To the Members,

The Board has the pleasure in presenting the 31st Annual Report and the Audited Financial Statements of the Company for the Financial Year ("FY") ended March 31, 2025.

The Company was originally incorporated on November 09, 1993, under the Companies Act, 1956, as a Private Limited Company under the name Devipura Balaji Securities & Investments Private Limited. Subsequently, the Company was converted into a Public Limited Company and renamed Devipura Balaji Securities & Investments Limited.

In pursuit of strategic expansion, the Company acquired K. K. Financial Services Private Limited on September 13, 2013, with the objective of undertaking the business of a non-banking financial institution (NBFC) without accepting public deposits. Following the said acquisition, the Company applied for a change of name and was granted a Certificate of Registration by the Registrar of Companies, Mumbai, changing its name to Purple Finance Limited, effective January 06, 2014.

In a significant development during the year, the Hon'ble National Company Law Tribunal (NCLT), Mumbai Bench, approved the Scheme of Absorption for the merger of Canopy Finance Limited with Purple Finance Limited on February 15, 2024. This merger marks an important milestone in the Company's growth trajectory and enhances its operational footprint.

Pursuant to the successful completion of the merger and in line with its strategic vision, the Company achieved a major capital markets milestone by getting listed on BSE Limited (BSE) effective June 14, 2024, and on The Calcutta Stock Exchange Limited (CSE) effective June 18, 2024 [hereinafter collectively referred to as the "Stock Exchange(s)"].

As part of our unwavering commitment to maintaining the highest standards of corporate governance, the Company has complied with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company ensures timely, accurate, and transparent disclosures to the Stock Exchange(s) and to our esteemed Shareholders. We remain resolute in our efforts to uphold all applicable SEBI Regulations and to foster investor confidence through proactive and responsible communication.

The Company is registered with the Reserve Bank of India (RBI) as a Non-Systemically Important Non-Deposit Taking Non-Banking Financial Company - Investment and Credit Company (NBFC-ND-NSI-ICC). It is engaged in the business of providing secured loans to micro and small enterprises.

These loans are typically extended for purposes such as:

• Business expansion,

• Purchase of assets,

• Construction or renovation of business or residential premises, and

• Meeting working capital requirements.

The Company's lending model is focused on promoting financial inclusion by catering to the funding needs of underserved yet creditworthy small business owners.

The Company's operations are built on three core pillars that form the foundation of its business strategy and execution:

The Company adopted a focused approach by entering the market with a single, well-defined product. This deliberate strategy enabled a faster understanding of customer needs and streamlined operational processes. As a result, the Company has successfully established a presence across five key states in India?Maharashtra, Gujarat, Madhya Pradesh, Uttar Pradesh, and Odisha?laying the groundwork for deeper market penetration and scalable expansion.

The Company has embraced technology to enhance operational efficiency and customer experience. The customer on-boarding process is fully digitalized, enabling a decisive loan approval or rejection ("go/no-go") within five hours. This agile decision-making, supported by a user-friendly interface, ensures timely and seamless service delivery to customers.

The Company has established a comprehensive risk and governance framework to support sustainable and profitable growth. A clearly defined organizational structure ensures effective planning, monitoring, and execution of daily operations, while also embedding strong risk oversight across all functional levels.

The performance of the Company for the Financial Year ended March 31,2025 is summarized below:

The Company's revenue from operations has increased from Rs.442.24 lakhs for the F.Y. 2023-24 to Rs.1472.00 lakhs for the F.Y. 2024-25. During the year under review, the Company has incurred a loss of Rs.1554.82 lakhs against the loss of Rs.761.27 lakhs for the Previous Year.

During the year under review, the Company continued to operate in an investment-led phase, which has resulted in a temporary loss-making position. Every rupee we spend today is laying the foundation for scale, sustainability, and social impact. Our investments in technology, talent, and customer acquisition are already yielding results, in stronger borrower retention, improved portfolio quality, and greater operational scalability.

We remain confident that these initiatives will yield significant long-term value for our Stakeholders and contribute meaningfully to the Company's mission and financial health.

