TruCap Finance Ltd

Dear Members,

TruCap Finance Limited

(formerly Dhanvarsha Finvest Limited)

Mumbai

Your directors are pleased to present the 30^th Annual Report along with the Audited Standalone and Consolidated Financial Statements of TruCap Finance Limited ("Company") for the financial year ended March 31, 2024 ("Report").

The equity shares of your Company are listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). The Company is registered with the Reserve Bank of India ("RBI") as a Non-Deposit accepting Non-Banking Financial Company ("NBFC"). Further, as per the Master Direction-Reserve Bank of India (NonBanking Financial Company - Scale Based Regulation) Directions, 2023, dated October 19, 2023, as amended, issued by RBI ("Master Direction"), based on the asset size, as on March 31, 2024, the Company falls under the

Base Layer and accordingly is required to comply with the regulations as are applicable for NBFC-Base Layer.

Pursuant to the applicable provisions of the Companies Act, 2013 read with applicable circulars (including any statutory modification(s) or re-enactment(s) thereof, for time being in force) ("Act") and the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations"), Master Direction, and other applicable circular(s)/notification(s) issued by RBI, this Report covers the financial statements and other developments in respect of the Company, during the financial year ended March 31, 2024 and up to the date of the Board Meeting held on August 13, 2024, approving this Report.

Financial Highlights

A summary of the financial performance of the Company, on standalone and consolidated basis, for the financial year 202324 as compared to the previous financial year 2022-23 is given below:

(R in Lakhs)

Note: Previous period's figures have been regrouped/rearranged wherever necessary.

The financial statements are prepared in accordance with the Act read with Schedule III of the Act and in accordance with the Indian Accounting Standards and relevant provisions of the Listing Regulations and Master Direction for the financial year ended March 31, 2024, and forms part of this Annual Report and are also available on the website of the Company i.e., www.trucapfinance.com.

Review of Business Operations and State of Affairs of the Company

During the year under review, the Company's total income, on a consolidated basis, amounted to Rs. 18,284.39 Lakhs compared to Rs. 12,380.47 Lakhs in the previous year and total income, on a standalone basis, amounted to Rs. 18,200.54 Lakhs compared to Rs. 12,395.87 Lakhs in the previous year. Profit before tax on a consolidated basis stood at Rs. 1,142.32 Lakhs compared to Rs. 246.55 Lakhs in the previous year and profit after tax on consolidated basis stood at Rs. 1,096.31 Lakhs compared to Rs. 63.14 Lakhs in the previous year.

The net interest margin compressed during the financial year ended March 31, 2024. This compression came largely from the liability side. With the RBI having raised rates by 250 basis points during the financial year ended March 31, 2023, most of the lenders have started passing on rate hikes to the Company since June and July 2022 which resulted in an increase in the finance cost of the Company. Further, there has been an increase in the operating expenses from Rs. 6,590 Lakhs in the financial year ended March 31, 2023 to Rs. 9,110 Lakhs during the financial year ended March 31, 2024, which was largely due to expediting and building the branch network.

The loan assets under management (AUM) grew 77.47% year-on-year to Rs. 1,03,110 Lakhs as compared to Rs. 58,100 Lakhs in the previous year (including Off-Balance Sheet AUM).

Listing of Shares of the Company

During the year under review, in addition to being listed on BSE, the equity shares of the Company have also been listed on NSE with effect from June 20, 2023.

Change in Nature of Business

The Master Direction issued by the RBI enables a NonBanking Financial Company to undertake insurance business as a corporate agent without prior approval of the RBI, subject to it receiving an approval from the Insurance Regulatory and Development Authority of India ("IRDAI"). Further, IRDAI has amended the corporate agency guidelines to enable corporate agents to work with more insurers and thereby offer greater product solutions and options to its customers. Foreseeing the benefits of acting as a corporate agent for the insurance companies by cross-selling the insurance products to its borrowers, during the year under review, the Shareholders of the Company have, on recommendation of the Board of Directors, at the Extra Ordinary General Meeting of the Company held on May 22, 2024, approved amendment in the main objects of the Memorandum of Association of the Company by incorporating object clause with respect to undertaking the business of Corporate Agency (Composite) and distributing products of life insurance, health insurance & general insurance, subject to regulatory approvals. The Company will continue to carry out its main business as a non-banking financial company registered with the RBI.

Co-Lending and Business Correspondent model

In order to provide greater operational flexibility to banks and NBFCs for reaching out to priority sector, a revised scheme, renamed as co-lending model (CLM) was introduced by the RBI effective November 05, 2020. The primary focus of the co-lending scheme is to improve the flow of credit to the unserved and underserved sectors of the economy and make available funds to the ultimate beneficiary at an affordable cost, considering the comparative advantage of lower cost of funds of banks and greater reach of NBFCs. Taking benefit of banks' low-cost funding and leveraging the extensive reach and presence of the Company in the northern and western geographies of India, as on March 31, 2024, the Company has entered into strategic alliances with 5 leading public and private sector banks and 7 financial institutions for Co-Lending and Business Correspondent arrangements. During the year under review, the overall AUM through co-lending model stood at Rs. 22,790 Lakhs including loan against collateral of Gold which was 38.12% of the total AUM as on March 31, 2024.

