Directors Report of Aye Finance Ltd.

Mar 31, 2025

Your Board of Directors ("Board") is pleased to present
the 32nd Annual Report together with the audited financial
statements of your Company for the financial year ended
March 31,2025.

Upon receipt of Certificate of Incorporation consequent
upon conversion to public company dated December 10,
2024, from the Registrar of Companies, the Company''s name
has been changed to "Aye Finance Limited”. The Company
has also received a Fresh Certificate of Registration from
Reserve Bank of India dated March 25, 2025.

Aye Finance Limited ("AFL” or "Company”) is a non-deposit
accepting Non-Banking Finance Company - middle layer
("NBFC-ML") holding a Certificate of Registration from the
Reserve Bank of India ("RBI”) since 2014. The Company is
focused on providing loans to micro scale MSMEs (Micro
Small and Medium Enterprises) across India across
manufacturing, trading, service and allied agriculture
sectors. It offers a range of business loans for working
capital and business expansion needs. The Company
provides comprehensive product line comprising mortgage
loans, ''Saral'' Property Loans, secured hypothecation loans
and unsecured hypothecation loans & supply chain finance.

FINANCIAL HIGHLIGHTS

Particulars	March 31, 2025	March 31, 20241
Revenue from operations	1,459.73	1,040.22
Other income	45.26	31.53
Total revenue	1,504.99	1,071.75
Expenses
Employee benefit expenses	379.64	275.21
Finance costs	468.00	326.53
Impairment on Financial Assets	288.83	131.40
Depreciation and amortisation expenses	22.16	14.54
Net Loss on fair value changes	3.62	6.18
Other expenses	117.73	90.03
Total expenses	1,279.98	843.89
Profit before tax	225.01	227.86
Tax Expenses	53.74	66.73
Profit after tax	171.27	161.13
Other Comprehensive Income	(0.72)	(0.41)
Profit after tax (after OCI)	170.55	160.72
Earnings per share (equity share, par value of ? 21 each)	2	2
Basic (?)	9.29	9.97
Diluted (?)	9.12	9.86

OPERATIONS, RATINGS, FUND RAISE AND THE STATE OF

COMPANY''S AFFAIR

Operational Highlights

• The Company earned total revenue of '' 1,459.73 for
the FY 2024-25 as compared to '' 1,040.22 Crores in
the FY 2023-24, registering an increase of 40.33%, as
compared to the previous year.

• Profit before tax and after tax for FY 2024-25 stood
at '' 225.01 Crores and '' 171.27 Crores respectively
as against '' 227.86 Crores and '' 161.13 Crores
respectively, for the previous year.

Strong Capital and Liquidity Position

• The Company''s Total Capital Adequacy stood at
34.92 % with a Tier 1 of 34.92% against regulatory
requirement of 15% and 10% respectively.

• The Company''s Gearing was at 2.89 as at March 31,
2025.

• The Company''s Liquidity Coverage Ratio (LCR) stood
comfortably at 358.39 % as at March 31, 2025 against
a regulatory requirement of 100%.

• The Company continues to hold a strong liquidity
position with '' 988.94 Crores as cash balance as at
end of FY 2024-25.

• The Asset Liability Management (ALM) was
comfortable with no negative cumulative mismatches
across all time buckets

Business Update

• The Company closed the year with a balance sheet
size of '' 6,338.11 Crores and total loan assets on
books of '' 4,950.21 Crores.

Assets Under Management (AUM)

• The Assets Under Management (AUM) stood at
'' 5,533.90 Crores as at March 31, 2025 as against
'' 4,463.29 Crores as at March 31, 2024 which is a
growth of 23.99% YOY.

Network Expansion

• As on March 31, 2025, your Company have 526
branches spread across 18 states and 3 Union
Territories in India compared to 478 branches as on
March 31, 2024.

• During the FY 2024-25 2,68,625 new loans were
disbursed.

• As on March 31, 2025, the Company has 8,868 active
employees helping these customers pursue their
dreams.

Stable Asset Quality

• As at year end, the Company had a strong provisioning
pool of '' 212.15 Crores, Gross Non-Performing
Assets ("GNPA") amounted to '' 217.04 Crores and
4.21% whereas Net Non-Performing Assets ("NNPA")
amounted to '' 70.40 Crores (1.40%).

OTHER MATERIAL EVENTS

Your Company has filed Draft Red Herring Prospectus ("DRHP") with Securities and Exchange Board of India ("SEBI") on
December 17, 2024 and has received approval from the SEBI on April 03, 2025. The Company has also received approvals
from Stock Exchanges on March 05, 2025. Further, the Company made an application for change in control to Reserve Bank
of India and received approval from RBI on April 21, 2025.

