.

Looking ahead, the Board remains committed to driving the Company's strategic vision, fostering innovation, and enhancing long-term shareholder value. As stewards of corporate governance, we are steadfast in our dedication to upholding the principles of transparency, accountability, and ethical conduct, ensuring the continued success and sustainability of the company.

COMPOSITION

The composition of the Board of Directors at PHF embodies a harmonious blend of expertise, experience, and diversity, ensuring robust governance and strategic oversight. Our Board comprises eminent individuals, each bringing a unique perspective and skill set to the table, collectively guiding the Company towards its objectives with diligence and integrity.

Diversity is a cornerstone of our Board's composition, reflecting a spectrum of backgrounds, talents, and industry insights. This diversity fosters innovation, enhances decision-making, and strengthens our ability to adapt to evolving market dynamics.

Furthermore, the Board's composition is meticulously structured to align with regulatory requirements and best corporate governance practices. Through a balanced mix of executive, non-executive, and independent directors, we ensure a comprehensive approach to oversight, accountability, and risk management.

The expertise of our directors spans a wide array of disciplines, including finance, technology, legal, operations, and beyond. This collective wealth of knowledge enables the Board to provide informed guidance on critical matters such as strategic planning, risk assessment, and stakeholder engagement.

At PHF, we recognize the pivotal role that effective board composition plays in driving sustainable growth and shareholder value. As such, we remain committed to maintaining a dynamic and inclusive Board, characterized by transparency, integrity, and a relentless pursuit of excellence.

Woman Director

In compliance with the provisions of the Companies Act, 2013 (the "Act"), the Board of your Company has an optimum combination of Executive, Non-Executive and Independent Directors with a Woman Director on the Board. Your Company has Ms. Aditi Kapur, as Woman Director on the Board.

The Board of Directors as on March 31, 2024 are given herein below:

*Mr. Yaduvendra Mathur ceased to be a Director of the Company w.e.f. May 4, 2024 due to sudden demise.

21.2 Appointment/ Re-appointment/ Cessation of Directors

During the year 2023-24, following changes took place in the composition of Board of Directors of your Company:

i. Appointment and Cessation of Directors

During the financial year 2023-24, the following Directors were appointed.

- The Board approved the appointment of Mr. Kumar Shalya Gupta as an Additional Director (DIN: 07553217) on the Company's Board, with effect from April 18, 2023, until the conclusion of the upcoming Annual General Meeting upon the Nomination and Remuneration Committee's recommendation.

-Mr. Kumar Shalya Gupta (DIN: 07553217) was appointed as the Managing Director of the Company upon the recommendation of the Nomination and Remuneration Committee, and subject to approval at the general meeting along with any necessary consents or permissions with effect from April 18, 2023 for a consecutive term of 5 years, in accordance with the terms, conditions, and remuneration recommended by the Nomination and Remuneration Committee. - Mr. Kumar Shalya Gupta (DIN : 07553217) tendered his resignation from the office of Director of the Company with effect from 28th August 2023.

ii. Re-appointment of Director

During the F.Y. 2023-24, Mr. Meghal Gupta (09179500) was re-appointed as Director in the Annual General Meeting held on July 14, 2023, who was liable to retire by rotation.

V. Retire by Rotation

Pursuant to Section 152 of the Act read with the Articles of Association of the Company, Mr. Chandan Chugh (DIN: _01519390is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment as the Director of the Company.

Key Managerial Personnel

The Board approved the appointment of Mr. Kumar Shalya Gupta as a Chief Executive Officer of the Company, effective from April 18, 2023 upon the recommendation of the Nomination and Remuneration

Committee.

21.3 BOARD MEETINGS AND PROCEDURES

The Notes on Agenda setting out the business to be transacted at the Board Meetings, were sent to each Director pursuant to the applicable provisions of the Companies Act, 2013, Secretarial Standards issued by ICSI and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 before the date of the Board Meeting.

During the financial year 2023-24, 10 (Ten) meetings of the Board of Directors were held i.e. on April 18, 2023, May 13, 2023, June 27, 2023, August 11, 2023, August 28, 2023, September 19, 2023, September 30, 2023, November 14, 2023, February 13, 2024, and February, 20, 2024. The maximum gap between any two meetings was not more than one hundred and twenty days. The necessary quorum was present for all the meetings.

