TO,

THE MEMBERS,

BFL ASSET FINVEST LIMITED

The Board of Directors are pleased to present the 28^th (Twenty-Eight) Annual Report of your Company on the business, operations and state of affairs of the Company together with the Audited Financial

Statements and the Auditor' Report for the Financial Year ended on March 31, 2023.

1. FINANCIAL HIGHLIGHTS

The highlights of Company's financial performance for the Financial Year ended on March 31, 2023 are summarized below:

2. PERFORMANCE REVIEW AND STATE OF COMPANY'S AFFAIRS

The Company's main business is dealing in shares, securities, futures and options.

The total income for the FY 2022-23 under review was Rs. 1,49,69,845/- (Rupees One Crore Forty-Nine Lakh Sixty-Nine Thousand Eight Hundred and Forty-Five only) as against Rs. 3,10,83,900/- (Rupees Three Crore Ten Lakh Eighty-Three Thousand and Nine Hundred Only) in the previous FY 2021-22. The Profit before tax for the FY 2022-23 is Rs. 15,21,638/- (Rupees Fifteen Lakh Twenty One Thousand Six Hundred and Thirty-Eight Only) as against Rs. 91,44,941/- (Rupees Ninety One Lakh Forty Four Thousand Nine Hundred and Forty One Only) in the previous FY 2021-22. The Profit after tax for FY 2022-23 is Rs. 36,66,483/- (Rupees Thirty-Six Lakh Sixty Six Thousand Four Hundred and Eighty-Three Only) as against 68,56,660/- (Rupees Sixty-Eight Lakh Fifty Six Thousand Six Hundred and Sixty Only) in the previous FY 2021-22.

The Company is dealing in shares and stock trading which is unforeseen, in terms of performance of the Industries, economic scenario, GDP Growth of the Country, Government policies, political situation and global trends etc.

The creditable performance of your Company brings out the resilience of its business model and at the same time highlights its ability to move swiftly in tough conditions. It also underscores the trust and confidence of its members which is a crucial differentiator and contributes immensely to your Company's performance in these uncertain times.

3. TRANSFER TO RESERVE FUND

Reserve and Surplus Account as on March 31, 2023 of your Company increased by 21.57% to Rs. 2,05,90,421/- (Rupees Two Crore Five Lakh Ninety Thousand Four Hundred and Twenty-One Only) as against Rs. 1,69,37,151/- (Rupees One Crore Sixty-Nine Lakh Thirty-Seven Thousand One Hundred and Fifty-One Only) as on March 31, 2022.

Under Section 45IC of the Reserve Bank of India Act, 1934, Non-Banking Financial Companies (NBFCs) are required to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any dividend. Accordingly, the Company has transferred a sum of Rs. 7,33,297/- (Rupees Seven Lakh Thirty-Three Thousand Two Hundred and Ninety-Seven Only) to its reserve fund.

The Board of the company does not propose to transfer any amount to the General Reserve for the financial year under review.

4. DIVIDEND

The Board of Directors did not recommend any dividend on equity shares for the FY 2022-23 and decided to plough back the profits in order to fulfil the long-term requirements and enhancing the growth of business.

5. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY/CHANGE IN THE NATURE OF THE BUSINESS

There were no material changes and commitment that have occurred between the closure of the Financial Year 2022-23 till the date of this Report, which would affect the financial position of your Company. There is no change in the nature of the business as compared to the immediately preceding Financial Year.

6. CHANGES IN SHARE CAPITAL, IF ANY

During the financial year under review there has been no change in the structure of share capital of the Company. Details are as follows:

7. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND.

In terms of Section 124 and Section 125 of the Companies Act, 2013 (hereinafter referred as "Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, dividends which remains unpaid or unclaimed for a period of 7 (seven) years from the date of transfer to unclaimed dividend account are required to be transferred to the Investors Education and Protection Fund. There were no unclaimed/unpaid dividend liable for transfer to the Investors Education and Protection Fund for the reporting Financial Year under review.