Transfer to Statutory Reserve

In compliance with Section 45-IC (1) of Reserve Bank of India Act, 1934, the Company, has transferred a sum of Rs. 232.78 Lakhs to the Statutory Reserve Fund for the financial year ended March 31, 2024.

Credit Rating

The details of ratings assigned by credit rating agencies and migration of ratings during the year ended March 31, 2024, and as on the date of this Report, are as follows:

Dividend on Equity Shares

Pursuant to the provisions of Regulation 43A of the Listing Regulations and circular issued by RBI on declaration of dividends by NBFCs on June 24, 2021, as amended, the Company has formulated and adopted a Dividend Distribution Policy approved by the Board of Directors of the Company ("Policy").

The Directors recommend, for consideration and approval of the Members at the ensuing Annual General Meeting ("AGM"), for payment of a dividend of Rs. 0.01/- per equity share i.e., 0.5% of face value of Rs. 2/- each. The total dividend for the financial year 2023-24 is Rs. 11.69 Lakhs to be paid out of the profits of the Company vis-a-vis Rs. 11.62 Lakhs paid for the financial year ended 2022-23.

The dividend recommended is in accordance with the principles and criteria set out in the Policy. The Finance Act, 2020, has abolished the Dividend Distribution Tax and has introduced the system of dividend taxation in the hands of the shareholders with effect from April 01, 2020. Accordingly, the Company would be required to deduct Tax at Source in respect of payment of dividend, if declared, to its shareholders (resident as well as non-resident).

The Policy is annexed as Annexure - I to this Report and the same is also available on the website of the Company i.e., www.trucapfinance.com and link is https://trucapfinance. com/wp-content/uploads/Dividend-Distribution-Policy- Final.pdf.

Debentures

During the year under review and till the date of this Report, the Company has allotted 15,949 Listed Non-Convertible Debentures having face value of Rs. 1,00,000/- each total

aggregating to Rs. 15,949 Lakhs ("Listed NCDs") on private placement basis and the same are listed on BSE. Further, during the year under review, the Company has allotted 35 unlisted Non-Convertible Debentures ("Unlisted NCDs") of the Company amounting to Rs. 3,500 Lakhs.

Further, the Company has allotted 500 secured, United States Dollar denominated bonds of face value of USD 10,000 (United States Dollar Ten Thousand only) each, aggregating up to USD 5,000,000 (United States Dollar Five Million only) (hereinafter referred to as "Bonds") on a private placement basis on June 27, 2024. The Bonds are listed on global securities market platform of India International Exchange (India INX).

During the year under review, the Company has made timely payment of its interest and redemption of principal obligations pertaining to Listed NCDs and Unlisted NCDs respectively.

The details of the Debenture Trustee of the Company for the aforesaid outstanding Unlisted NCDs, Listed NCDs and Bonds are as under:

Catalyst Trusteeship Limited

GDA House, 1^st Floor,

Plot No. 85, S. No. 94 & 95,

Bhusari Colony (Right), Kothrud, Pune - 411 038.

Website: https://catalysttrustee.com/

Share Capital of the Company

During the financial year 2023-24, the total paid up equity share capital of the Company increased from Rs. 23,24,29,432/- divided into 11,62,14,716 equity shares having face value of Rs. 2/- each to Rs. 23,37,98,742/- divided into 11,68,99,371 equity shares having face value of Rs. 2/- each .

The movement of equity share capital during the financial year ended March 31, 2024, till the date of this Report is as under:

Further, during the year under review, 27,74,706 convertible warrants allotted to non-promoter category on May 09, 2022, were not exercised within 18 months from the date of allotment of such warrants. Accordingly, the right to exercise conversion of the warrants into equity shares was lapsed and the upfront consideration amounting to Rs. 9,15,65,298/- (Rupees Nine Crores Fifteen Lakhs Sixty-Five Thousand Two Hundred and Ninety-Eight only) received was forfeited by the Company in compliance with Regulation 169(3) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("ICDR Regulations").

Furthermore, upon receipt of approval of the Shareholders of the Company at the Extra Ordinary General meeting(s) held on December 08, 2023 and May 22, 2024 respectively and approval(s) received from the respective stock exchange(s), the Finance Committee constituted by the Board of Directors of the Company have approved the below allotment of convertible warrants to non-promoter category on preferential basis:

a. 65,42,372 convertible warrants having face value of Rs. 2/- each at issue price of Rs. 73.75/- each for aggregate consideration of Rs. 48,24,99,935/- (Rupees Forty-Eight Crores Twenty-Four Lakhs Ninety-Nine Thousand Nine Hundred and Thirty-Five only) allotted on February 01, 2024, convertible into equivalent number of equity shares of the Company within 18 months from the date of allotment of such warrants. These convertible warrants have been allotted against receipt of the subscription price equivalent to 25% of the issue price i.e. Rs. 12,06,24,984/- (Rupees Twelve Crores Six Lakhs Twenty-Four Thousand Nine Hundred and Eighty-Four only) and balance exercise price equivalent to 75% of the conversion price of the equity shares shall be payable by the warrant holder(s) at the time of exercising options of conversion of the warrants.