During the year under review, the Authorised Share Capital of the Company increased from Rs. 50,60,00,000/- (Rupees Fifty Crores Sixty Lacs Only) divided into 5,06,00,000 (Five Crore Six Lac) Equity Shares of Rs.10/- (Rupees Ten Only) each to Rs. 55,60,00,000/- (Rupees Fifty-Five Crores Sixty Lacs Only) divided into 5,56,00,000 (Five Crore Fifty-Six Lac) Equity Shares of Rs.10/- (Rupees Ten Only) each.

The Issued, Subscribed and Paid-up Share Capital of the Company as on March 31,2025 was Rs. 44,81,99,390/- (Rupees Forty-Four Crores Eighty One Lacs Ninety Nine Thousand Three Hundred and Ninety Only) divided into 4,48,19,939 (Four Crores Forty Eight Lacs Nineteen Thousand Nine Hundred and Thirty Nine) Equity Shares at a face value of Rs. 10/- (Rupees Ten Only) each fully paid up. The Shareholders of the Company consist of Individuals and Body Corporates.

During the year under review, the Paid-up Share Capital of the Company has increased from Rs.33,61,49,540/- to Rs.44,81,99,390/- pursuant to issue and allotment of 1,12,04,985 Equity Shares having face value of Rs.10/- each issued at a price of Rs.40/- per Equity Share including a premium of Rs.30/- per Right Equity Share on right basis on October 16, 2024.

The Shares were issued at a ratio of 1:3 i.e., 1 (one) Equity Share having face value of Rs.10/- each for every 3 (Three) fully paid-up Equity Shares of the Face value of Rs. 10/- each held by the Eligible Equity Shareholders.

As the Company has made a loss in the Financial Year, the Board of Directors have not recommended any dividend for the year.

No amount is transferred to reserves on account of loss in the Company.

As on March 31,2025, the Company was operating through a network of 32 (thirty two) branches across Maharashtra, Gujarat, Madhya Pradesh, Uttar Pradesh and Odisha, enabling a strong and growing presence in its chosen geographies. The Company focuses on providing small-ticket loans backed by self-occupied residential or commercial properties, addressing the credit needs of borrowers with limited access to formal financial services.

As on March 31, 2025 the Company has on boarded approximately 1849 retail customers and employed 334 personnel. The Company continues to leverage technology as a key enabler across its operations. By partnering with third-party technology providers, the Company has implemented advanced platforms for customer onboarding, credit underwriting, and loan disbursement. These systems are fully operational and have enhanced the Company's speed to market, agility in customer acquisition and overall portfolio monitoring capabilities.

The technology infrastructure is built with controls to safeguard customer data and ensure operational resilience. In parallel, the Company has adopted a Human Resource Management Software (HRMS) to effectively monitor, engage, and support its employees across the branch network.

To ensure the integrity of its lending operations, the Company has established strong risk management practices and fraud control frameworks aimed at minimizing credit and operational risks.

Pursuant to the Scheme of Absorption of Canopy Finance Limited, two legacy loan accounts amounting to Rs. 7.34 lakhs which were recognized as Non-Performing Assets (NPAs) and transferred to the Company's books as on 31 March, 2024 was recovered from the borrower during the year. As on 31 March, 2025 the Company has AUM of Rs. 103.05 crores and recognized Rs. 61.32 lakhs as NPAs which remains outstanding as on the date of this report. The Company is actively pursuing recovery of the outstanding dues.

The Company remains committed to upholding the highest standards of corporate governance through well-defined internal policies, compliance practices, and ethical conduct across all levels of the organization.

The Company confirms that there has been no change in its business activities during the Financial Year. The operations have remained aligned with the objectives set forth in the Company's Memorandum of Association.

In today's dynamic and highly competitive business environment, having a well-defined risk mitigation strategy is critical to achieving the Company's growth objectives. The Company acknowledges that risk is an inherent component of any business activity and remains committed to managing risks in a proactive, structured and efficient manner.

To this end, the Company has implemented a comprehensive Risk Management System, supported by a framework of clearly articulated policies and robust internal monitoring mechanisms. This framework is designed to ensure long-term business sustainability, operational stability, and timely identification and mitigation of risks across all functional areas.

The Risk Management framework promotes a culture of proactive risk awareness and accountability. It enables the Company to evaluate potential risks in a timely manner and to implement appropriate mitigation strategies. The objective is to establish a structured and disciplined approach to risk identification, assessment, monitoring, and resolution, thereby supporting informed decision-making at all levels.