8. ANNUAL RETURN

In accordance with the provisions of Companies (Amendment) Act, 2017, read with Section 134(3) and 92 (3) of the Act, the draft Annual Return of the Company as on March 31, 2023, as prescribed in the Form MGT-7 is hosted on the website of the Company and can be accessed at https://www.bflfin.com/wp-content/uploads/2023/08/11.-Annual-Return_BFL_31.03.2023.pdf.

9. ASSOCIATE COMPANIES, JOINT VENTURES AND SUBSIDIARY COMPANIES

The Company does not have any subsidiary, associate and Joint Venture as on March 31, 2023. Hence, the details of this clause are not applicable to the Company.

During the year under review, following changes took place in the Composition of Board of Directors and Key Managerial Personnel of the Company:

BOARD OF DIRECTORS

In accordance with the provisions of the Act and the rules made there under and the Articles of Association of the Company and on the recommendation of Nomination and Remuneration Committee, Mr. Mahendra Kumar Baid, (DIN: 00009828) Managing Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting (‘AGM') and being eligible, has offered himself for re-appointment.

Mr. Aditya Baid, (DIN: 03100584) Non-Executive Director, retired by rotation and was re-appointed in the previous AGM held on September 20, 2022.

B. Appointment of Non-Executive Director:

Mrs. Alpana Baid (DIN: 06362806) was appointed as Additional Director (Promoter Director, Non-Executive) w.e.f. June 30, 2022 later she was appointed as Promoter Director (Non-Executive) in the previous Annual General Meeting held on September 20, 2022.

(i) On the basis of report of performance evaluation, done by Nomination and Remuneration Committee and Board of Directors of the Company which was found satisfactory and after considering his integrity, expertise and experience, Mr. Kuldeep Jain (DIN: 08189540) has been re-appointed as Independent Director of the Company for a Second term of 5 (five) years w.e.f. August 09, 2023 up to August 08, 2028 by the members at the 27^th Annual General Meeting of the Company held on September 20, 2022.

D. Re-appointment of Managing Director:

Mr. Mahendra Kumar Baid (DIN: 00009828) was appointed as Managing Director of the Company for a period of 3 years with effect from July 28, 2020 and his present term is concluding on July 27, 2023.

Mr. Mahendra Kumar Baid possess appropriate skills, experience and knowledge; inter alia, in the field of securities and finance sector, and he is eligible for re-appointment. His vast experience and association would be of immense benefit to the Company and it is desirable to continue to avail his service. Your Board believes his re- appointment will benefit the Company.

After evaluating the eligibility criteria under the Act and Listing Regulations, your Board recommends the re-appointment of Mr. Mahendra Kumar Baid as Managing Director of the Company for a further period of 3 years from July 28, 2023 to July 27, 2026.

Detailed profile of Mr. Mahendra Kumar Baid pursuant to Schedule V to the Companies Act, 2013, Regulation 36 (3) of Listing Regulations and relevant provisions of Secretarial Standard on General Meetings is furnished as Annexure 1 and 2 to the notice calling Annual General Meeting of members of the Company

Noting with deep condolence sad and sudden demise of Late. Sobhag Devi Baid, (DIN: 00019831) Non-Executive Director of the Company on May 16, 2022. The Board appreciated the valuable services rendered by her during her tenure as a director of the company from August 31, 2005 to May 16, 2022.

The Senior Managerial Personnel of the Company as on March 31, 2023 are as follows:

G. Changes in Key Managerial Personnel:

Mrs. Surbhi Rawat, Company Secretary and Compliance Officer of the Company had resigned and relived from her services with effect from October 31, 2022. Consequent to her resignation, Ms. Ilma Suza was appointed as Company Secretary and Compliance Officer of the Company with effect from February 10, 2023.

Board Composition of the Company is available on the Company's website and can be accessed at https://www.bflfin.com

None of the Directors of the Company is disqualified in accordance with Section 164 of the Act. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act and Listing Regulations.

Also, as per the Listing Regulations, the Company has received Certificate from M/s. V.M. & Associates, Practicing Company Secretaries that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such other statutory authority.