b. 55,74,912 convertible warrants having face value of Rs. 2/- each at issue price of Rs. 71.75/- each for aggregate considerationofRs.39,99,99,936/- (RupeesThirty-Nine Crores Ninety-Nine Lakhs Ninety-Nine Thousand Nine Hundred and Thirty-Six only) allotted on June 13, 2024, convertible into equivalent number of equity shares of the Company within 18 months from the date of allotment of such warrants. These convertible warrants have been allotted against receipt of the subscription price equivalent to 25% of the issue price i.e. Rs. 9,99,99,984/- (Rupees Nine Crores Ninety-Nine Lakhs Ninety-Nine Thousand Nine Hundred and Eighty-Four only) and balance exercise price equivalent to 75% of the conversion price of the equity shares shall be payable by the warrant holder(s) at the time of exercising options of conversion of the warrants.

Public Deposits

The Company is registered with RBI as a Non-Deposit accepting NBFC. Further, pursuant to the provisions of para 2 of the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, as amended, the Board of Directors have confirmed that during the financial year ended March 31, 2024, the Company has not accepted public deposits as defined under the Reserve Bank of India Act, 1934 and will not accept public deposits during the financial year 202425 without prior written approval of RBI.

Board of Directors

The Company recognizes the importance of a diverse Board in its success and believes that it will help the Company to enhance its governance and competitive arc. The Company has an optimum combination of executive, non-executive and independent directors, including an independent woman director. The composition of the Board of Directors of the

Company is in accordance with the provisions specified in the Act and Listing Regulations. The Board comprises of eminent persons of proven competence and integrity. Besides experience, strong financial acumen, strategic astuteness and leadership qualities, the Board of Directors have a significant degree of commitment towards the Company and devotes adequate time to meetings and preparation.

As on the date of this Report, the Board of Directors of the Company comprises of the following directors:

During the financial year ended March 31, 2024, and till the date of this Report, there were no changes in the composition of the Board of Directors of the Company. However, on recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company, the Shareholders of the Company at the 29^th Annual General Meeting of the Company held on September 26, 2023, have approved the below re-appointments:

(a) Re-appointment of Mr. Nirmal Vinod Momaya (DIN: 01641934) as an Independent Director of the Company for a further term of 5 (Five) consecutive years with effect from August 10, 2023 till August 09, 2028 (both days inclusive).

(b) Re-appointment of Mr. Krishipal Raghuvanshi (DIN: 07529826) as an Independent Director of the Company for a further term of 5 (Five) consecutive years with effect from August 24, 2023, till August 23, 2028 (both days inclusive).

All the Directors of the Company have confirmed that they are not disqualified to act as Director in terms of Section 164 of the Act.

In accordance with the provisions of Section 152(6) of the Act, Mr. Rajiv Kapoor, Non-Executive Non-Independent Director of the Company, is liable to retire by rotation at the ensuing AGM and, being eligible, has offered himself for re-appointment. The Board of Directors of the Company recommends the same for the approval of the Members of the Company.

The notice convening the AGM includes brief information and a proposal for re-appointment of Mr. Rajiv Kapoor as Director of the Company.

Declaration by Independent Directors

Pursuant to the provisions of Section 149(7) of the Act, the Independent Director(s) have submitted declarations

confirming that they meet the criteria of independence as provided in Section 149(6) of the Act along with rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting the status as Independent Directors of the Company during the financial year ended March 31, 2024.

Further, the Company has obtained the certificate from M/s. U. Hegde & Associates, Practicing Company Secretaries, pursuant to Regulation 34(3) and Schedule V Para C Clause 10(i) of the Listing Regulations confirming that none of the Directors on Board of the Company as on March 31, 2024, have been debarred or disqualified from being appointed or continuing as Director of the Company by SEBI/MCA or any such statutory authority. The aforesaid certificate is annexed to the Corporate Governance Report which forms part of the Annual Report.

Meetings of the Board

The Board met 4 (Four) times during the financial year. The details of the meeting(s) of the Board of Directors of the Company held during the financial year 202324 and attendance of the directors are included in the Corporate Governance Report which forms part of the Annual Report.

Composition of Committees of Board

The Board has various board level committees constituted in accordance with the applicable provisions of the Act and Listing Regulations.

(a) Audit Committee

The constitution of the Audit Committee as on March 31, 2024 and up to the date of this Report, is given below:

Note: The Board of Directors vide circular resolution passed on August 04, 2023, re-constituted the Audit Committee by appointing Mr. Rakesh Sethi, Independent Director of the Company, as a member of the Audit Committee.

The composition, role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Act and the Listing Regulations and the same have been provided in the Corporate Governance Report which forms part of the Annual Report.

During the year under review, the Audit Committee met and discussed various matters including financials, internal audit reports and statutory audit reports. During the period under review, the Board of Directors of the Company accepted all the recommendations of the Audit Committee.