Credit Rating

The credit ratings of the securities/ instruments/ loans, credit facilities and other borrowings of the Company as on March 31,
2025 were assigned/reaffirmed in the following manner-

Name of Rating Agency	Securities / Instruments/ Loans, Credit Facilities and other Borrowings	Rating	Last review date
ICRA Limited	Long term bank facilities	[ICRA]A (Stable)	December 06, 2024
	Long-Term Bank facilities	IND A / Stable
	Commercial Paper	IND A1
India Ratings and Research Pvt Ltd	Non-Convertible Debenture	IND A / Stable	July 19, 2024
	Principal Protected Market-Linked Debenture	IND PP-MLD A / Stable

Fund raised during FY 2024-25:-

The aggregate debt outstanding as on March 31, 2025 was
'' 4,526.33 Crores. Bank Finance remains an important
source of funding for your Company. Banks continued their
support to your Company. As of March 31,2025, borrowings
from Banks were '' 1,209.39 Crores compared to '' 685.33
Crores in the previous financial year.

The Company has been regular in servicing all its debt
obligations.

COMPANY''S PROSPECTS, BUSINESS OVERVIEW AND
FUTURE OUTLOOK

During the period under review, the Company continued
to strengthen its presence in the Non-Banking Financial
Services sector by maintaining a disciplined approach to
credit, enhancing its technology capabilities, and expanding
its customer base. The Company''s portfolio remains well-
diversified across various segments. The management
remains committed to creating long-term stakeholder
value through sustainable business practices, responsible
lending, and a focus on inclusive growth.

A detailed aspect on the same has been elaborated upon
in the Management Discussion and Analysis Report, which
forms integral part of this Annual Report.

CHANGE IN NATURE OF BUSINESS

There has been no change in the existing nature of business
and operations of the Company. During the year, the
Insurance Regulatory and Development Authority of India
("IRDAI") had granted a license to the Company to act as
composite corporate agent for solicitation and procurement
of insurance business for life insurers, general insurers and
health insurers as specified under IRDAI Regulations.

TRANSFER TO RESERVES

An amount of '' 34.25 Crores, representing 20% of the Profit
After Tax ("PAT") was transferred to statutory reserve of
the Company pursuant to Section 45IC of the Reserve Bank

of India Act, 1934. Further, an additional amount of '' 9.24
Crores have been transferred to Share option outstanding
account during the year under review.

DIVIDEND

To grow the business line of the Company, the Directors
have not recommended any dividend on equity shares for
the year ended March 31, 2025.

CAPITAL STRUCTURE
Authorised Share Capital

As on March 31, 2025, Authorised Share capital of the
Company stood at '' 82 Crores consisting of 41,00,00,000
equity shares having face value of '' 2/- each.

During the year under review, Authorised Share Capital of
the Company was changed in the following manner-

• On August 16, 2024, the Authorised Share Capital was
increased from '' 45.31 Crores to '' 82 Crores through
an Ordinary Resolution passed at the Extra-Ordinary
General Meeting. The new capital structure includes
4,34,20,000 Equity Shares with a face value of '' 10
each, 2,91,00,000 Preference Shares with a face value
of '' 10 each, and 47,40,000 Preference Shares with a
face value of '' 20 each.

• On October 17, 2024, the share capital was reclassified
into equity shares and sub-divided in the following
manner, through a Special Resolution at the Extra¬
Ordinary General Meeting to reclassify the Authorised
Share Capital and subdivide equity shares in the
following manner:

o the reclassification of the Authorised Share Capital
from '' 82 Crores, which included 4,34,20,000
Equity Shares of '' 10 each, 2,91,00,000 Preference
Shares of '' 10 each, and 47,40,000 Preference
Shares of '' 20 each, to '' 82 Crores consisting of
8,20,00,000 Equity Shares of '' 10 each.

o the face value of the equity shares was reduced
from '' 10 each to '' 2 each, effective from October
15, 2024, resulting in revised Authorised Share
Capital of '' 82 Crores comprising 41,00,00,000
Equity Shares of '' 2 each.

Paid-up Share Capital

As on March 31,2025, Paid-up Share capital of the Company
stood at '' 38,34,83,140/- consisting of 19,17,41,570 equity
Shares having face value of '' 2/- each.