The Company has received necessary declarations from each of the Independent Director of the Company that they meet the criteria of independence as provided under section 149(6) of the Act, and complied with the Code of Conduct as prescribed in the Schedule IV of the Act, as amended from time to time and Regulation 16 and 25 of Listing Regulations in respect of their position as an "Independent Director" of

BFL Asset Finvest Limited.

Further, pursuant to the provisions of the Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 and sub rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors are registered with the Databank maintained by the Indian Institute of Corporate Affairs (IICA). With regard to proficiency of the Independent Directors, ascertained from the online proficiency self-assessment test conducted by the IICA, as notified under sub section (1) of Section 150 of the Act,

Mr. Amit Kumar Parashar (DIN: 07891761) Non-Executive and Independent Director has successfully qualified the online proficiency self-assessment test for Independent Director's Databank on June 06,

2022.

Mr. Kuldeep Jain (DIN: 08189540) Non-Executive and Independent Director has successfully qualified the online proficiency self-assessment test for Independent Director's Databank on June 14, 2022.

Further, as per proviso to sub-rule (4) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rule, 2014, Mr. Puneet Kumar Gupta (DIN: 00019971) Non-Executive and Independent Director is not required to pass online proficiency self-assessment test as he has been acting as an Independent Director in a BSE Listed Company i.e. BFL Asset Finvest Limited for a period of more than 3 years.

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

In the opinion of the Board, the Independent Directors of the Company fulfill the conditions specified in the Act and Listing Regulations and have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and are independent of the management.

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations, or other applicable laws.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on appointment and remuneration of Directors, Key Managerial Personnel and Senior Managerial Personnel including criteria for determining qualifications, positive attributes, independence of a Director and other matters as mandated under Section 178 (3) of the Act, and Regulation 19 read with Part D of Schedule II of the Listing Regulations.

The objective of this Policy is to serve as a guiding charter to appoint qualified persons as directors on the board of directors of the Company ("Directors"), Key Managerial Personnel (the "KMP"), persons who may be appointed in senior management positions ("SMP"), to recommend the remuneration to be paid to them and to evaluate their performance.

The Nomination and Remuneration Policy, approved by the Board is available on the website of the Company, the same can be accessed at https://www.bflfin.com/wp-content/uploads/2018/02/Nomination-and-Remuneration-Policy_Website.pdf

The salient aspects covered in the Nomination and Remuneration Policy have been outlined below:

(a) To review the structure, size and composition (including the skills, knowledge and experience) of the Board at least annually and making recommendations on any proposed changes to the Board to complement the Company's corporate strategy, with the objective to diversify the Board;

(b) To identify individuals suitably qualified to be appointed as the KMPs or in the senior management of the Company;

(c) To recommend to the Board on the selection of individuals nominated for Directorship;

(d) To make recommendations to the Board on the remuneration payable to the Directors / KMPs so appointed /reappointed;

(e) To assess the independence of independent Directors;

(f) such other key issues/matters as may be referred by the Board or as may be necessary in view of the Listing Regulations and provisions of the Act and Rules thereunder;

(g) To make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;

(h) To ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

(i) Performance Evaluation of every Director and Key Managerial Personnel.

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them 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 etc. The details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2022-23 and on Cumulative basis, in terms of the requirements of Listing Regulations are available on the website of the Company www.bflfin.com and can be accessed through the web link: https://www.bflfin.com/?page_id=19#tab-id-16

Regular meetings of the Board were held to discuss and decide on various business policies, strategies and other matters.

The Board of Directors of the Company met 5 (Five) times during the year under review. The requisite quorum was present in all the Meetings. The intervening gap between the meetings was within the period prescribed under the Act, Secretarial Standard-1 (SS-1) and the listing regulations.

Dates of the Board meetings held during the year under review are as follows:

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Board has constituted four Committees:

i.) Audit Committee ii.) Nomination and Remuneration Committee iii.) Stakeholders' Relationship Committee iv.) Risk Management Committee

The above mentioned committees are formed in compliance with the provisions of the Act and Listing Regulations and Directions issued by RBI. The Company Secretary is the Secretary of all the aforementioned Committees.

The Board of Directors also takes decisions by Resolutions passed through Circulation which is noted by the Board at their subsequent meeting.