The details with respect to the meeting(s) of Audit Committee held during the year under review and quorum are provided in the Corporate Governance Report which forms part of the Annual Report.

)) Nomination and Remuneration Committee

The constitution of the Nomination and Remuneration Committee as on March 31, 2024, and up to the date of this Report, is given below:

The composition, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Act and Listing Regulations and the same have been provided in the Corporate Governance Report which forms part of the Annual Report.

The Company has formulated a policy on Appointment and Evaluation of Directors and the Board, that includes the terms of reference of the Nomination and Remuneration Committee and the same is hosted on the website of the Company i.e., www.trucapfinance.com.

The details with respect to the meeting(s) of Nomination and Remuneration Committee held during the year under review and quorum are provided in the Corporate Governance Report which forms part of the Annual Report.

(c) Stakeholders Relationship Committee

The constitution of the Stakeholders Relationship Committee as on March 31, 2024, and up to the date of this Report, is given below:

The composition, role, terms of reference and powers of the Stakeholders Relationship Committee are in conformity with the requirements of the Act and Listing Regulations and the same have been provided in the Corporate Governance Report which forms part of the Annual Report.

The details with respect to the meeting(s) of the Stakeholders Relationship Committee held during the year under review, quorum and status of investors' complaints are provided in the Corporate Governance Report which forms part of the Annual Report.

(d) Risk Management and Strategy Committee

The constitution of the Risk Management and Strategy Committee as on March 31, 2024, and up to the date of this Report, consists of the following members:

The composition, role, terms of reference and powers of the Risk Management and Strategy Committee are in conformity with the requirements of the RBI Master Direction. Further, the details with respect to the meeting(s) of the Risk Management and Strategy Committee held during the year under review and quorum, along with the terms of reference have been provided in the Corporate Governance Report which forms part of the Annual Report.

(e) Corporate Social Responsibility Committee

The constitution of the Corporate Social Responsibility ("CSR") Committee as on March 31, 2024, and up to the date of this Report, consists of the following members:

The composition, role, terms of reference and powers of the CSR Committee are in conformity with the requirements of the Act. Further, the details with respect to meeting(s) of the CSR Committee held during the year under review and quorum along with the terms of reference have been provided in the Corporate Governance Report which forms part of the Annual Report.

Apart from the aforesaid committee(s), details with respect to the other committee(s) constituted by the Board/committee(s) are included in the Corporate Governance Report forming part of the Annual Report.

Board Evaluation

Pursuant to the provisions of the Act and Listing Regulations, the Company has devised Appointment and Evaluation Policy comprising of parameters and criteria with respect to evaluation of performance of the Independent Directors, Board of Directors, Committee(s) and other individual Directors which includes evaluation of the Non-Executive Directors and Executive Director. A structured questionnaire was prepared after taking into consideration various aspects such as performance of specific duties, obligations, Board's functioning, composition of the Board and its committees, culture and governance and circulated to the Board members. The performance evaluation of the Chairperson, Executive Director, Non-Executive Directors, Independent

Directors and Board as a whole, was carried out by the entire Board of Directors of the Company excluding the directors being evaluated. The Board of Directors expresses their satisfaction with the evaluation process.

The Board considered and discussed the inputs received from the Directors. The Independent Directors in their meeting held on May 19, 2023, considered and reviewed the following:

(a) Performance of Directors, various committees of Board and the Board as a whole.

(b) Performance of the Chairperson of the Company.

(c) Assessed the quality, quantity, and timeliness of flow of information between the Company's management and the Board, which is necessary for the Board to perform their duties effectively and reasonably.

The Appointment and Evaluation Policy which lays down criteria for appointment of Executive Director(s) and Independent Director(s) and remuneration of Directors, Key Managerial Personnel and senior management employees is annexed herewith as Annexure - II.

Familiarization Programme for Independent Directors

All Independent Directors are familiarized with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The Board, including all Independent Directors, were provided with relevant documents, reports and internal policies to enable them to familiarise with the Company's procedures and practices from time to time. Updates on relevant statutory changes in laws concerning the Company were informed to the entire Board on regular intervals. The Independent Directors are facilitated to meet without the presence of the Company's management to discuss matters pertaining to the Company's affairs. The Board including Independent Directors is also updated periodically on Related Party Transactions, various policies and Standard Operating Procedures of the Company, Entity Level Risk, Risk Mitigation Plans, etc. The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company i.e., www.trucapfinance.com.

Compliance with Fit and Proper Criteria & Code of Conduct

Each of the Director of the Company has submitted undertaking and declaration confirming on being fit and proper in terms of the provisions of Master Direction. The Board of Directors of the Company, on the recommendation

of the Nomination and Remuneration Committee, has reviewed and confirmed that all existing Directors are fit and proper to continue to be appointed as a Director on the Board.