Through this integrated risk management approach, the Company seeks to safeguard stakeholders' interests and strengthen its ability to respond to emerging challenges while continuing on its path of sustainable growth.

The Company acknowledges that risk is an inherent component of any business activity and remains committed to managing risks in a proactive, structured, and efficient manner.

The Company is exposed to specific risks that are intrinsic to its business model and the broader environment in which it operates. These include:

• Market Risk: The Company does not invest in market instruments therefore has limited exposure to market risk.

• Credit Risk: Credit risk arises from the potential default or failure of borrowers to meet their financial obligations, including the repayment of principal and interest. It represents a key area of focus for the Company, as non-recovery of loans can lead to financial loss and impact overall portfolio quality. The Company has instituted a robust credit appraisal and approval process with appropriate risk oversight mechanisms. Client selection is governed by well-defined criteria, and each borrower's repayment capability is rigorously assessed. A significant portion of the Company's loan book is secured against self-occupied residential or commercial properties. These assets are independently valued, and a conservative Loan-to-Value (LTV) ratio is maintained, thereby significantly mitigating the risk of non-recoverability in the event of a default. To proactively monitor credit quality and identify early signs of portfolio stress, the Company proposes to implement advanced analytical tools including portfolio analytics, bounce rate analysis, month-on-book analysis, early vintage performance tracking, and net flow forward analysis. These indicators will enable the Company to detect adverse trends in a timely manner. Findings from these analytics will be periodically reviewed by the senior management and the Risk Management Committee. Where necessary, corrective actions will be undertaken to safeguard asset quality and maintain a stable risk profile.

• Liquidity and Interest Rate Risk: The Company is exposed to liquidity risk primarily due to the potential mismatch between the maturity profiles of its lending and investment activities and the timing of its funding sources. This risk arises when the Company is unable to meet its short-term financial obligations due to an imbalance in cash inflows and outflows. To manage liquidity risk effectively, the Company adopts a prudent approach to resource management. The Company also maintains a balance between short-term and long-term funding to ensure liquidity requirements are met without compromising on business growth. Furthermore, the Company continually assesses its cash flow needs and adjusts its financing strategies to ensure stability and financial resilience.

• Regulatory Risk: As a financial services entity, the Company is subject to stringent regulations imposed by various Indian governmental authorities, including the Reserve Bank of India (RBI). These regulations include, but are not limited to, asset classification, capital adequacy requirements, solvency standards, and liquidity norms, all of which govern the Company's operations and financial stability. Changes in the regulatory environment or in the enforcement of existing laws could have a material impact on the Company's performance. The Company is vigilant about potential shifts in the regulatory landscape, as such changes could affect its ability to comply with prescribed requirements or require significant adjustments in its operational strategy. It is important to note that the entire financial services sector is sensitive to such regulatory risks. Any adverse regulatory changes or increased enforcement would not be isolated to the Company but could affect all industry players, thereby influencing market conditions, business practices, and financial results across the sector.

• Macro-economic Risk: The Company's growth is subject to external macroeconomic conditions, including unfavorable economic environments, political instability, and changes in government policies. A slowdown in the Indian economy, particularly in the financing and lending sector, could adversely affect the Company's business operations and performance. While the Company acknowledges that such macroeconomic challenges may impact its growth trajectory, it also recognizes that the rural economy, which forms a significant part of its target

• Operational Risk: The Company is exposed to various operational risks arising from factors such as human resources, internal controls, processes, technology, infrastructure, and other external influences. These risks can impact the Company's ability to deliver services efficiently and effectively, thereby affecting overall business performance. To mitigate these operational risks, the Company has implemented a 'maker-checker' rule across all key processes, ensuring that all actions are subject to dual verification for accuracy and compliance. In addition, the Risk Management Committee closely monitors operational processes to identify and address potential risks in a timely manner. The Company is committed to continuously strengthening its risk management framework, internal controls, and portfolio quality. By doing so, it aims to enhance operational efficiency, reduce the likelihood of errors, and build a stable and resilient business franchise.

Access to capital and funding, both in the short term and long term, as well as managing asset-liability mismatches, are key challenges faced by all players in the Non-Banking Financial Company (NBFC) sector, regardless of their size. Managing growth while maintaining asset quality is another ongoing challenge that impacts the sector as a whole.