The details of Board and Committees including composition and Meetings held during the financial year ended on March 31, 2023 and attendance thereto are set out in the Corporate Governance Report enclosed as Annexure V which forms part of this report.

A separate meeting of Independent Directors was held on May 25, 2022 without the presence of Non-Independent Directors, Members of Management and employees of the Company as required under the Act and in Compliance with requirement under Schedule IV of the Act and as per requirements of Listing Regulations and discussed matters specified therein. However, the Company Secretary and Compliance Officer of the Company, being a member of the management, attended the meeting only to facilitate convening and holding of the meeting.

The meeting was attended by all the Independent Directors of the Company.

Performance evaluation is becoming increasingly important for Board and Directors, and has benefits for individual Directors, Board and the Companies for which they work. The Securities and Exchange Board of India has issued a Guidance Note on Board Evaluation and pursuant to the provisions of the Act, the Board of Directors has carried out an annual performance evaluation of its own performance, Board Committees and individual Directors at their meeting held on May 25, 2022.

The evaluation of the performance of the Board as a whole, Individual Directors and of the Committees was carried out by way of questionnaires. In a separate meeting of Independent Directors held on May 25, 2022, performance of Non Independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the board, taking into account the views of the Executive Directors and Non-executive Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as structure and diversity of the Board, competency of Directors, experience of Director, strategy and performance, secretarial support, evaluation of risk, evaluation of performance of the management and feedback, independence of the management from the Board etc. The performance of the Committees was evaluated by the Board on the basis of criteria such as mandate and composition, effectiveness of the committee, structure of the committee and meetings, independence of the committee from the Board and contribution to decisions of the Board. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfilment of functions, availability and attendance, initiative, integrity, contribution and commitment etc., and the Independent Directors were additionally evaluated on the basis of independence, independent views and judgment etc.

The performance of the Individual Directors was evaluated by the Board on the basis of criteria such as ethical standards, governance skills, professional obligations, personal attributes etc.

Further the evaluation of Chairman of the Board, in addition to the above criteria for individual Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

The Board discussed upon the performance evaluation of every Director of the Company and concluded that they were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The summary of the feedback from the members were thereafter discussed in detail by the members. The respective Director, who was being evaluated, did not participate in the discussion on his/her performance evaluation. The Directors expressed their satisfaction with the evaluation process.

Your Company has always believed in providing safe and harassment free workplace for every individual working in its premises through various interventions and practices. The Company ensures that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a policy for Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition And Redressal) Act, 2013 (POSH Act). All women employees are covered under this policy. The requirement of constitution of Internal Complaint Committee is not applicable on the Company. The details of the complaints received during the year under review were as follows:

Pursuant to the provisions of section 139 of the Act, M/s. Khilnani & Associates, Chartered Accountants (Firm Registration No. 005776C) were appointed as the Statutory Auditors of the Company, at 25^th AGM of the Company held on September 28, 2020 for a term of five years.

Further, pursuant to Section 141 of the Act and relevant Rules prescribed there under, the Company has received certificate from the Auditors along with peer review certificate, to the effect, inter alia, that they are eligible to continue with their appointment and that they are not disqualified in any manner whatsoever from continuing as Statutory Auditors.

The Financial Statements and the Auditor's Report for the financial year ended on March 31, 2023 are free from any qualification, reservation, observation and adverse remark; further the notes on accounts are self-explanatory. The Auditors' Report is enclosed with the financial statements in this annual report.

As per Section 204 of the Act, read with rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every Listed Company is required to appoint a Secretarial Auditor to carry out Secretarial Audit of the Company.

In consonance with the aforementioned requirements, M/s V. M. & Associates, Company Secretaries (Firm Reg. No. P1984RJ039200) were appointed as Secretarial Auditors to conduct the secretarial audit of the Company for the financial year 2022-23.

Secretarial Audit Report in Form MR-1 as issued by M/s V. M. & Associates, Company Secretaries, in respect of the secretarial audit of the Company for the financial year ended on March 31, 2023, is given in Annexure-I to this Report. Secretarial Auditor provided observation in Secretarial Audit Report which are given below.