MINUTES OF BOARD/COMMITTEE MEETINGS

Minutes of proceedings of each Board and Committee meetings are recorded and draft minutes are circulated to Board/Committee members for their comments and/or confirmation within 15 days from the date of the meeting. The inputs, if any, of the Board & Committee Members are duly incorporated in the minutes after which these are entered in the minute's book within 30 days from the date of meeting.

ATTENDANCE OF DIRECTORS IN BOARD MEETINGS

The names and categories of Directors, their attendance at Board Meetings held during the financial year under review and at the last Annual General Meeting (AGM), and names of listed entities where person is a director are as follows:

Notes:

Basis the disclosures received from the Directors, none of the Directors holds office as a director, including alternate director, in more than twenty companies at the same time. None of them has directorships in more than ten public companies. For reckoning the limit of public companies, directorships of private companies that are either holding or subsidiary company of a public company are included.

The Memberships and Chairmanships of Directors in Committees do not include their Memberships and Chairmanships in the Company.

Only Audit Committee and Stakeholders' Relationship Committee are considered for the purpose of reckoning committee positions.

As per declarations received, none of the directors serves as an independent director in more than seven (7) listed companies. Further, the Independent Directors have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification ofDirectors) Rules, 2014.

Key Managerial Personnel

Pursuant to the provisions of section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following were the KMPs of the Company as on March 31, 2024.

MEETING OF INDEPENDENT DIRECTORS

A Separate Meeting of Independent Directors was held on 28th March, 2024 without the presence of Non-Independent Directors and members of management. All the Independent Directors attended the meeting and:

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

(ii) reviewed the performance of the Chairman of the company, taking into account the views of Executive Directors and Non-Executive Directors;

(iii) assessed the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Confirmation/ Statement/ Declaration by Independent Director

Pursuant to the provisions of Section 149(6) of the Companies Act, 2013, the independent directorshave submitted declarations that each of them meets the eligibility criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b)of the SEBI Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Boardis satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Companies Act, 2013 and applicable rules thereunder) of all Independent Directors on the Board.

Pursuant to Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have registered themselves in the data bank of Independent Directors maintained with theIndian Institute of Corporate Affairs.

22. FAMILIARISATION PROGRAMME

Pursuant to Regulation 25(7) of the Listing Regulations, the Company has put in place a system to familiarize its Independent Directors about the Company, its financial products, the industry and business model of the Company. In addition, the Company also updates on continuous basis to the Independent Directors about the ongoing events and developments relating to the Company, significant changes in regulatory environment through the Board/Committee meetings and separate familiarization programme(s). During the Financial Year 2023-2024, the Company had conducted 1 programme / meeting and the time spent by Independent Directors was in the range of 1-2 hours. Thecumulative programmes / meetings conducted till date were 6 and the time spent by Independent Directors was in the range of 1-2 hours. Pursuant to Regulation 46 of Listing Regulations the details of Familiarization Programme is uploaded on the Company's website at the web link: https://www.phfleasing.com/uploads/familirisation-programme.pdf

23. CODE FOR PREVENTION OF INSIDER- TRADING PRACTICES

As per the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company Secretary is the Compliance Officer and is responsible for setting forth policies, procedures, monitoring adherence to the rules for the preservation of price-sensitive information, pre-clearance of trade, monitoring of trades and implementation of the Code of Conduct for trading in Company's securities under the overall supervision of the Board. The Company has in place Board approved Code of Conduct to regulate, monitor and report trading by Designated Persons as well as a Code of Fair Disclosure in accordance with aforesaid Regulations. All the Directors on the Board and Management Team and other employees who could be privy to unpublished price-sensitive information of the Company are governed by this Code.

24. STATUTORY COMMITTEES

The Company has Statutory Committees, which have been constituted and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company currently has below-stated statutory committees: i) Audit Committee ii) Nomination and Remuneration Committee iii) Stakeholders' Relationship Committee iv) Risk Management Committee

v) Asset Liability Management Committee

AUDIT COMMITTEE

The Audit Committee reviews the financial accounting policies, adequacy of internal control systems and systems audit and interacts with the statutory auditors, internal auditors and systems auditors. Senior Executives and functional heads are invitees to the committee meetings. Besides, the Committee inter alia reviews the audit plans, interim and annual financial results, management discussion and analysis of financial condition and results of operations, related party transactions, observations of the management and internal / external auditors on internal control and follow up reports of the management.

