Your director's have pleasure in presenting their Thirty-First Annual Report on the Business and
Operations of the Company and the accounts for the financial year ended 3istMarch, 2025.

i. FINANCIAL RESULTS

2. DIVIDEND

In view of the financial performance of the Company during the year under review, the
Board of Directors has recommended a dividend of 5% (i.e., ^0.50 per equity share of ?io
each) for the financial year ended 31st March 2025, subject to the approval of the
shareholders at the ensuing Annual General Meeting (AGM).

The recommended dividend is in accordance with the Dividend Distribution Policy of the
Company, which aims to balance the objective of rewarding shareholders and
maintaining adequate reserves for future growth.

3. RESERVES

The Board has decided to transfer a sum of Rs. I Crores to General Reserves and a sum of
Rs.1.41 Crores to statutory Reserve Fund maintained as per RBI guidelines.

4. BRIEF DESCRIPTION OF THE COMPANY'S AFFAIRS

The Company successfully listed its equity shares on the NSE Emerge platform under the
SME segment on 28th May 2025. This marks a significant milestone, as the Company has
become the first Non-Banking Financial Company (NBFC) from the Eastern region to be
listed on NSE Emerge and the issue received an overwhelming response from investors
and was oversubscribed approximately 106 times.

During the year under review Company has delivered strong performance. Despite a
complex macroeconomic environment - market by fluctuating interest rates, geopolitical
uncertainty, and evolving regulatory landscapes - we remained resilient and agile.The
Company's total income for the financial year ended March 31,2025, has increased to Rs.
41.39 Crores from Rs. 32.86 Crores having a revenue growth of 26%. The Profit before
Depreciation & Tax (PBDT) of the Company has increased to Rs 9.72Crores from Rs. 5.49
Crores. The Profit after Tax has also increased to Rs 7.04 Crores from Rs 3.68 Crores having
a growth of 91%. During the year under review an amount of Rs.1.41 Crores was transferred
to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934
and an amount of Rs. 1 Crores was transferred to General Reserve. The Company's Net
Worth as on March 31,2025 stood at Rs. 73.51 Crores as against Rs. 66.97 Crores, in the last
year. The Company has continued its thrust in financing Personal Loan/MSME Loans.

In the current year, your Company has focused on Secured MSME Lending, which
involves providing loans to businessmen who offer their shops, houses, vacant land as
collateral security. To support this initiative, several branches have been opened in West
Bengal, Bihar, and Jharkhand, continuing the Company's focus on the MSME lending
program. These expansions are expected to drive improved business performance, higher
profits, increased revenue, and overall growth for the Company.

Your Company has been operating in Rajasthan for the past 30 years. As part of its
strategic expansion in the region, a new branch has been opened in Chittorgarh,
primarily focused on providing Loan against Property (LAP) for business loans.

Since your Company is engaged in the small value loan and delivering credit to the last
mile borrower, there is enormous opportunity to grow.

5. RESOURCES

State Bank of India our main lender in banking has continued to support Company's
lending programs.

During the year under review, other Banks & NBFCs have also supported Company's
lending program.

6. RATING

To scale up the resource base of the Company and to take bank loan, the Company had
applied for credit rating of bank /NBFC loan limit for upto Rs. 162 Crores to Credit Analysis
& Research Ltd. (CARE), who have maintained the investment grade rating of the
Company-“BBB-” (stable outlook).

7. NPA

The percentage of gross non-performing assets (GNPA) as of March 31, 2025 is 1.11%, as
against 0.55% as of March 31,2024. The percentage of net non-performing assets (NNPA)
as of March 31,2025is 0.58% as against 0.35% as of March 31,2024.

Gross NPA and Net NPA shown an increase due to recognition of NPA on 120 days basis
and also due to marginal distress on unsecured loan portfolio.

8. MANAGEMENT DISCUSSION & ANALYSIS
Opportunities

In the current financial ecosystem, NBFCs (Non-Banking Financial Companies) are
strategically positioned to capitalize on emerging opportunities in the MSME and
personal loan segments. The MSME sector in India, despite its vital role in employment
generation and economic development, continues to face a significant credit shortfall.
Traditional banks often shy away from lending to MSMEs due to perceived risks, lack of
formal documentation, and rigid collateral requirements. NBFCs, with their flexible
approach and deep penetration into semi-urban and rural markets, are well-suited to fill
this gap. By using alternative credit assessment models, digital tools, and localized
outreach strategies, NBFCs can offer tailored financial products that meet the diverse
needs of small and medium enterprises.