Observation(s) in Secretarial Audit Report:

Secretarial Auditor provided observation in his Secretarial Audit Report with regard to the Adjudication Order dated February 27, 2023 received from Securities and Exchange Board of India under Section 15-I of Securities and Exchange Board of India, Act read with Rule 5 of Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 and under Section 23-I of Securities Contracts (Regulation) Act, 1956 read with Rule 5 of Securities Contracts (Regulation) (Procedure for holding Inquiry and Imposing Penalties) Rules, 2005 from Adjudicating Officer, Securities And Exchange Board of India thereby imposing a penalty of Rs. 25,00,000/- (Rupees Twenty Five Lakh Only) under Section 15HA of Securities and Exchange Board of India, Act (i.e. Penalty for fraudulent and unfair trade practices) read with Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 and Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; jointly and severally on the Company and the other 2 noticees [i.e. Baid Finserv Limited (Formerly Known as "Baid Leasing and Finance Co. Ltd.") and Dream Finhold Private Limited) mentioned in the Adjudication Order.

Management Reply:

Initially the Company was in the process of filing an appeal against the said order of AO before Securities Appellate Tribunal. Later, the amount of penalty i.e. Rs. 25,00,000/- (Rupees Twenty-Five Lakh Only) which was payable jointly and severally by all or any of the Noticees i.e. your Company, Baid Finserv Limited

(Formerly Known as "Baid Leasing and Finance Co. Ltd.") and Dream Finhold Private Limited was paid in full by Co-Noticee Baid Finserv Limited (Formerly Known as "Baid Leasing and Finance Co. Ltd.").

Further, as the matter pertains to Financial Year 2016 and 2017, therefore the Board does not foresee any adverse impact on the operations/revenue and fundamentals of the company. Except this, Secretarial Audit Report was self-explanatory and does not call for any further comments.

Furthermore, In accordance with Regulation 24 A of Listing Regulations, the annual Secretarial Compliance Report issued by M/s V. M. & Associates for Financial Year 2022-23 has been submitted with the stock exchange within the period prescribed therein.

M/s. V. M. & Associates, Company Secretaries (Firm Registration Number: P1984RJ039200) have confirmed their eligibility and willingness to accept the re-appointment as Secretarial Auditor of the Company. The Company has received consent/eligibility certificates from M/s V. M. & Associates, Company Secretaries. Accordingly, Board in its meeting held on May 25, 2023 has re-appointed M/s V. M.

& Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company to carry out Secretarial Audit of the Company for the Financial Year 2023-24.

Pursuant to Section 138 of the Act, read with Companies (Audit and Auditors) Rules, 2014, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors to carry out Internal Audit of the Company.

In consonance with the aforementioned, M/s Shiv Shankar Khandelwal & Co., (Firm Registration No. 006852C), Chartered Accountants, were appointed as Internal Auditors of the Company for the financial year 2022-23.

M/s. Shiv Shankar Khandelwal & Co., Chartered Accountants (Firm Registration No. 006852C) have confirmed their eligibility and willingness to accept the re-appointment. The Company has received consent/eligibility certificates from M/s. Shiv Shankar Khandelwal & Co., Chartered Accountants. Accordingly, Board in its meeting held on May 25, 2023 has re-appointed M/s Shiv Shankar Khandelwal & Co., Chartered Accountants, Jaipur (Firm Reg. No. 006852C) as the Internal Auditor of the Company for the financial year 2023-24.

The Internal Audit Report issued by M/s. Shiv Shankar Khandelwal & Co., for the Financial Year ended on March 31, 2023 is free from any qualification, reservation, observation and adverse remark and the Internal Audit report is self-explanatory and does not call for any further comments.

The provisions of Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company. Hence, the maintenance of the cost records as specified by the Central Government under Section 148(1) of the Act, is not required and accordingly, such accounts and records are not made and maintained. The Company has not appointed any Cost Auditor during the year.

During the year under review, Statutory Auditor, Secretarial Auditor and Internal Auditor in their Report respectively have not reported to the audit committee, under Section 143 (12) of the Act, any instances of fraud committed against the Company by its officers or employees.