The Audit Committee met four times viz May 13, 2023, August 11, 2023, November 14, 2023 and February 12, 2024 during the year under review and the number of meetings attended by each member during the year ended March 31, 2024 is as follows:

TERMS OF REFERENCE OF AUDIT COMMITTEE:

The terms of reference of this Committee are wide. Besides having access to all the required information from within the Company, the Committee acts as a link between the Statutory and Internal Auditors and the Board of Directors of the Company. The brief descriptions of terms of references are as follows:

? Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient andcredible; ? Recommend appointment, remuneration and terms of appointment of auditors of the Company; ? Approval of payment to statutory auditors, including cost auditors (if any), for anyother services rendered by them; ? Review with the management, the annual financial statements and auditor's report thereon before submission to the Board for its approval,

? Review with the management, the quarterly financial statements before submissionto the Board for approval; ? Review and monitor the auditor's independence and performance, and effectivenessof audit process; ? Approval or any subsequent modification of transactions with related parties of theCompany; ? Scrutiny of inter-corporate loans and investments; ? Valuation of undertakings or assets of the Company, wherever it is necessary; ? Evaluation of internal financial controls and risk management systems; ? Review the functioning of the Whistle Blower mechanism / oversee the vigil mechanism; ? Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control; ? systems of a material nature and reporting the matter to the Board; ? Discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern; ? monitoring the end use of funds raised through public offers and related matters; ? Carry out any other function as is mandated by the Board from time to time and / orenforced by any statutory notification, amendment or modification as may be applicable.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination & Remuneration Committee formulated criteria for evaluation of the Board and Executive and Non-Executive Directors for the purpose of review of their performance at a separate meeting of the Independent Directors. Further, the Committee has recommended a policy relating to the remuneration of the directors, key managerial personnel, seniormanagement and other employees, which, inter alia, includes the principles for identification of persons who are qualified to become directors.

The Nomination and Remuneration Committee met five times viz. April 13, 2023, September 19, 2023, September 29,2023, February 12,2024 and March 29,2024 during the year under review and the number of meetings attended by each member during the year ended March 31, 2024 is as follows:

TERMS OF REFERENCE OF NOMINATION AND REMUNERATION COMMITTEE (NRC):

The terms of reference of the NRC, inter alia includes:

1. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees after ensuring that-

the level and composition of remuneration is reasonable and sufficient to attract, retain and motivateDirectors of the quality required to run the Company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriateto the working of the Company and its goals.

(1A) For every appointment of an Independent Director, the Nomination and Remuneration Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommends to the Board for appointment as an Independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the committee may:

a. use the services of external agencies, if required b. consider candidates from a wide range of backgrounds, having due regard to diversity; and c. consider the time commitments of the candidates.

2. To identify persons who are qualified to become Directors and recommend the reappointment of Directors if they are qualified and fit to be reappointed. Also, to identify and recommend who may be appointed in Senior Management in accordance with the criteria laid down by the Committee andrecommend to the Board their appointment and removal

3. To formulate the criteria for evaluation of performance of Independent Directors and the Board ofDirectors.

4. To determine whether to extend or continue the term of appointment of the Independent Director,on the basis of the report of performance evaluation of Independent Directors.

5. To devise a policy on Board diversity.

6. Recommend to the board, all remuneration, in whatever form, payable to senior management

7. Formulation of Succession policy for Managing Director and CFO, Key Managerial Personnel and Senior Management Personnel.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee i) approves and monitors transfers, transmission, splits and consolidation of securities of the Company,

ii) reviews and resolves the grievances of security holders / depositors / debenture holders of the Company including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, non-receipt of interest on deposits/debentures, issue of new/duplicate certificates, general meetings etc., and

iii) reviews the compliances with various statutory and regulatory requirements.

The Stakeholders Relationship Committee met 2 (Two) times viz. October 28, 2023 and March 28, 2024 during the year under review and the number of meetings attended by each member duringthe year ended March 31, 2024 is as follows

The Stakeholders Relationship Committee comprises as follows:

Terms of Reference

The terms of reference of the Stakeholders Relationship Committee as approved by the Board of Directors includes the following:

- Oversee and review all matters connected with transfer of Company's securities;

- Oversee the performance of the Company's Registrars and Transfer Agents;

- Consider, resolve and monitor various aspects of interest of shareholders, debenture holders and other security holders including the redressal of investors' / shareholders' / security holders' grievances related to transfer / transmission of securities, non-receipt ofannual reports, non-receipt of declared dividend, issue new / duplicate certificates, generalmeetings and so on.