The Company has adopted a Code of Conduct for the Board Members, Key Managerial Personnel and Senior Management of the Company. All Board Members, Key Managerial Personnel and senior management personnel have affirmed compliance with the Company's code of conduct during the financial year under review. The Managing Director & Chief Executive Officer has given the declaration as required under Regulation 34(3) read with Part D of Schedule V of the Listing Regulations regarding compliance with the Code of Conduct of the Company for the year ended on March 31, 2024, which forms part of the Report.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2024, are:

During the year under review and upto the date of this Report, there has been no change in the Key Managerial Personnel of the Company.

Subsidiary Company

DFL Technologies Private Limited is the wholly owned subsidiary company of the Company ("WoS").

Accordingly, pursuant to the provisions of Sections 129, 134 and 136 of the Act, read with applicable rules thereunder, Regulation 33 of the Listing Regulations and applicable Indian Accounting Standards ("Ind AS"), the Board of Directors of the Company approves the Consolidated Financial Statements of the Company and its WoS. Copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of the WoS are not attached to the accounts of the Company for the financial year 2023-24. The Company will make these documents/details available upon request by any Member of the Company. These documents/details will also be available for inspection by any Member of the Company at the registered office of the Company and at the registered office of the WoS during business hours on working days and through electronic means. Members of the Company

can request the same by sending an email to corpsec@ trucapfinance.com till the date of ensuing AGM. The Company's financial statements, which form part of the Annual Report, are prepared in accordance with Act and Ind AS 110.

As on March 31, 2024, the total investment made by the Company in the equity share capital of the WoS stood at Rs. 3,190.10 Lakhs.

As required under Regulations 16(1)(c) and 46 of the Listing Regulations, the Board has approved and adopted the Policy on determining Material Subsidiaries. The said Policy is available on the Company's website i.e., www. trucapfinance.com. Further, pursuant to Regulation 16(1)(c) of Listing Regulations and the policy on determining material subsidiary, based on the audited financial statements of the Company as on March 31, 2024, WoS continues to be the material subsidiary company of the Company.

Statement containing Salient Features of the Financial Statements of Subsidiary

A report on the performance and financial position of WoS, as per Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, as amended, is provided in the prescribed Form AOC-1 as Annexure - III of this Report and hence not repeated here for the sake of brevity.

Joint Ventures/Associates

As per the provisions of the Act, during the year under review and as on the date of this Report, the Company did not have any Joint Ventures/Associates.

Directors' Responsibility Statement

In terms of Section 134(5) of the Act read with the Companies (Accounts) Rules, 2014, as amended, your Directors state that:

(a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures;

(b) 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 a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit and loss of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a ‘going concern' basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Employees Stock Option Plan

The Company has in force the Dhanvarsha ESOP Plan - 2018 ("ESOP Plan 2018") which is prepared as per the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations").

The Shareholders of the Company have at the 28^th Annual General Meeting of the Company held on September 29, 2022, on recommendation of the Board of Directors of the Company, approved amendment in ESOP Plan 2018 to bring it in lines with the provisions of the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, as amended ("SEBI SBEB & SE Regulations"). The amendments approved are not detrimental to the interests of the current grantees of the Company under the ESOP Plan 2018. A certificate from M/s. U. Hegde & Associates, Practicing Company Secretaries, Secretarial Auditor of the Company, has been obtained that the ESOP Plan 2018 has been implemented in accordance with SEBI SBEB & SE Regulations, and the same will be available for inspection by Members of the Company through electronic means.

Under IND AS, equity settled share-based payment transactions with employees are required to be accounted for as per IND AS 102 "Share-based Payment", whereby the fair value of options as on the grant date should be estimated and recognized as an expense over the vesting period. In accordance with the above, the Company has followed fair value method for equity options while preparing its financial statements.

The disclosures relating to ESOP Plan 2018 required to be made under the provisions of the Act and SEBI SBEB & SE Regulations, are provided on the website of the Company i.e., www.trucapfinance.com and link is https://trucapfinance. com/wp-content/uploads/ESOP-Certificate-FY-2023-24.pdf and the same is available for inspection by the Members of the Company at the registered office of the Company on all working days, except Saturdays and Public Holidays, during business hours and through electronic means. Members of the Company can request the same by sending an email to corpsec@trucapfinance.com till the date of the ensuing AGM.

Leverage Ratio

As on March 31, 2024, the Company is classified as a Base Layer Non-Banking Financial Company as per Master Direction and is accordingly required to maintain a leverage ratio which as per regulatory norms shall not be more than

7 times. Accordingly, the Company is adequately capitalized and the leverage ratio of the Company as on March 31, 2024 was at 3.56 times.

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business, as stipulated under Regulation 34(2)(e) read with Schedule V of the Listing Regulations, is presented in a separate section forming part of the Annual Report under the head ‘Management Discussion and Analysis.'

Business Responsibility Report

Pursuant to amendment in Listing Regulations, top 1,000 listed entities based on market capitalisation on either BSE or NSE are required to submit a Business Responsibility and Sustainability Report ("BRSR"). Since, as on March 31, 2024, the Company is not under top 1,000 companies based on market capitalization either on BSE and NSE, BRSR is not required to be annexed to this Report. However, as instructed by SEBI vide interpretive letter regarding the applicability of BRSR, issued under SEBI (Informal Guidance) Scheme, 2003, dated May 31, 2023, SEBI directed all top 1,000 entities basis market capitalisation till financial year 202122, to continue to annex a business responsibility report to its annual report. Accordingly, the Business Responsibility Report ("BRR"), in terms of Regulation 34(2)(f) of the Listing Regulations, describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

Corporate Governance

Your Company believes in adopting best Corporate Governance practices and has also implemented several best practices prevalent globally. The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations forms an integral part of the Annual Report.