Your Company is no exception to these challenges. However, we continue to address them through a strong focus on investment in people, processes, technology, and systems. Our approach includes robust credit underwriting processes, early warning checks, and comprehensive portfolio analytics to minimize portfolio delinquency and ensure asset quality remains intact.

These ongoing efforts are aimed at maintaining a balance between growth and risk mitigation, ensuring that the Company remains on a sustainable growth path without compromising financial stability or customer trust.

The Management has established a comprehensive set of standards, processes, and organizational structures to implement effective internal financial controls across the Company, particularly with respect to the preparation and accuracy of financial statements. These controls are designed to be adequate and are operating effectively to ensure transparency, compliance, and operational efficiency.

The Company has developed and maintained a system of internal financial controls that is commensurate with the nature and size of its business operations. This system is intended to meet the following objectives:

• Ensuring the effectiveness and efficiency of operations, minimizing risks and optimizing performance.

• Efficient use and safeguarding of resources, protecting the Company's assets and ensuring that they are used appropriately.

• Ensuring compliance with internal policies, procedures, and applicable laws and regulations, thereby reducing regulatory and legal risks.

• Accurate and timely recording and reporting of transactions, ensuring the integrity and reliability of financial information.

• Monitoring expenditures and operations against budgeted amounts, with a budgetary control system that allows for ongoing review and timely corrective action if required.

Through these measures, the Company ensures that its financial operations are conducted with the highest standards of integrity, control, and transparency, providing a strong foundation for sustainable growth and risk management.

The provisions of the Companies Act, 2013 for CSR are not applicable to the Company for the FY 2024-25.

The Company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC) under the category of NBFC-ND-NSI, classified as an ICC (Investment and Credit Company). The Company has consistently complied with all applicable laws, rules, circulars, and regulations governing its operations. This includes adherence to the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 ("RBI Master Directions"), as amended from time to time.

As per the RBI Master Directions, the Company is categorized as a Base Layer NBFC and fully complies with the prescribed norms for such entities. This includes meeting the regulatory requirements set forth by the RBI for capital adequacy, asset classification, and other prudential norms to ensure sound financial health and operational sustainability.

The Company remains committed to maintaining the highest standards of regulatory compliance and continuously monitors developments in RBI regulations to ensure ongoing adherence.

The details of Loans and Investments and Guarantees covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements forming part of Annual Report.

The Board of the Company has been duly constituted in accordance with the provisions of the Companies Act, 2013. At the end of the Financial Year, the Company comprises of the following Directors:

$The Board of Directors on the recommendation of the Nomination and Remuneration Committee and subject to the approval of the Shareholders have recommended:

a. Re-appointment of Mr. Amitabh Chaturvedi (DIN: 00057441) as the Executive Chairman and Executive Director of the Company for a period of 5 (five) years from March 22, 2025 till March 21, 2030.

b. Re-appointment of Mr. Rajeev Deoras (DIN: 02879519) as the Executive Director of the Company for a period of 3 (three) years from July 01, 2025 till June 30, 2028.

*Mr. Rajan Bhat has been appointed as an Additional Director designated as Independent Director of the Company on April 09, 2025 and shall be appointed as an Independent Director of the Company subject to the approval of the Shareholders in the Annual General Meeting of the Company.

#Mr. Sabyasachi Rath has been proposed to be appointed as an Additional Director designated as Executive Director on April 09, 2025, subject to the approval of the Reserve Bank of India.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations).

In compliance with Companies Act, 2013 and pursuant to the Articles of Association of the Company, Mrs. Minal Amitabh Chaturvedi, Non- Executive Director retires by rotation and being eligible has offered herself for re-appointment. The Board recommends the same for the approval of the Shareholders.

The necessary resolution for re-appointment of Mrs. Minal Amitabh Chaturvedi forms part of the Notice convening the Annual General Meeting. The profile and particulars of experience that qualify Mrs. Minal Amitabh Chaturvedi for Board membership, are disclosed in the said Notice.

The Board of Directors of the Company meets at regular intervals to review and discuss the Company's business policy, strategy, and other key matters concerning its operations. In addition to the strategic discussions, the Board ensures strong operational oversight through regular presentations and updates in its quarterly meetings.