- Review measures taken for effective exercise of voting rights by shareholders;

- Review adherence to the service standards adopted by the Company in respect of variousservices being rendered by the Registrar & Share Transfer Agent and recommend methodsto upgrade the service standards adopted by the Company;

- To look into matters that can facilitate better security-holder's services and relations;

- Review of various measures and initiatives taken by the company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the company.

The Committee meets as and when required to deal with the matters relating to monitoring and redressal of complaints from Shareholders relating to transfer, non -receipt of Annual Report, etc. Noinvestor complaint was received during the year under review.

THE COMPLAINT STATUS DURING PREVIOUS YEAR IS AS FOLLOWS:

RISK MANAGEMENT COMMITTEE

The terms of reference of the Risk Management Committee are as follows:

a. To formulate a detailed risk management policy which shall include:

? A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information technology including business continuity plan, cyber security risks, market risk or any other risk as may be determined by the Committee. ? Measures for risk mitigation including systems and processes for internal control of identified risks. b. To ensure that appropriate methodology, processes and systems are in placeto monitor and evaluate risks associated with the business of the Company; c. To monitor and oversee the implementation of the risk management policy,including evaluating the adequacy of risk management systems; d. To periodically/annually review the risk management policy, including by considering the changing industry dynamics and evolving complexity; e. To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken; f. The Risk Management Committee shall coordinate its activities with other Committees, in instances where there is any overlap with activities of suchCommittees, as per the framework laid down by the board of directors. g. The appointment , removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review by the Risk Management Committee.

During the year under review, the Committee met 4 (Four) times on April 19, 2023, July 17, 2023, October 28, 2023 and March 30, 2024. The necessary quorum was present for all the meetings.

The Risk Management Committee Composition is as follows:

ASSET LIABILITY MANAGEMENT COMMITTEE

Pursuant to the guidelines issued by the Reserve Bank of India (RBI) on Asset Liability Management (ALM) System for NBFCs, your Company has a duly constituted an Asset Liability Management Committee (ALCO) to check the asset liability mismatches, interest risk exposure and to help the Company to improve the overall system for effective risk management in various portfolios held bythe Company.

The Asset Liability Management Committee met four times in the year under review on April 19, 2023, July 17, 2023, October 28, 2023 and March 28, 2024. During the year under review and thenumber of meetings attended by each member during the year ended March 31, 2024 is as follows:

25. POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Pursuant to the provisions of Section 178(3) of the Companies Act, 2013 ("the Act"), the Board of Directors has approved and adopted the Nomination & Remuneration Policy as recommended by the Nomination and remuneration Committee, inter alia, for the appointment and fixation of remuneration of the directors, key managerial personnel and other senior employees of your Company as applicable. The Nomination and Remuneration Committee has also developed the criteria for determining the qualifications, positive attributes and independence of Directors.

The Nomination and Remuneration Policy of the Company as required under Section 178(3) of the Act is available on our website i.e. https://www.phfleasing.com/

The salient features of the Nomination and Remuneration Policy of the Company are mentioned hereunder: -

?To support the organization's strategy by helping to build a competitive, high performance and innovative company with

? an entrepreneurial culture that attracts, retains, motivates and rewards high-performing employees;

? To promote the achievement of strategic objectives within the company's risk appetite;

? To promote / support positive outcomes across the economic and social context in which the company operates; and

- To promote an ethical culture and responsible corporate citizenship

26 . CRITERIA FOR PERFORMANCE EVALUATION OF BOARD, IT'S COMMITTEES AND

OF INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and Rules made thereunder as amended from time to time, the Board has carried out an annual performance evaluation of its own performance, evaluation of the working of its Committees as well as performance of all the Directors individually (including Independent Directors). The Board of Directors was assisted by the Nomination and Remuneration Committee. Feedback was sought from Directors on various parameters, including feedback of the Independent Directors on their review of the performance of Non-Independent Directors and the Board as a whole and on the performance of the Chairman of the Company and seeking inputs from members of the Committees, as the case may be, inter-alia, degree of fulfilment of key responsibilities towards stakeholders, quality of relationship between Board Members and the Management, adequacy of the composition of the Board and its Committees, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, etc.