Further, certificate obtained from M/s. U. Hegde & Associates, Practicing Company Secretaries, confirming compliance with the conditions of the Corporate Governance as stipulated under Regulation 34(3) and Schedule V to the Listing Regulations is annexed to the Corporate Governance Report which forms part of the Annual Report.

Compliance with the Secretarial Standards

The Board of Directors affirms that the applicable Secretarial Standards, i.e., SS-1 and SS-2, as amended, issued by the Institute of Company Secretaries of India ("ICSI") relating to ‘Meetings of Board of Directors' and ‘General Meetings', respectively, have been duly followed by the Company.

Contracts and Arrangements with Related Parties

The Company has put in place Board approved Policy on Related Party Transactions ("RPT Policy"). The

RPT Policy is available on the website of the Company

i.e., www.trucapfinance.com and the link is https:// trucapfinance.com/wp-content/uploads/Policy-on-RPT.pdf. The RPT Policy provides for identification of Related Party Transactions ("RPT"), necessary approvals by the Audit Committee/Board/Shareholders, reporting and disclosure requirements in compliance with the Act and provisions of the Listing Regulations.

All contracts executed by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. All such RPTs were placed before the Audit Committee/Board for approval, wherever applicable. The Audit Committee reviews all RPTs on quarterly basis.

During the year, the contracts/arrangements/transactions with related parties entered into by the Company were not material in accordance with Regulation 23 of the Listing Regulations.

Further, in terms of SEBI vide circular SEBI/HO/CFD/CFD- PoD-1/P/CIR/2023/123 dated July 13, 2023 amended and Regulation 30 and 30A of the Listing Regulations, the revised Policy for Determination and Disclosure of Material Events was approved by the Board in its meeting held on November 09, 2023.

Since all RPTs entered into by the Company during the financial year ended March 31, 2024, were on an arm's length basis and in the ordinary course of business, the disclosure required in Form AOC-2 under Section 134(3)(h) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, is not applicable. Further, in compliance with Regulation 23 of the Listing Regulations, disclosures relating to RPTs on a consolidated basis are filed with the stock exchange(s) on a half-yearly basis.

The Policy for Determining Material Subsidiaries and the Policy for Determination and Disclosure of Material Events along with the RPT Policy, as approved by the Board may be accessed on the website of the Company i.e., www. trucapfinance.com. Please refer to Note No. 44 of the Standalone Financial Statements, which contains related party disclosures.

Internal Financial Controls and adequacy

Your Company maintains a robust internal control, compliance, and audit framework tailored to match the operational scale and the intricate nature of the business of the Company. The Company has in place adequate internal financial controls with reference to the financial statements and the same are commensurate with the scale and complexity of its operations. Further, pursuant to provisions of Section 138 of the Act, the Company has appointed internal auditors who conduct internal audits on a periodic basis to independently validate the existing controls as per scope assigned to them. The internal audit program is

reviewed by the Audit Committee at the beginning of the year to ensure that the coverage of the areas is adequate. Internal Auditors test the design and effectiveness of the key controls. Significant audit observations, if any, are presented to the Audit Committee along with the status of management actions and the progress of implementation of recommendations. The Company also periodically engages outside experts to carry out independent reviews of the effectiveness of various business processes. The observations and best practices suggested are reviewed and appropriately implemented with a view to continuously strengthening the internal controls.

During the year under review, no reportable material weaknesses in the design or operations was observed.

Annual Return

Pursuant to the provisions of Section 92(3) and Section 134(3)(a) of the Act, and the rules made thereunder, as amended, the Annual Return of the Company as prescribed in Form MGT-7 is available on the website of the Company i.e., www.trucapfinance.com.

Statutory Auditors and Auditors' Report

The audit for the financial year 2023-24 was conducted by M/s. Bansal Bansal & Co., Chartered Accountants (Firm Registration No.100986W with the Institute of Chartered Accountants of India), Statutory Auditors of the Company and there are no qualifications, reservations, adverse remarks, or disclaimers made by them in their Audit Report(s). The notes to financial statements referred to in the Auditors' Report are self-explanatory and therefore do not call for any comments under Section 134 of the Act. The report(s) issued by the Statutory Auditors of the Company are annexed to the financial statements in the Annual Report.