The increasing formalization of MSMEs through GST registrations and digital adoption
has improved their visibility and credit profile, making them more bankable. NBFCs that
adopt technology for credit scoring and monitoring can gain a competitive edge in
efficiently underwriting and servicing these clients.

Simultaneously, the personal loan segment has seen robust growth, driven by changing
consumer behavior, increasing urbanization, and a growing preference for short-term,
unsecured credit. Traditional financial institutions often find it challenging to cater to this
segment due to the lack of conventional income proofs or credit histories. NBFCs, on the
other hand, are more agile and open to using alternate data—like transaction patterns,
mobile usage, and social media footprints—for credit evaluation. This makes them better
equipped to offer small-ticket, quick-disbursal loans in a fully digital environment.

The advent of fintech partnerships has further enhanced the capabilities of NBFCs in
delivering personal loans at scale. By integrating with payment gateways, e-commerce
platforms, and digital wallets, NBFCs can embed credit products directly into consumer
journeys. This not only improves loan uptake but also provides rich data for better risk
assessment With advanced analytics, Al-driven models, and automation, NBFCs can
significantly reduce operational costs and improve turnaround times—key factors in
customer satisfaction for personal lending.

In conclusion, the MSME and personal loan segments offer immense growth potential
for NBFCs that are willing to innovate, digitize, and adapt to evolving market dynamics.
By focusing on underserved segments, adopting risk-sharing mechanisms, and
leveraging technology, NBFCs can play a crucial role in driving inclusive credit growth
while building sustainable and profitable lending portfolios.

Threat

Despite the growth opportunities in the MSME and personal loan segments, NBFCs face
several critical threats in the current economic and regulatory environment One of the
primary concerns is the rising credit risk, especially in the MSME sector. Many MSMEs
continue to operate in informal settings with volatile cash flows and limited financial
documentation, making it challenging to assess creditworthiness accurately. While
alternative data and digital underwriting can improve assessments, they are not
foolproof. In times of economic stress—such as inflationary pressures, supply chain
disruptions, or geopolitical tensions—MSMEs are among the first to feel the impact,
which can lead to increased defaults and NPAs for lenders, especially those with
significant exposure.

Another pressing threat is the intensifying competition from both traditional banks and
new-age fintechs. Large private banks are increasingly entering the MSME and personal
loan spaces with aggressive pricing, better technology, and stronger balance sheets. At the
same time, fintech startups, often backed by venture capital, are offering highly
personalized digital lending products with rapid disbursals, often outpacing NBFCs in
customer experience. This competition is squeezing margins and forcing NBFCs to either
take on higher risk or invest heavily in tech to stay relevant, which may not be feasible for
all players.

Additionally, regulatory tightening by the RBI poses a significant challenge. The
regulator is increasingly bringing NBFCs under a more stringent compliance and
supervision framework, similar to banks. Recent guidelines on digital lending, data
privacy, co-lending norms, and provisioning requirements aim to safeguard customers
and the system, but they also increase the operational and compliance burden on NBFCs.
Smaller or mid-sized NBFCs, in particular, may struggle to keep up with these
requirements, impacting their ability to scale efficiently.

Lastly, funding constraints remain a structural threat for many NBFCs. Unlike banks,
NBFCs do not have access to low-cost deposits and are heavily dependent on market
borrowings or bank lines of credit In times of market volatility or credit tightening, raising
funds becomes more expensive and difficult, directly affecting lending capacity. This is
especially critical in segments like MSME and personal loans where default risks are
inherently higher, and margins must be managed carefully. Without consistent and
affordable funding, many NBFCs may be forced to slow down disbursements or exit
riskier segments, losing ground to better-capitalized competitors.

Business Outlook

The Non-Banking Financial Company (NBFC) segment is expected to gain positive
momentum in coming future. The growth of many NBFCs in India had been driven by
higher-than-expected investment banking revenues and interest income. NBFCs had also
mobilized their on-ground recovery staff to ramp up their collection efforts. NBFCs with a
niche presence and strong pricing power are likely to witness margin expansion in the
years ahead.