Performance evaluation framework of the Company is as follows:

a. Nomination and Remuneration Committee would approve framework of performance evaluationof the Company and review the performance of the individual directors and the Board as a whole; b. Board would evaluate the performance of the Independent Directors, Board as a whole andCommittees of the Board;

c. Independent Directors would evaluate the performance of the Chairman of the

Company aftertaking views of other directors, Board as a whole and Non-Independent Directors;

d. Self-evaluation of individual Directors;

27. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

As per the provisions of Section 177(9) of the Act, the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns. The Company as part ofthe ‘vigil mechanism' has in place a Board approved ‘Whistle Blower Policy' to deal with instancesof fraud and mismanagement, actual or suspected fraud or violation of the Company's Code of Conduct, if any. The Whistle Blower Policy has been placed on the website of the Company and thesame can be accessed at https://www.phfleasing.com/wp-content/uploads/2022/12/Whistle-Blower-Policy.pdf

The Company reviewed Whistle Blower Policy and established the necessary vigil mechanism for Directors and Employees to report concerns about unethical behavior. The mechanism provides for adequate safeguards against victimisation. Further, no person has been denied access to the Audit Committee. Adequate safeguards are provided against victimisation of those who avail the mechanism, besides allowing direct access to the Chairperson of the Audit Committee.

Email: phf_leasinglimited@yahoo.co.in

The confidentiality of those reporting violations is maintained and are not subjected to any discriminatory practice. During the year under review, no complaints were received by the Company.

28. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

Risk Management is at the core of our business and ensuring we have the right risk-return trade-off in line with our risk appetite is the essence of our Risk Management practices while looking to optimize the returns that go with that risk.

Your Company is exposed to risks that are particular to its environment within which it operates. The Company has identified and implemented comprehensive policies and procedures to assess, monitor and manage risk throughout your Company. An extensive Risk Management Policy is put in place in the organization briefing the risks and ways to mitigation and elimination of the same including:

a. A framework for identification of internal and external risks faced by the entity including financial, operational, sectoral, sustainability, information, cyber security risks or any other risk as may be determined by the Committee;

b. Measures for Risk Mitigation including systems and processes for internal control of identified risks;

c. Business Continuity Plan;

29.1 Human Resources

The Company has given a detailed note under Management Discussion and Analysis Report.

The Company had 495 permanent employees on its rolls as on March 31, 2024

29.2 Particulars of Employees and Related Disclosures

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Act, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The statement of disclosure of remuneration under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure-A and forms part of this report.

29.3 Disclosure under the Sexual Harassment of Women at Workplace (Prevention,Prohibition and Redressal) Act, 2013

Your Company has in place an appropriate policy which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The said policy is uploaded on the website of the company. The link for the policy is: https://www.phfleasing.com/uploads/policies/posh-policy.pdf. The Internal Complaints Committee has been set up to redress complaints, if any, received regarding sexual harassment on quarterly basis. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the financial year 2023-24, information pertaining to Sexual Harassment was received by the Committee is under:-

a. Number of complaints filed during the financial year: Nil

b. Number of complaints disposed of during the financial year: Nil

c. Number of complaints pending as on end of the financial year: Nil

We confirm that the Company has complied with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2023-24, no complaint pertaining to Sexual Harassment was received by the Committee.

30 . DISCLOSURE IN RESPECT OF VOTING RIGHTS NOT EXERCISED DIRECTLY BY

THE EMPLOYEES

Pursuant to Section 67(3) of the Act read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014, the Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees, thus, the disclosure is not required to be given in the Report.

31 . 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

No such application has been made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.

32. 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 Company has not engaged in any one-time settlement agreements with banks or financial institutions during the reporting period. As a result, there is no requirement for the Company to provide disclosure regarding such settlements.

33.1 Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

33.2 Significant and material orders passed by regulators or courts or tribunals impacting the going concern status and operations of the Company

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future.

33.3 Disclosure pertaining to Consolidated Financial Accounts under section 129(3) of the Companies Act, 2013

The Company has no subsidiary or associate companies, thus, the provisions of Section 129(3) of the Companies Act, 2013 are not applicable to the Company.

33.4 Change in the nature of business

There was no change in the nature of business of the Company in the financial year ended on March 31, 2024. The Company is determined to work efficiently for its growth.