To facilitate effective participation and preparation, all Board and Committee meetings are pre-scheduled well in advance, allowing Directors to plan their schedules accordingly. In cases of special or urgent business, the Board's or Committee's approval may be sought through resolutions passed by circulation, or by calling meetings at short notice, as permitted by law.

The agenda for each Board and Committee meeting is comprehensive and includes detailed notes on the items to be discussed, enabling Directors to make well-informed decisions during the meetings.

During the Financial Year 2024-25, the Board of Directors met 9 (Nine) times, and the gap between meetings did not exceed 120 days, in compliance with the relevant provisions of the Companies Act, 2013, and the rules made thereunder. The details of the Board Meetings, along with the attendance of Directors, can be found in the Corporate Governance Report, which forms part of this Annual Report.

As required under the Act, the SEBI LODR Regulations and RBI Master Directions, the Company has constituted the following statutory committees:

1) Audit Committee

2) Nomination and Remuneration Committee

3) Stakeholders Relationship Committee. The Company also has certain non-mandatory committees viz. Finance Committee and Risk Management Committee. Details of all the statutory committees such as terms of reference, composition and Meetings held during the year under review are provided in the Report on Corporate Governance which forms part of this Annual Report.

In addition to the above, the Company has Committee of Executives' viz. Management Committee, Information Technology (IT) Committee, Human Resource (HR) Executive Committee, Executive Risk Management Committee, Asset Liability Management Committee and Operations Management Committee to review specific business, operational matters and other items that the Board may decide to delegate.

In accordance with the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by the SEBI LODR Regulations, the Board of Directors has conducted its annual evaluation of the performance of the Board, its Committees, and Individual Directors. The evaluation process involved seeking inputs from all Directors and Committee Members, as applicable, to ensure a comprehensive and fair assessment.

The criteria for the evaluation process were developed in consultation with and as approved by the Nomination and Remuneration Committee. The evaluation of the Board as a whole was based on key parameters such as:

• Board Structure;

• Board Meetings and Frequency;

• Board Functions and Effectiveness;

• Board and Management Interaction.

The evaluation of Individual Directors focused on factors including:

• Knowledge and Competency;

• Fulfilment of Roles and Responsibilities;

• Ability to Collaborate and Function as Part of a Team.

For Board Committees, the evaluation covered areas including:

• Mandate and Composition;

• Effectiveness and Contribution of the Committee;

• Committee Structure and Meeting Frequency.

In the opinion of the Board, the Independent Directors possess integrity and bring a wealth of relevant expertise and experience to the Company, including their proficiency in corporate governance, strategy, risk management, and compliance.

A separate meeting of the Independent Directors without the presence of the Chairman or other Non-Independent Director(s) or any other Management Personnel was held on Thursday, March 20, 2025.

The Independent Directors of the Company conducted a thorough review of the performance of the Non-Independent Directors, the Committees of the Board, and the Board as a whole. This evaluation also included an assessment of the performance of the Chairman of the Company.

Additionally, the Independent Directors assessed the quality, quantity, and timeliness of the flow of information between the Management and the Board, ensuring that the necessary information is provided to enable the Board to effectively and reasonably discharge its duties.

This review process ensures that the Board operates in a transparent, accountable, and effective manner, fostering strong governance practices and informed decision-making at all levels.

In accordance with the applicable provisions, the Board of Directors have adopted a Nomination and Remuneration Policy ("NRC Policy").

The NRC Policy plays a crucial role in developing the competency requirements of the Board, based on the Company's industry, strategy, and long-term objectives. The Committee recommends the reconstitution of the Board, as and when necessary, to ensure alignment with the Company's evolving needs.

In line with its responsibilities, the NRC Policy also emphasizes the importance of appointing Directors who have an exemplary personal and professional reputation. The Committee conducts thorough reference checks and due diligence on all potential Directors before recommending them to the Board for appointment. Additionally, the NRC Policy ensures that new Directors are well-acquainted with the operations of the Company and strives to provide relevant training to keep them informed about the Company's strategies, operations, and governance frameworks.