Pursuant to the provisions of Section 186(11) of the Act, read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loans made, guarantees given or securities provided or acquisition of securities by a Non-Banking Financial Company (NBFC) registered with RBI, in the ordinary course of its business are exempt from the applicability of the provisions of Section 186 of the Act. As such, the particulars of loans and guarantee have not been disclosed in this Report. Further, particulars of Loans given and investments made by the company are given under Note no. 3 and 4 respectively of the Financial Statements of the company forming part of this Annual Report.

All contracts/arrangement/transactions entered by the Company during Financial Year 2022-23 with related parties were in compliance with the applicable provisions of the Act and SEBI Listing Regulations and are disclosed under Note No. 3.23 of the Notes to Standalone Financial Statements for the year ended March 31, 2023. Prior omnibus approval of the Audit Committee is obtained for all related party transactions which are foreseen and of repetitive nature.

Pursuant to the said omnibus approval, details of transaction entered into is also reviewed by the Audit Committee on a quarterly basis. All related party transactions entered during Financial Year 2022-23 were on arm's length basis and not material under the Act and SEBI Listing Regulations. None of the transactions required members' prior approval under the Act or SEBI Listing Regulations.

There were no transaction requiring disclosure under Section 134(3) (h) of the Act. Hence, the prescribed Form AOC 2 is not applicable to the Company and therefore does not form a part of this report.

The Company's Policy on Materiality of Related Party Transactions is put up on the Company's website and can be accessed at https://www.bflfin.com/wp-content/uploads/2014/11/POLICY-ON-MATERIALITY-OF-RELATED-PARTY-TRANSACTION.pdf

Risk Management is an integral part of the Company's business strategy with focus on building risk management culture across the organization. The Company has developed and implemented a risk management policy which encompasses practices relating to identification, assessment monitoring and mitigation of various risks to key business objectives. The Risk management framework of the Company seeks to minimize adverse impact of risks on our key business objectives and enables the Company to leverage market opportunities effectively. The Company has also constituted Risk Management Committee w.e.f. November 09, 2022.

The various key risks to key business objectives are as follows:

Liquidity Risk: It is the risk that the Company will be unable to meet its financial commitment to a Bank/ Financial Institution in any location, any currency at any point in time. Liquidity risk can manifest in three different dimensions for the Company.

Funding Risk: The risk that the company will not be able to meet the short-term financial obligations when they become due.

Time Risk: To compensate for non-receipt of expected inflows of funds.

Call Risk: Due to crystallization of contingent liabilities or inability to undertake profitable business opportunities when desirable.

Interest Rate Risk: It is the risk where changes in market interest rates might adversely affect the

Company's financial condition. The short term/immediate impact of changes in interest rates are on the Company's Net Interest Income (NII). On a longer term, changes in interest rates impact the cash flows on the assets, liabilities and off-balance sheet items, giving rise to a risk to the net worth of the Company arising out of all re-pricing mismatches and other interest rate sensitive positions.

To prioritize risk control actions in terms of their potential to benefit the organization. Risk treatment includes risk control/ mitigation and extends to risk avoidance, risk transfer (insurance), risk financing, risk absorption etc. for-

a) Effective and efficient operations b) Effective Internal Controls c) Compliance with laws and regulations

Risk Treatment shall be applied at all levels through carefully selected validations at each stage to ensure smooth achievement of the objective.

The Company's Risk Management Policy is put up on the Company's website and can be accessed at https://www.bflfin.com/wp-content/uploads/2023/02/14.-RISK-MANAGEMENT-POLICY.pdf

The Company believes that internal control is a necessary prerequisite of Governance and that freedom should be exercised within a framework of checks and balances. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The financial control framework includes internal controls, delegation of authority procedures, segregation of duties, system access controls and document filing and storage procedures.

The management is committed to ensure an effective internal control environment, commensurate with the size, scale and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets. The control system ensures that the Company's assets are safeguarded and protected and also takes care to see that revenue leakages and losses to the Company are prevented and our income streams are protected. The control system enables reliable financial reporting. The Audit Committee reviews adherence to internal control systems and internal audit reports.

The Company has also received report on Internal Financial Controls from statutory auditors of the company.