NBFC segment has entered into a new business landscape wherein it needs to
continuously strive to innovate and add new products to its toolkit. Core strength of
NBFCs include customer base; strong distribution and servicing reach; higher risk
appetite; flexible business model and faster scale-up and scale-down capability. The
NBFCs have also been fast in adopting newer technology led processes. Leveraging the
above, product providers like NBFCs can consider expanding into marketplace driven
platforms to serve a customer with multitude of products and services while ensuring
customer protection.

9. CHANGE IN THE NATURE OF BUSINESS. IF ANY

There has been no change in the nature of business of the Company.

10. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS
SUBSIDIARIES. JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE
YEAR

The Company does not have any Subsidiaries, Joint Ventures or Associate Companies
during the year

11. MAINTENANCE OF COST RECORDS AS SPECIFIED BY THE CENTRAL
GOVERNMENT UNDER SUB-SECTION (i) OF SECTION ia8 OF THE COMPANIES
ACT. 2on.

Maintenance of cost records and requirements of cost audit as prescribed under the
provisions of section 148(1) of the Act is not applicable for the business activities carried
out by the company.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL
POSITION OF THE COMPANY

No material changes occurred subsequent to the close of the financial year of the
Company to which the balance sheet relates and the date of the report.

13. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS

No significant and material orders have been passed by the regulators or courts or
tribunals impacting the going concern status and company's operations in future.

14. DEPOSITS

Your Company does not accept deposits from the public.

15. STATUTORY AUDITORS

At the Twenty-Sixth AGM held on iythAugust 2020, the Members approved appointment
of M/s K A S G 8c Co., Chartered Accountants (Firm Registration No. 002228C) as Statutory
Auditors of the Company to hold office for a period of five years from the conclusion of
that AGM till the conclusion of the thirty-first AGM. The statutory audit report is attached
with financial statements and forms part of this report and does not contain any
qualification, reservation or adverse remarks.

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and
Auditors) Rules, 2014, the term of M/s K A S G & Co., Chartered Accountants (Firm
Registration No. 002228C), as the Statutory Auditors of the Company, expires at the
conclusion of 31st AGM of the Company.

The Board of Directors of the Company at their meeting held on nth June, 2025, based on
the recommendation of the Audit Committee, have recommended the appointment of
M/s. VMSM & Co., Chartered Accountants (Firm Registration No. 329962E) as Statutory
Auditors of the Company in place of M/s K A S G & Co., Chartered Accountants, for a term
of 5 (five) consecutive years from the conclusion of 31st AGM till the conclusion of the 36th
AGM, i.e FY 2025-2026 till FY 2030-2031 subject to the approval of the members.
Accordingly, an Ordinary Resolution, proposing appointment of M/s. VMSM & Co.,
Chartered Accountants as the Statutory Auditors of the Company for a term of five
consecutive years pursuant to Section 139 of the Act, forms part of the Notice of the 31st
AGM of the Company.

The Company has received the written consent and certificate that they satisfy the criteria
provided under section 141 of the Act and that the appointment, if made, shall be in
accordance with the applicable provisions of the Act and rules framed thereunder.

i6. AUDITOR'S REPORT

The observations of Auditors in their report read with notes to the accounts are self-
explanatory and do not call for any further explanation. The Report given by the Statutory
Auditors is annexed as “Annexure 1 and Annexure 2”

[7. INTERNALAUDITORS

The Board approved appointment of M/s B Chatterjee & Co., Chartered Accountants as
Internal Auditor of the Company to conduct audit for FY 2024-25.

18. SHARE CAPITAL

The Authorised Share Capital of the Company has increased from Rs. 12.50 Crores to Rs. 15
Crores.

The Paid up Share Capital of the Company has increased from Rs. 10 Crores to Rs. 14.27
Crores.

19. ANNUAL RETURN

Pursuant to section 92(3) read with section 134 (3)(a) of the Companies Act, 2013 the annual
return as on 31st March, 2025 can be accessed on the Company's website at the
https://www.darcredit.com/

20. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Since your Company renders financial services, the disclosure relating to conservation of
energy and technology absorption is not applicable.