Furthermore, the NRC Policy extends to the Directors, Key Managerial Personnel (KMPs), and all other employees of the Company. The policy is aligned with the Company's broader commitment to fostering a culture of leadership built on trust, accountability, and performance. It aims to ensure that the compensation levels for Directors, KMPs, and all employees are fair, reasonable, and competitive, enabling the Company to attract, retain, and motivate top talent necessary for its success.

The salient features of the Remuneration Policy, inter alia, include:

• Independent Directors and Non-Executive Directors: Remuneration, in the form of sitting fees and commission, is paid to Independent Directors and Non-Independent Non-Executive Directors in accordance with the provisions of the Companies Act, 2013 and as approved by the Nomination and Remuneration Committee (NRC) and the Board.

• Executive Directors, KMPs, and Employees: Remuneration to the Executive Directors, Key Managerial Personnel (KMPs), and all other employees is designed to be reasonable and sufficient to attract, retain, and motivate competent individuals for key roles. The remuneration structure is aligned with industry standards and comprises a defined mix of fixed and performance-linked components.

• Remuneration for Professional Services: No additional remuneration is payable to Directors for services rendered in any other capacity unless such services are of a professional nature, and the NRC/Board is satisfied that the concerned Director possesses the requisite qualification. Where required, prior approval from the Central Government is obtained for such payments.

In addition to the above, the Company has adopted a 'Fit and Proper' Policy in accordance with the RBI Master Direction - Non-Banking Financial Company - Scale Based Regulation Directions, 2023, for evaluating the 'fit and proper' status of Directors at the time of their appointment and on a continuing basis. This policy ensures that Directors meet the prescribed integrity, competence, and financial soundness criteria, thereby reinforcing prudent governance practices. The NRC Policy is available on the website of the Company at https://www.purplefinance.in/policies/

Your Company is committed to upholding the highest standards of corporate governance, which is integral to sustaining long-term stakeholder trust and value creation. In line with this commitment, the Company has adopted a comprehensive Corporate Governance Code, which sets out detailed guidelines and governance practices to be followed in the decision-making processes across the organization.

We consider it our fundamental responsibility to ensure timely and accurate disclosure of information relating to the Company's operations, financial performance, leadership, and governance framework. Transparency, accountability, and ethical business conduct are the cornerstones of our governance philosophy.

Pursuant to the SEBI LODR Regulations, 2015, the following have been provided as part of this Annual Report:

• Management Discussion and Analysis Report; and

• Corporate Governance Report.

In addition, a Certificate from M/s VKMG & Associates LLP, Practicing Company Secretaries, confirming compliance with the conditions of Corporate Governance as prescribed under the SEBI LODR Regulations, is annexed to this Report.

The provisions of Regulation 34(2)(f) of the SEBI LODR Regulations are not applicable to the Company.

In accordance with the resolution passed by the Shareholders of the Company at the Annual General Meeting held on September 17, 2022, the Company is authorized to make performance-based variable payments to Mr. Amitabh Chaturvedi, Executive Chairman and Executive Director of the Company, upon the achievement of certain key performance milestones by the Company. These milestones include:

• Net Worth reaching Rs.800 Crores;

• Gross Advances reaching Rs.2,500 Crores; and

• Profit Before Tax (PBT) reaching Rs.100 Crores.

The variable compensation payable is linked to the market performance of the Company's equity shares. Specifically, the variable pay shall be computed as the difference between the last traded price of the Company's equity shares in the immediate preceding financial year and a base price of Rs.33/-, multiplied by 8,00,000 equity shares allocated for this purpose.

The total amount thus determined shall be disbursed in three equal annual instalments, subject to a maximum limit of Rs.10 Crores per instalment.

Additionally, in line with the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on February 29, 2024 has approved that an incentive of Rs.25,00,000 (Rupees Twenty-Five Lakh Only) is payable to Mr. Amitabh Chaturvedi upon successful completion of fund raising of Rs.80 crore, in recognition of his contribution, as he is not eligible for ESOPs.