Being a non-deposit taking NBFC the Company has not accepted any deposit within the meaning of the Companies (Acceptance of Deposits) Rules, 2014 or Chapter V of the Act, and guidelines and directions of Non-Banking Financial Companies (Acceptance of Public Deposits) (Reserve Bank) Directions, 2016 as prescribed by RBI in this regard and as such no details are required to be furnished.

Also, Company has not taken any Loan/borrowing from its directors during the year under review.

A separate Section on Management's Discussion and Analysis Report is included as Annexure IV of the Annual Report, pursuant to Regulation 34(2) (e) of Listing Regulations.

Your Company practices a culture that is built on core values and ethical governance practices. The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI"). The Company has also implemented several best governance practices. The report on Corporate Governance for the financial year ended on March 31, 2023 along with Certificate issued by M/s V.M. & Associates, Company Secretaries confirming the compliance to applicable requirements related to corporate governance as stipulated under Schedule V of the Listing Regulations forms part of this Annual Report as

Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

The information required under Section 134(3) (m) of the Act, read with the Companies (Accounts) Rules, 2014 relating to the conservation of energy and technology absorption, foreign exchange earnings and outgo are given below:

Foreign exchange earnings and outgo is reported to be

NIL during the financial year under review.

The Company's net worth is below Rs. 500 crore, Turnover is less than Rs.1000 Crore and Net profit (Before Tax) is less than Rs. 5 Crore, during the immediately preceding financial year, hence provisions of section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) rules, 2014, are not applicable on the Company.

The Adjudicating Officer, Securities and Exchange Board of India ("AO SEBI") imposed a penalty of Rs. 25,00,000/- (Rupees Twenty Five Lakh Only) jointly and severally on 3 companies i.e. your Company, Baid Finserv Limited (Formerly Known as "Baid Leasing and Finance Co. Ltd.") and Dream Finhold Private Limited vide Order No. Order/SM/S./2022-23/24153-24155 dated February 27, 2023 in the matter of alleged violation of the provisions of:

Regulations 3(a), (b), (c), (d) and Regulations 4 (1) and 4(2)(f) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 read with Section 12A(a), (b), (c) of Securities and Exchange Board of India Act, 1992 read with Section 67(2) read with Section 24(1) of Chapter III of Companies Act, 2013.

Regulation 73(1)(e) of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018

Regulation 31(1), 31A (3)(a) and 31A(8) of LODR Regulations read with Section 21 of Securities Contracts (Regulation) Act, 1956.

In respect of the said order, the amount of penalty has been paid in full by Co-Noticee Baid Finserv Limited (Formerly Known as "Baid Leasing and Finance Co. Ltd."). The said order is available on the website of Securities and Exchange Board of India for public view and also accessible at the website of the Company at https://www.bflfin.com/wp-content/uploads/2023/08/9.-AO-Order-by-SEBI-dated-27.02.2023.pdf.

Further, as this matter pertains to 2016 and 2017, the Board of the Company is of the opinion that this order will not affect the going concern status or the future operation of the Company.

Apart from the above, there were no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concern status and the operations of the Company in future pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014 .

In line with the provisions of Listing Regulations, Act, and the principles of good governance, the Company has devised and implemented a vigil mechanism, in the form of 'Whistle-Blower Policy' which can be accessed on the website of the Company at https://www.bflfin.com/wp-content/uploads/2014/11/Whistle-Blower-policy.pdf . Detailed information on the Vigil Mechanism of the Company is provided in the Report on the Corporate Governance which forms part of the Annual Report.

During the period under review, applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively, issued by The Institute of Company Secretaries of India have been duly followed by the Company and have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

The Company does not have any secured external borrowings as such it is not rated.

Your Company is a Non-Banking Non Deposit Taking Non Systemically Important Investment and credit

Company ("NBFC-ICC"), your Company continues to comply with the applicable regulations and guidelines of Reserve Bank of India and provisions as prescribed in Master Direction - Non-Banking Financial Company - Non-Systemically Important Non-Deposit taking Company (Reserve Bank)

Directions, 2016 ("Master Directions") as amended from time to time.