33.5 Issue of equity shares with differential rights, sweat equity, ESOP etc.

The Company has not issued any equity shares with differential rights, Sweat Equity, ESOP etc. during the financial year ended on March 31,2024.

33.6 Unclaimed Dividend and shares transferred to Investor Education and Protection Fund Authority ("IEPF")

In accordance with the provisions of Sections 124 and 125 of the Companies Act, 2013 and Investor

Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividends which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the company to the Investor Education and Protection Fund ("IEPF"). Accordingly, the Company has duly transferred the unpaid or unclaimed dividend to the Investor Education and Protection Fund ("IEPF") that was declared upto the Financial Year 2014-2015 and as on date, no unpaid or unclaimed dividend is outstanding to be transferred to IEPF.

The IEPF Rules mandate companies to transfer all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more in the name of IEPF. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/dividend from the IEPF Authority following the procedure prescribed in the Rules.

Pursuant to the provisions of section 124(5) of the Companies Act, 2013, there are no amounts due and outstanding to be credited to the Investor Education and Protection Fund established under Section 125 of the Companies Act, 2013, which remains unpaid/unclaimed for a period of 7 years from the date of transfer to the unpaid dividend account.

33.7 Other Disclosures

a) DETAILS OF COMPLIANCE WITH MANDATORY REQUIREMENTS AND ADOPTION OF NON- MANDATORY REQUIREMENTS

The Company has complied with all the mandatory requirements of the Listing Regulations. Further, the Company has not adopted any non-mandatory requirements.

b) WEB LINK WHERE POLICY FOR DETERMINING ‘MATERIAL' SUBSIDIARIES IS DISCLOSED

The Company does not have any material listed/ unlisted subsidiary companies as defined inRegulation 24 (1) of Listing Regulations. However, the Company has framed the Policy on Material Subsidiaries and the same is uploaded on the Company's website at the web link https://www.phfleasing.com/policy-for-determining-material-subsidiaries/

c) WEB LINK WHERE POLICY ON DEALING WITH RELATED PARTY TRANSACTIONS

The Policy on dealing with related party transactions can be accessed at https://www.phfleasing.com/

34. ADDRESS FOR INVESTOR'S CORRESPONDENCE

For any assistance regarding share transfers, transmissions, change of address, non- receipt of dividend or any address, non- receipt of dividend or any other query relating to shares, please write to:

Ms. Shikha Kapoor, Company Secretary PHF LEASING LIMITED

Regd. & Corp. Office: 87, Radio Colony, Jalandhar-144001, Punjab, INDIA, Ph: +91 91151-00401; Email: shikha@phfleasing.com

35. COMPLIANCE WITH REGULATION 34(3) AND PART F OF SCHEDULE V OF THE LISTING REGULATIONS

In accordance with the provisions of Regulation 34 (3) and Part F of Schedule V of the Listing Regulations, the Company will report the details in respect of the unclaimed Equity Shares as and when required and credited to demat suspense account opened by your Company.

36. DISCLOSURES PURSUANT TO RBI MASTER DIRECTIONS

Your Company has complied with all the applicable provisions and has made adequate disclosures pursuant to Master Directions for Non -Banking Financial Company Non-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, as amended and Master Direction Reserve Bank of India (Non-Banking Financial Company Scale Based Regulation) Directions, 2023, as applicable.

37. VOLUNTARY REVISION

The Company has duly complied with all the provisions of Sections 129 and 134 of the Act, therefore, no voluntary revision of financial statements and Director's Board Report was done by the Company during the Financial Year.

38.1 Customer Service

We strive to create a culture of ‘Customer Obsession' by always listening to customers and driving continuous transformation to provide a frictionless experience across the lifecycle, from pre- disbursal to closure of a loan. We always aim to reduce the time to disburse loans with minimal documentation. And we have enhanced and introduced varied communication and service channels to keep our customers informed and instantly address their queries and requests.

38.2 Fair Practices Code

Your Company adhere to a Fair Practices Code (FPC), issued by the Reserve Bank of India, which is applicable for all Non -Banking Financial Companies. These guidelines, inter alia, covers disclosures on the terms and conditions of a loan and mentions adoption of a non-coercive recovery method. As part of the FPC, we also have a Grievances Redressal Mechanism and a Whistle Blower Policy/Vigil Mechanism. While Grievances Redressal Mechanism is aimed at ensuring excellent customer service, Whistle Blower Policy/Vigil Mechanism gives liberty to our employees to raise concerns regarding any violations of the values and Code of Conduct. With respect to this, there were no code of conduct violations reported during FY 2023-24.