Furthermore, the Company had allocated 1,00,000 ESOPs each to Mr. Rajeev Deoras, Executive Director and Mr. Sabyasachi Rath, Chief Executive Officer on February 29, 2024. However, pursuant to the Order dated February 15, 2024, passed by the Hon'ble National Company Law Tribunal (NCLT), Mumbai Bench, approving the Scheme of Merger by Absorption of Canopy Finance Limited by Purple Finance Limited ("Reverse Merger"), all existing shareholders, excluding AIFs, were reclassified under the Promoter Group, including Mr. Rajeev Deoras and

Mr. Sabyasachi Rath. As per the Companies Act, 2013 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, members of the Promoter Group are not eligible to receive ESOPs. Consequently, the grant of ESOPs to Mr. Deoras and Mr. Rath were cancelled, as noted in the NRC meeting held on October 25, 2024. In recognition of their significant contributions to the Company's growth, and in line with the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its Meeting held on April 21,2025, has approved a cash compensation equivalent to the value of the cancelled ESOPs, amounting to Rs.48,73,000/- each. This value is computed based on 1,00,000 shares, multiplied by the closing price of Rs. 48.73 as on April 17, 2025 (Thursday), totalling to Rs.48,73,000/-. The compensation will be disbursed in three equal annual instalments as follows: Rs.16,24,000/- post completion of the proposed Rights Issue, Rs.16,24,000/- one year from the first instalment, and Rs.16,24,000/- two years from the first instalment.

The Company has received the declarations from all the Independent Directors as per Section 149(7) of the Act and Regulation 16 (1) (b) of the SEBI LODR Regulations and the Board is satisfied that all the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Act and Regulation 16 (1) (b) of the SEBI Listing Regulations. Further, declaration on compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended by Ministry of Corporate Affairs ("MCA") vide its Notification dated October 22, 2019, regarding the requirement relating to enrollment in the data bank created by MCA for Independent Directors, had been received from all Independent Directors.

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 Board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company and the audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by the Management and the relevant Board Committees, the Board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2024-25.

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts for the Financial Year ended March 31,2025, the applicable accounting standards have been followed and there are no material departures;

b. they 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 at the end of the Financial Year and of the profit of the Company for that period;

c. they 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. they have prepared the Annual Accounts for the Financial Year ended March 31,2025 on a going concern basis;

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

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

Pursuant to the provisions of Section 203 of the Act, Mr. Sabyasachi Rath, Chief Executive Officer, Ms. Meghana Lale, Chief Financial Officer and Ms. Ruchi Nishar, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company.

During the year under review, Ms. Sonal Vira has resigned from the post of Chief Financial Officer of the Company w.e.f. February 03, 2025 and Ms. Meghana Lale has been appointed as the Chief Financial Officer of the Company w.e.f. February 03, 2025.

The Company has established a Vigil Mechanism for its Directors and Employees to report their concerns or grievances. The said mechanism, inter alia, encompasses the Whistle Blower Policy, the mechanism for reporting of ethical concerns and it provides for adequate safeguards against victimization of persons who use it. The Policy is available on the website of the Company http://www.purplefinance.in.

The Company is committed to providing and promoting a safe and healthy work environment for all its employees. A 'Prevention of Sexual Harassment' Policy, which is in line with the statutory requirements, along with a structured reporting and redressal mechanism, including the constitution of Internal Complaints Committee in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("the POSH Act"), is in place.

During FY 2024-25, under the provisions of the POSH Act, no complaints were received.

M/s. Jogin Raval & Associates, Chartered Accountants (FRN: 128586W) were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on May 15, 2023 of the Company to hold office till the conclusion of the Annual General Meeting of the Company for the Financial Year 2027-28. M/s. Jogin Raval & Associates, Chartered Accountants have provided the financial statements of the Company for the Financial Year 2024-25 which forms part of this Annual Report. The Statutory Auditors have submitted an unmodified opinion on the audit of financial statements for the Financial Year 2024-25 and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The Auditor report is self-explanatory and there is no observation, qualification or adverse remarks or disclaimer made by the Auditor in their report.

In terms of Section 204 of the Act and Rules made there under, VKMG & Associates LLR Company Secretaries, has been appointed as the Secretarial Auditor of the Company. The report of the Secretarial Auditor for the Financial Year 2024-25 is enclosed as Annexure IV to this report.

The report is self-explanatory, and wherever there are qualifications or adverse remarks, the management has provided suitable explanations and responses.

Further, the Company has received certificate of Non- Disqualification of Directors from VKMG & Associates LLR! Company Secretaries. The same is enclosed as Annexure V to this report.