During the year under review, Paid-up Share Capital of the
Company was changed in the following manner-

• On September 23, 2024, the Company allotted

3,04,29,293 equity shares of '' 10 each pursuant to
the conversion of Compulsory Convertible Preference
Shares (CCPS) into equity shares.

• On September 24, 2024, the Company allotted 9,49,376
equity shares of '' 10 each upon exercise of warrants
by Mr. Sanjay Sharma, Founder & Managing Director
of the Company, paying the remaining amount of ''
653.11 per warrant.

• On September 26, 2024, the Company allotted

21,39,125 equity shares of '' 10/- each through private
placement and preferential allotment to IMP2 Assets
Pte. Ltd. and British International Investment plc,
respectively.

• On October 17, 2024, the shareholders approved
a Special Resolution at the Extra-Ordinary General
Meeting to subdivide 3,83,48,314 equity shares of face
value of '' 10 each into 19,17,41,570 equity shares of
face value of '' 2 each, effective from October 15, 2024.

DEPOSITS

The Company has not accepted/received any deposit during
the year under review falling within the ambit of Chapter V of
the Companies Act, 2013 and the Companies (Acceptance
of Deposits) Rules, 2014, as amended from time to time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis ("MDA") Report
forms an integral part of this Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintaining the high standards
of corporate governance and is continuously striving to
implement several best corporate governance practices.

In terms of Part C of Schedule - V SEBI Listing Regulations,
a report on Corporate Governance along with the certificate
from M/s Neeraj Arora & Associates, Company Secretaries
(Firm Registration No. S2019DE706400), a peer reviewed
firm confirming compliance of the conditions of Corporate
Governance is forms part of this Annual Report as
Annexure I.

RISK MANAGEMENT

Risk Management is an integral part of the Company''s
business strategy. We deploy anenterprise-wide risk
management framework which is overseen by the senior
management. This framework ensures compliance with
risk policies, monitoring of risk tolerance limits, review

and analysis of risk exposure related to specific issues
and oversight of risk across the organisation. The risks
are systematically evaluated, reported, and monitored to
safeguard the Company''s sustainability and operational
integrity.

The framework is supported by our Internal Capital
Adequacy Assessment Process (“ICAAP") policy, third-party
risk monitoring, and quarterly reviews of Key Risk Indicators
(“KRIs"). These mechanisms allow us to continuously
monitor and address key risks, ensuring that we take timely
actions to keep risks within acceptable limits while making
informed decisions aligned with our strategic objectives.

The Board of Directors has adopted a Risk Management
Policy for the Company which provides for identification of
key events and risks impacting the business objectives of
the Company and attempts to develop strategies to ensure
timely evaluation, reporting and monitoring of key business
risks.

The risk management framework of the Company addresses
various types of risks, including credit risk, portfolio
concentration risk, market and strategic risk, operational risk,
IT and cyber risk, compliance risk, reputational risk, interest
rate risk, liquidity risk, and money laundering risk. To mitigate
these risks, the Company employs several strategies. For
credit risk, it analyzes customer creditworthiness and uses
a structured underwriting process. Portfolio concentration
risk is managed by diversifying investments across
different industries and regions. Market and strategic
risks are addressed through careful planning and regular
performance reviews. Operational risks are mitigated by
maintaining strong internal controls and conducting audits.
IT and cyber risks are managed with robust cybersecurity
measures and disaster recovery plans. Compliance risks
are handled through continuous monitoring and updates to
regulations. Reputational risks are minimised by adhering
to fair practices and maintaining effective customer
service. Interest rate risks are managed by appropriately
pricing loan products, while liquidity risks are addressed
by ensuring sufficient liquidity and planning funding needs.
Finally, money laundering risks are mitigated through a risk-
based approach and thorough transaction monitoring.

Pursuant to Regulation 62I of SEBI Listing Regulations,
the Company has a Risk Management Committee which
is responsible for monitoring and reviewing the risk
management plan & ensuring its effectiveness. The Risk
Committee meets at least once in every quarter to assess
and review the risk profile of the organisation to ensure that
risk is not higher than the risk appetite determined by the
Board.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The board of directors is responsible for ensuring that
the Company has implemented robust systems and
a framework of internal financial controls, providing
reasonable assurance regarding the adequacy and operating
effectiveness of these controls in relation to reporting,
operational, and compliance risks, as stipulated in Section
134(5)(e) of the Companies Act, 2013. Your Company has
in place adequate financial controls commensurate with
its size, scale and complexity of operations with reference
to its financial statements. Internal Financial Controls
("IFC") of the Company are also similarly commensurate.
IFC has been designed to provide reasonable assurance
about recording and providing reliable financial information,
ensuring integrity in conducting business, accuracy and
completeness in maintaining accounting records and
prevention and detection of frauds and errors.