Secretarial Auditor

Pursuant to Section 204(1) of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, M/s. U. Hegde and Associates, Practicing Company Secretaries (Membership Number: A22133 with the Institute of Company Secretaries of India), is appointed as the Secretarial Auditor of the Company for the financial year 2023-24. The Secretarial Audit Report in Form MR-3 for the financial year ended March 31, 2024, is annexed herewith as Annexure-IV-A to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Annual Secretarial Compliance Report

Pursuant to Regulation 24A of the Listing Regulations, the Annual Secretarial Compliance Report for the financial year 2023-24 was issued by M/s. U. Hegde & Associates, Practicing Company Secretaries, Secretarial Auditor of the Company. The Annual Secretarial Compliance Report for

the financial year 2023-24 has been submitted to BSE and NSE in compliance with the SEBI Circular No. SEBI/HO/CFD/ CMD1/CIR/P/2020/38 dated March 19, 2020, read with BSE Circular No. 20230410-41 dated April 10, 2023 and NSE Circular No. NSE/CML/2023/30 dated April 10, 2023.

Since, pursuant to Regulation 16(1)(c) of the Listing Regulations, based on the audited financial statements of the Company as on March 31, 2024, WoS continues to be the material subsidiary company of the Company, accordingly, as per Regulation 24A of the Listing Regulations, the Secretarial Audit Report of the WoS for financial year 202324 is annexed herewith as Annexure-IV-B to this Report.

Reporting of Frauds by the Auditors

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee/Board under Section 143(12) of the Act.

Corporate Social Responsibility

In accordance with Section 135 of the Act, the Company has constituted a CSR Committee.

The Board of Directors of the Company, have on recommendation of the CSR Committee, approved Policy on Corporate Social Responsibility of the Company and the same is available on the website of the Company i.e., www. trucapfinance.com. The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is annexed as Annexure- V to this Report.

Conservation of Energy, Technological Absorption, Foreign Exchange Earnings and Outgo

The Company is engaged in the activity of providing financial services and, as such, its operations have limited impact vis-a-vis substantial energy consumption. Energy is consumed on a regular level to aid regular office work, however, the Company appreciates the need to reduce the net carbon footprint. Accordingly, the Company is taking all possible measures to conserve energy and reduce consumption by adopting alternative power devices or employing technology solutions.

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

a. Considering the nature of Company's business, the Company is not required to undertake any activity involving the Conservation of Energy or Technological or Technology Absorption and nor has it applied its resources towards research and development;

b. The Company's Foreign Exchange Earning was Nil during the year under review.

c. Foreign Exchange Outgo was Rs. 104.56 Lakhs during the year under review.

Particulars of Loan given, Investment made, Guarantee given, and Securities provided by the Company

The Company, being an NBFC registered with the RBI, the provisions mentioned in Section 186 of the Act, related to loans made, guarantees given, and securities provided do not apply to the Company. Accordingly, the disclosures under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as amended, have not been made in this Report.

Further, in accordance with the Master Direction, the Board of Directors have, on recommendation of the Audit Committee, approved Policy on Loan to Directors and Senior Officers. Further, during the year under review and up to the date of this Report, no loans to directors and senior officers of the Company have been advanced.

Whistle Blower Policy/Vigil Mechanism

In compliance with the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended, and Regulation 22 of the Listing Regulations, and to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, your Company has adopted a Vigil Mechanism / Whistle Blower Policy. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and is also provided direct access to the Chairperson of the Audit Committee, in appropriate or exceptional cases.

Accordingly, ‘Whistle Blower Policy' has been formulated with a view to provide a mechanism for the Directors and employees of the Company to approach the Chairperson of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about serious irregularities within the Company.

The policy has also been uploaded on the website of Company i.e., www.trucapfinance.com and the link is https:// trucapfinance.com/wp-content/uploads/Vigil-Mechanism.pdf.

Risk Management

As an NBFC, the Company is exposed to various risks which, inter alia, includes credit, liquidity, market, operational, interest rate risk and other risk associated with the business and the industry it operates in. To mitigate such risks, the Company continues to invest in talent, processes and emerging technologies for building advanced risk management

capabilities and has a well-defined risk management framework in place for managing and reporting on risks. A systematic approach has been adopted that originates with the identification of risk, categorization and assessment of identified risk, evaluating effectiveness of existing controls and building additional controls to mitigate risk and monitoring the residual risk through effective Key Risk Indicators.

The Board has constituted a Risk Management and Strategy Committee as required under Master Direction.

The Company has a Board approved Policy on Risk Management, which, inter alia, provides for principles of risk management, risk governance, organization structure, business control measures, principle risks and business continuity plan. The management identifies and controls risks through a defined framework in terms of the aforesaid policy.

Further, the Board, on a periodic basis, reviews and assesses the Risk Assessment Statement, monitoring the various risks to which the Company is exposed to vis-a-vis the prudential parameters.

Particulars of employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the disclosures pertaining to the remuneration and other details as required is annexed as Annexure - VI to this Report.

A statement with the names and other particulars of employees drawing remuneration in excess of the limits prescribed under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the registered office of the Company and through electronic mode. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. Any Member interested in obtaining such information may send an email on corpsec@trucapfinance.com.

Listing Fees

As on date, the equity shares of the Company are listed on BSE and NSE. The listing fees for the financial year 202425 for BSE and NSE have been paid by the Company.