There have been no material changes or commitments that could affect the financial position of the Company between the end of the Financial Year to which the Financial Statements relate and the date of this report.

During the year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in future.

In compliance with SEBI (Delisting of Equity Shares) Regulations, 2021, the Board of Directors in their Meeting held on October 25, 2024 have approved the voluntary delisting of the Equity Shares of the Company from CSE. The Company has further applied for voluntary delisting of the Equity Shares of the Company to CSE and the application is still pending for approval.

All contracts or arrangements or transactions entered by the Company with the Related Rarties during the Financial Year were in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. All such contracts or arrangements, were entered into in the ordinary course of business and at arm's length basis and approved by the Audit Committee.

The details of the Material Related Party Transactions are mentioned in the Form AOC-2 as Annexure III which forms part of this Annual Report.

The Related Party Transactions policy is available at the website of the Company at https://www.purplefinance.in/policies/.

Conservation of energy, technology absorption is not applicable as the Company is not engaged in the manufacturing activity. No foreign exchange was earned during the period.

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid in the year under review.

There were no instances of frauds during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or the Board under Section 143(12) of the Act and the rules made thereunder.

In accordance with the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the companies are required to publish a copy of the Annual Return on its website. The Extract of Annual Return is available on our website www.purplefinance.in.

The Company is registered with Reserve Bank of India ("RBI"), as a non-deposit accepting NBFC ("NBFC-ND-NSI") under Section 45-IA of the RBI Act, 1934. As per Non-Banking Finance Companies RBI Directions, 1998, the Directors hereby report that the Company did not accept any public deposits during the year and did not have any public deposits outstanding at the end of the year.

The Board of Directors has formulated the several policies which are available on website of the Company www.purplefinance.in.

The Company does not have any Subsidiaries, Joint Ventures and Associate Companies as on March 31, 2025.

During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

The Company currently has implemented the "Purple Finance ESOP Scheme 2022" wherein Stock options are granted to the eligible employees and KMPs of the Company. The details of the Employee Stock Option Scheme as per Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are as follows:

KMP includes managerial personnel as per Companies Act, 2013 only.

Disclosure in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is forming part of this annual report which is available on the website of the Company at the following link:

Annual Report 2024-25

The statement containing particulars of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available at the registered office of the Company. The said statement is open for inspection at the registered office of the Company. Any member interested in obtaining these particulars will be provided with the same, upon receipt of a written request delivered at the registered office of the Company.

During the year, no application was made or any proceeding was pending under the Insolvency and Bankruptcy Code, 2016 during the year ended March 31, 2025.

Your Company regards its human capital as one of its most valuable assets. We are committed to creating a work environment that fosters professional growth, innovation, and performance excellence. Accordingly, the Company continues to invest in talent acquisition, development, and retention through structured initiatives and employee engagement programs.

Recognizing that a capable and motivated workforce is fundamental to sustainable growth, the Company follows a philosophy of recruiting the most suitable talent for each role, empowering them with the necessary tools and authority to perform, and providing a conducive environment for learning and career progression.

A well-defined on boarding and induction process is in place, facilitated through a comprehensive Human Resource Management System (HRMS). This system ensures a seamless experience for new employees and supports the management of various HR functions digitally and efficiently.

The Company places strong emphasis on continuous learning and development. Regular training programs are conducted across various verticals such as customer service, credit underwriting, collections, business processes, and compliance, ensuring that employees are well-equipped to meet evolving business and regulatory requirements. As on March 31, 2025, the Company had 335 permanent employees, all of whom play a pivotal role in achieving the organization's strategic goals.

i. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

ii. There are no instances of fraud reported by the Auditors under Section 143(12) during the financial year ended March 31,2025.

iii. The Company has not issued any shares with differential voting rights as per the Act.

iv. The Company has not issued any sweat equity shares under the Act.

v. There were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

vi. The Company has not accepted any fixed deposits and no amount of principal or interest is outstanding during the year ended 31st March, 2025.

The Board of Directors places on record its sincere appreciation and gratitude to all business associates, lenders, shareholders, consultants, and various regulatory and government authorities for their continued trust, support, and guidance.

The Board also extends its heartfelt thanks to the executive team, employees, and staff of the Company for their dedicated efforts, commitment, and contribution throughout the year, which have been instrumental in driving the Company's progress and performance.