Further, the Company is also complying with the KYC Procedures as a tool to Risk Management. Fair Practice code has also been displayed on web site of the company in English and Vernacular Language at the website of the Company which can be accessed at https://www.phfleasing.com/fair-practices-code-policy/

38.3 Customer Grievance Redressal

The Company has adopted a well-structured customer grievance redressal mechanism and provides customers a reliable and easily accessible interface for timely and fair resolution of enquires and complaints. The policy aims to minimize the instances of customer complaints through proper service delivery and review mechanism.

Grievance Redressal at Branch Level - We have placed suggestion cum complaint boxes in all our branches as the customers' first point of contact for any query resolution. Due to low literacy and vulnerable backgrounds, our customers find it convenient talking to someone face-to-face rather than calling a remote helpdesk, hence we have given importance to placement of suggestion cum complaint boxes in all our branches.

Grievance Redressal Officer - We have appointed Grievance Redressal Officer (GRO), at the head office of the Company located in Jalandhar. GRO monitors customer grievances at all the levels and is responsible for ensuring timely resolution of all complaints through Customer Care Representatives and Help Desks. A report on status of customer grievances is periodically reviewed at various levels of Management and the Board for decision making and minimizing complaints.

Our efforts at customer education during the years have paid off with an increasing number of customers approaching our grievance redressal channels for their queries.

38.4 Resolution of Grievances

The Grievance Redressal Officer (GRO) appointed by the Company ensures closure of all the complaints to the customer's satisfaction. It is ensured that the complaint is escalated to the appropriate levels on a timely basis. Whilst the ultimate endeavour is to ensure to reach a situation where our customers don't have to complain to senior management to get an effective redressal, a robust mechanism is being put in place to handle these complaints, review them from a point of view of understanding reasons for the complaint and for the escalation and working on prevention of recurrence thereof.

38.5 Staff and Customer Education on Code of Conduct and Grievance Redressal Mechanism

As the maximum customer base of the Company is in rural areas, the Company has in place the mechanism that directly links customers to the Company, in consideration to the educational, social and economic background of the customers. To the fact, such customers are usually prone to get tricked being misinformed and mis-communicated.

Our Company has a Board approved Customer Grievance Redressal Mechanism for expeditious redressal of customer grievances to resolve the queries of the customers efficiently and effectively.

Fair Practice Code and Policy on Code of Conduct has been displayed in vernacular language at all the branch premises.

39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company's business in India, risk management systems and other material developments during the year under review. The same has been enclosed in the Annual Report.

40. CODE OF CONDUCT

The Company periodically reviews the ‘Code of Conduct' (COC) of the Company as per the needs for the best interest of the Company. The assessment and compliance is being conducted by proficient Principal Officer of the Company as an Further, the Code of Conduct of the Company applicable to the Board and Senior Management Personnel is also uploaded on the Company's website at the web link http://www.phfleasing.com/coc.html.

41. NON-PERFORMING ASSETS

Your Company has made provisions for NPAs as per guidelines of RBI. The company is making earnest efforts through continuous appraisal, timely recovery and sound policy of write-offs for reducing and controlling the NPAs. A translucent and rational recovery policy has been framed to ensure that there is no let-up in the recovery and upgradation of the over dues. As on March 31, 2024, your Company has a provision of INR 105.95 Lacs as per the norms prescribed by RBI.

42. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Act:

a. that in the preparation of annual accounts for the financial year ended on March 31,2024, the applicable accounting standards have been followed and there are no material departures; b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the statement of profit and loss of the Company for the financial year ended on March 31, 2024;

c. that the proper and sufficient care has been taken 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 frauds and other irregularities;

d. that the annual accounts of the financial year ended on March 31, 2024 have been prepared on a going concern basis

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

f. that 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.

43. ACKNOWLEDGEMENT

The Directors express their sincere gratitude to RBI, Securities and Exchange Board of India, Metropolitan Stock Exchange of India (MSEI), Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions, and the Company's bankers for the ongoing support extended by them. The Directors also place on record their sincere appreciation for the continued support extended by the Company's stakeholders and trust reposed by them in the Company. The Directors sincerely appreciate the commitment displayed by the employees of the Company across all levels, for exhibiting outstanding performance during such challenging times.