21. FOREIGN EXCHANGE EARNINGS AND OUTGO

We have made payment for Rising Sun Software for the service availed by us for the FY

2024- 2025 is f 5,92,409.

22. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has met the prescribed threshold under section 135 of the Companies
Act,20i3 during FY 2024-2025 but the provisions of CSR shall be applicable from the FY

2025- 2026.

23. NUMBER OF MEETINGS OF THE BOARD

24. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Saswata Chaudhuri, Independent Director of the Company retired from his position
with effect from 31.07.2024 in accordance with the provision of the Companies Act,20i3
and Article of Association of the Company. He was eligible for reappointment and has
been reappointed for a further term of 2 (two) years with effect from 01.08.2024.

Further, Ms. Neha Baid, Independent Women Director of the Company, retired from her
position with effect from 24.03.2025 in accordance with the provision of the Companies
Act,20i3 and the Article of Association of the Company.

She was subsequently appointed as an Additional Director (Independent Director) with
effect from 25th March 2025 and shall hold office up to the date of the ensuing Annual
General meeting and thereafter she will be reappointed as an Independent Director
subject to the approval of shareholders of the Company for a second term of five years in
the upcoming annual general meeting.

25. DECLARATION OF INDEPENDENCE

The Company has received declarations from all Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed under the
provisions of Section 149(6) of the Companies Act, 2013 along with Rules framed
thereunder.

In the opinion of the board, Independent Directors fulfil the conditions specified in the
Act and the rules made there under for appointment as Independent Directors including
integrity, expertise and experience and confirm that they are independent of the
management All the Independent Directors of the Company have registered their names
with the data bank of Independent Directors and completed online proficiency self-
assessment test as per the timeline notified by the Ministry of Corporate Affairs (MCA).

26. DETAILS OF FRAUDS REPORTED BY THE AUDITORS

During the year under review, the Auditors of the Company have not reported any fraud as
required under Section 143(12) of the Companies Act, 2013.

27. INFORMATION ON COMMITTEES OF BOARD;

Following is the details of various committees and its members. The committee meetings
were held periodically and were attended by the respective members. The Finance
Management Committee (Formerly known as Borrowing Committee) meetings took
place as and when fresh/new loans were availed by the Company.

B. Internal Compliants Committee:

C. Asset and Liability Management Committee:

D. Finance Management Committee:

E. Audit Committee:

F. Nomination & Remuneration Committee:

G. Stakeholder Relationship Committee

28. GENERAL BODY MEETING

29. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION
186

The disclosure under section 186 of Companies Act, 2013 is not applicable since your
Company is a Non-Banking Finance Company.

30. RISK MANAGEMENT POLICY

Operational risk is defined as the risk of loss resulting from inadequate or failed internal
processes, people and systems or from external events. The Company has adopted strict
measures towards formulating an effective operational risk management strategy which
involves identification, assessment, review, control and reporting of key operational risks.
The Company has built into its operational process proper segregation of functions, clear
reporting structures, well-defined processes, operating manuals, staff training,
verification of high value transactions and strong audit trails to control and mitigate
operational risks. New product and activity notes prepared by business units are reviewed
by all concerned departments including compliance, risk management and legal.
Measurement and reporting is also achieved through the various management
information systems, providing easily retrievable information, intertwined with each
operational process which are generated and monitored regularly. All concerned
departments coordinate and discuss key operational risk issues involving people, process,
and technology, external factors, among others, so as to minimize them or ensure
adequate controls over them. Risk registers across various processes are assessed for
likelihood and vulnerability of threats, and their acceptability evaluated based on existing
controls. The Company has set up a centralized control mechanism for better deployment
and management of resources. The Company has also put in place a rigorous surveillance
and classification of information system to ensure robust information technology risk
management. The Company has a well-designed business continuity plan, whose
effectiveness is gauged by proper testing mechanisms and which ensures continuity of
business in the unlikely event of business disruption. In order to provide continued and
uninterrupted service even during natural disasters, a disaster recovery site is in place. To
further enhance the standard operating procedures and various technological functions,
the Company is has been investing so as to keep its technological systems constantly
updated across the various domain functions. In addition, to manage operational risk
prudently, know your customer and anti-money laundering policy are in place. The
Company's risk management framework emphasizes on analyzing and understanding
the underlying risks before undertaking any transactions and changing or implementing
processes and systems. This is facilitated by a robust governance structure, which
includes multi-tiered approval levels for all transactions and processes. This mechanism
is aided by a regular review of the portfolio and control mechanisms, undertaking self-
assessment programs and monitoring of key risk indicators.

31. NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee
framed a policy for selection and appointment of Directors, Senior Management and
their remuneration the contents of which are placed on the website of the Company
https://www.darcredit.com/

32. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES

In accordance with the provisions of Section 188(1) of the Companies Act, 2013 there are no
materially significant related party transactions made by the Company with Promoters,

Directors, Key Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large. Accordingly, no transactions
are being reported in Form AOC-2 in terms of Section 134 of the Act read with rule 8 of the
Companies (Accounts) Rules, 2014 and hence does not form part of this report

However, the disclosures of the related parties are provided in the notes to accompanying
Standalone F inancial Statements of the Company for the F inancial Year ended 31st March
2025 in the accordance with the Accounting Standards.

33. ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has in place adequate financial controls with reference to financial
statements. During the year, such controls were tested and no reportable material
weakness in the design or operation were observed.

34. OBLIGATION OF COMPANY UNDER SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT. 20K

The Company has adopted a policy for prevention of sexual harassment of women at
workplace and has set up committee for implementation of said policy. During the year,
Company has not received any complaint of harassment.

35. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING
UNDER THE INSOLVENCY AND BANKRUPTCY CODE. 2016 DURING THE YEAR
ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

There is no application made or no proceeding pending under the Insolvency and
Bankruptcy Code, 2016 during the year.

36. ONE TIME SETTLEMENT

There has been no one-time settlement done during the year.

37. SECRETARIAL AUDIT;

M/s. Jayshri Tulsyan & Associates, Company Secretaries, were appointed as the
Secretarial Auditor of the Company for the financial years from 2019-2020 to 2023-2024.
Considering their valuable contribution and the quality of audit services provided, the
Board hasre-appointed w.e.f 5th November, 2024 as the Secretarial Auditor of the
Company for the financial years from 2024-2025 to 2028-2029, in compliance with the
provisions of Section 204 of the Companies Act, 2013.

The Secretarial Audit was carried out by M/s. Jayshri Tulsyan 8c Associates, Company
Secretaries for the financial year ended on 31st March, 2025. The Report given by the

Secretarial Auditors is annexed as “Annexure 4” and forms integral part of this Report
There has been no qualification, reservation or adverse remark or disclaimer in their
Report.

38. RBI GUIDELINES

Your Company continues to comply with all the requirements prescribed by the Reserve
Bank of India as applicable to it. Special Auditor's Report issued by the Auditor to the
Board in terms of the requirement of the Reserve Bank of India is annexed herewith and
marked as “Annexure 3 “.

39. GOVERNANCE

Your Company is committed to adhere to the best practice of governance it is always
ensured, that the practices being followed by the Company are in alignment with its
philosophy towards Corporate Governance. Your Company believes that the Corporate
Governance is all about effective management of relationship among constituents of the
system and always works towards strengthening this relationship through corporate
fairness, transparency and accountability. In your Company, prime importance is given to
reliable financial information, integrity, transparency, fairness, empowerment and
compliance with law in letter and spirit. Your Company proactively follows Government
principles and practices as to meet the business and regulatory needs, which has enabled
it to emerge as one of the best corporate governed companies.

40. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3) (c) of the Companies Act, 2013, it is
hereby confirmed that;

(a) In the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;

(b) The directors had 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 at the end of the financial year and the
profit of the Company for that period;

(c) The directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this 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; and

(e) 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.

41. ACKNOWLEDGMENTS

The Board of Directors wishes to place on record its appreciation for the commitment,
dedication and hard work done by the employees of the Company and the co-operation
extended by Banks, Government Authorities, Customers, Shareholders and employees of
the Company and looks forward to a continued mutual support and co-operation.

For and on behalf of the Board
DAR CREDIT & CAPITAL LTD.

Place: Kolkata Ramesh Kumar Vijay

Date: 11th June, 2025 Chairman

DIN: 00658473