The Company has been identified for categorisation as NBFC-Base Layer under Scale Based Supervision Regulation (SBSR), a Revised Regulatory Framework for NBFCs as per the list issued by RBI in its Press Release 2022-2023/975 dated September 30, 2022. In compliance with the applicable provisions of the said regulation the Board of Directors have constituted Risk Management Committee w.e.f. February 10, 2023 and has also framed various policies as applicable to the Company including Risk Management Policy. The Board periodically reviews the policies and approves amendments as and when required.

Further, your Company has complied with all the rules and procedure as prescribed in above mentioned master directions and any other circulars & notifications, time to time, issued by Reserve Bank of India.

During the year under review, none of the Directors/KMP/employee of the Company was in receipt of the remuneration exceeding the limits prescribed u/s 197 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 of the Act.

The statement containing names of employees in terms of remuneration drawn and the particulars of employees as required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure II forming part of this report.

The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Act, read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure III.

The Managing Director and the Chief Financial Officer of the Company give annual certification on financial reporting and internal controls to the Board in terms of Regulation 17(8) of Listing Regulations. The Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33(2) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The annual certificate given by Managing Director and the Chief Financial Officer is published in this Report.

Pursuant to the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) and amendments thereto, the Board has formulated and implemented a Code of Conduct to regulate, monitor and report trading by its designated person and other connected person and Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information. The trading window is closed during the time of declaration of results and occurrence of any material events as per the code. The same is available on the Company's website and can be accessed at https://www.bflfin.com/wp-content/uploads/2019/05/Code-of-Fair-Disclosure-and-Conduct-under-Regulation-82-of-the-SEBI-PIT-Regulations-2015.pdf

Further, as per the provisions of Regulation 3 of PIT Regulations the structured digital database (SDD) is maintained by the Company in Orion Legal Compliance Software for the purpose of maintaining record of unpublished price sensitive information ("UPSI") shared with various parties on need to know basis for legitimate purposes with date and time stamp containing all the requisite information that needs to be captured in SDD.

In compliance with the Listing Regulations and Act, the Company has framed and adopted a code of conduct and ethics ("the code"). The code is applicable to the members of the Board, the executive officers and all the employees of the Company.

All the members of the Board and Senior Management Personnel have affirmed compliance to the code for the financial year ended on March 31, 2023 and a declaration to this effect signed by the Managing Director forms part of the Corporate Governance Report as Annexure V.

The Financial Statement of the Company for Financial Year 2022-23 have been prepared with the applicable accounting principles in India and the mandatory Indian Accounting Standard (‘Ind AS') as prescribed under Section 133 of the Act, read with the rules made there under.

Pursuant to sub section 3 (c) of Section 134 of the Act, the Board of Directors of the Company hereby state and confirm that:

i. in the preparation of the annual accounts for the year ended on March 31, 2023, the applicable accounting standards have been followed and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended on March 31, 2023 and of the profit and loss of the Company for that period;

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

iv. the Directors have prepared the annual accounts on a going concern basis; v. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company does not have any agreement(s) subsisting as on July 15, 2023 as required to be disclosed in the annual report of the Company for Financial Year 2022-23 under sub-regulation (2) of Regulation 30A read with Part G of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Other disclosures with respect to Board's Report as required under the Act, Rules notified thereunder and Listing Regulations are either NIL or NOT APPLICABLE.

No proceedings are pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year as at the end of the financial year.

Further, we hereby confirm that no corporate action has been pending for implementation as at the end of the financial year.

Your Board acknowledges with appreciation, the invaluable support provided by the Reserve Bank of

India, Securities and Exchange Board of India, Ministry of Corporate Affairs, Bankers, Company's shareholders, auditors, advisors, business partners, for the patronage received from them including officials there at from time to time. The Board would also like to thank the BSE Limited, National Securities Depository Limited, Central Depository Services (India) Limited and MCS Registrar and Share transfer Agent (Registrar and Share Transfer Agent) for their continued co-operation.

Your Board records with sincere appreciation the valuable contribution made by employees at all levels and looks forward to their continued commitment to achieve further growth and take up more challenges that the Company has set for the future.