Auction for Recovery for Loan against Gold

The Company is into the business of lending and also offers loans against the collateral of gold. In its normal course of business, whenever default occurs, the Company disposes such assets through auction, to settle outstanding debt as per the auction policy of the Company and in compliance with the provisions specified in the applicable Master Directions. Any surplus funds from the auction proceeds are returned to the customers/obligors. The disclosure in compliance with the Master Direction in respect of auctions made during the year is provided in Note No. 55.12 of the Standalone Audited Financial Statements of the Company annexed to the Annual Report.

Transfer and Acquisition of Loan Exposure and Securitization

During the year under review, pursuant to provisions prescribed in the Master Direction - Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 issued by RBI on September 24, 2021, as amended ("TLE Direction") and Master Direction - Reserve Bank of India (Securitization of Standard Assets) Directions, 2021, as amended ("Securitization Direction"), the Company has transferred, acquired and securitized loan exposure under the TLE Direction and Securitization Direction. The disclosures as required under both the respective Directions are included in Note No. 55.09 and 55.15 of the Standalone Audited Financial Statements annexed to the Annual Report.

Registration with Reserve Bank of India

The Company is registered as NBFC under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits/discharge of liabilities by the Company.

Investor Education and Protection Fund (IEPF)

a) For dividend pertaining to equity

In accordance with the applicable provisions of the Act read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of 7 (Seven) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for 7 (Seven) consecutive years or more shall be transferred to the demat account of the IEPF Authority.

Since there was no dividend declared and paid for financial year 2015-16, your Company did not have any funds as lying unpaid or unclaimed for a period of 7 (Seven) years in terms of provisions of Section 124 of the Act. Therefore, there are no funds which are required to be transferred to IEPF established by the Central Government pursuant to the provisions of Section 125 of the Act.

During the year under review, the Company did not have any equity shares which were required to be transferred to IEPF as per the provisions of Section 124 of the Act.

b) For Interest/Redemption amount pertaining to NCDs

SEBI has, vide its circular SEBI/HO/DDHS/DDHS- RAC-1/P/CIR/2023/176 dated November 08, 2023, introduced the ‘Framework for transfer of unclaimed amounts to Escrow Accounts and claim thereof by investors of the non-convertible debentures' by amending Regulation 61A of the Listing Regulations.

In terms with the said Framework, the Board of Directors on recommendation of the Stakeholders Relationship Committee approved the ‘Policy for claiming and verification of unclaimed amounts with respect to non-convertible debentures' and the said policy is hosted on the website of the Company at www.trucapfinance.com. Further, during the year under review, no interest/redemption was required to be transferred to the Escrow Account or IEPF in terms with the Framework.

Material changes and commitments affecting financial position between end of the financial year and date of this Report.

There are no material changes and commitments affecting the financial position of the Company during the period between end of the financial year and date of this Report.

Code of Conduct for Prevention of Insider Trading

The Board of Directors of the Company has adopted the ‘Code for Insider Trading & Fair Disclosure of Unpublished Price Sensitive Information (UPSI)' ("Code") as formulated under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended.

The Code lays down the guidelines and procedure to be followed and disclosures to be made while dealing with the securities of the Company. The Code has been formulated to regulate, monitor and ensure reporting of dealings by the employees of the Company and is available on the website of the Company i.e., www.trucapfinance.com.

Policy on Prevention of Sexual Harassment at Workplace

Your Company recognizes its responsibility and continues to provide a safe working environment for women, free from sexual harassment and discrimination. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on Prevention of Sexual Harassment of Women at Workplace and the same is available on the website of the Company i.e., www.trucapfinance.com and has duly constituted an internal complaints committee under the same.

The Company also provides for mandatory training on prevention of sexual harassment for every new joinee, as well as all employees on an annual basis.

During the year under review, there were no complaints made or case filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Cost Records and Auditors

The provisions of Cost Records and Cost Audit as prescribed under Section 148 of the Act are not applicable to the Company.

Significant and Material order passed by the Regulatory or Courts

There were no significant material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operation.

Applications under the Insolvency and Bankruptcy Code, 2016

There was no application made against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review. There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 against the Company as on March 31, 2024.

Details of difference between amount of the valuation

During the year under review, there were no one time settlements made by the Company for any loan/borrowing taken from the Banks and/or Financial Institutions. Therefore, as per Rule 8(5)(xii) of Companies (Accounts) Rules, 2014, reasons of difference in the valuation at the time of one-time settlement and valuation done while taking loan from the Banks or Financial Institutions are not required to be reported.

General

Your Directors state that no disclosure or reporting is required in respect of the following items, as there were no transactions / events on these items during the year under review:

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

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. None of the Executive Director(s) of the Company receives any remuneration or commission from its subsidiary.

Appreciation

Your Directors place on records their sincere appreciation for the assistance and guidance provided by the Reserve Bank

of India, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, government and other Regulatory Authorities, Stock Exchanges, other statutory bodies, bankers and Members of the Company for the assistance, co-operation and encouragement and continued support extended to the Company.

Your directors take this opportunity to thank the customers, vendors and investors and other business partners of the Company for their continued support during the year and also place on record their appreciation to the contribution made by the employees of the Company at all levels.