The Company also periodically engages outside experts
to carry out an independent review of the effectiveness
of various Internal Controls. The observations and best
practices suggested are reviewed by the management and
Audit Committee and appropriately implemented with a
view to continuously strengthen internal controls.

The internal control system is supported by an internal
audit process for reviewing the adequacy and efficacy of
the Company''s internal controls, including its systems and
processes and compliance with regulations and procedures.

Your Company has in place strong internal audit processes
and systems which design an audit plan to ensure optimum
portfolio quality and keep risks at bay. The Internal Audit
department takes care of internal control processes. There
is a risk-based audit methodology covering all key processes
of the Company, planned based on various risk-based
parameters The Audit Committee of the Board of Directors,
comprising of Independent Directors, periodically reviews
the internal audit reports, covering findings, adequacy
of internal controls, and ensure compliances. The Audit
Committee also meets the Company''s Statutory Auditors to
ascertain their views on the financial statements, including
the financial reporting system, compliance to accounting
policies and procedures, adequacy and effectiveness of the
internal controls and systems followed by the Company.
Information System Security controls enable the Company
to keep a check on technology-related risks and also
improve business efficiency and distribution capabilities.
Your Company is committed to invest in IT systems,
including back-up systems, to improve the operational
efficiency, customer service and decision-making process.

During the year under review and based on the information
provided, nothing has come to the attention of Directors
to indicate that any material breakdown in the function of
these controls, procedures or systems occurred. Further,
there have been no significant changes in our IFC during the
year that have materially affected, or are reasonably likely to
materially affect, our IFC.

MATERIAL EVENTS SUBSEQUENT TO THE DATE OF
FINANCIAL STATEMENTS

There are no material changes and commitments affecting
adversely the financial position of the Company, which
have occurred between the end of the financial year of the
Company i.e. March 31, 2025 and the date of this report
except specifically mentioned in this report.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE
COMPANIES

As on March 31, 2025, your Company had only 1 (one)
Wholly Owned Subsidiary i.e. Foundation for Advancement
of Micro Enterprises ("FAME"), incorporated under the
Companies Act, 2013 as Section 8 Company. Further, there
are no Associates or Joint Venture Companies within the
meaning of Section 2(6) of the Companies Act, 2013 as on
March 31,2025.

During the year under review, there has been no change in
the nature of the business of the subsidiary. FAME has got
Registration under Foreign Contribution (Regulation) Act,
2010 from Government of India, Ministry of Home Affairs
vide their certificate dated January 01,2025.

Further, a statement containing salient features of the
financial statements of the Subsidiary Company including
therein the performance of subsidiary Company in Form
AOC-1, which form part of this Report as Annexure - II
pursuant to Section 129(3) of the Act and Rules made
thereunder.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013
read with the Companies (Corporate Social Responsibility
Policy) Rules 2014, as amended from time to time, the
Company has constituted a Corporate Social Responsibility
Committee. The composition, function and details of
meetings attended by the Committee Members are provided
in the Corporate Governance Report which forms part of
this Annual Report. The Board adopted the CSR Policy, as
formulated and recommended by the CSR Committee, and
the same is available on the website of the Company at
https://www.ayefin.com/policies/.

During the period under review, the Company has contributed
'' 1.75 Crore to Foundation for Micro Enterprises (FAME),
wholly owned subsidiary of the Company, which is a not-
for-profit company, within the meaning of Section 8 of the
Companies Act, 2013 and was incorporated in India on April
4, 2019. FAME carries out CSR activities under the direction
and CSR Policy adopted by your Company in line with the
Schedule VII of the Companies Act, 2013. The Company
primarily focuses on CSR projects or programs that include
promoting and developing of - (a) livelihoods; (b) rural
development; (c) skill development; & (d) the benefit of the
socially weaker section of the society.

FAME is dedicated to building the capabilities of micro¬
entrepreneurs, promoting sustainable economic growth.
FAME recognises that microentrepreneurs are the backbone
of the economy and by empowering them, it strives to create
a positive impact on society. Through skill development,
training on manufacturing quality products, adoption of
effective marketing techniques, and a focus on women
empowerment, FAME is creating a sustainable, inclusive
ecosystem that eliminates poverty and fosters economic
growth at the grassroots level.

As per amended CSR Rules and CSR Policy of the Company,
the funds required to be disbursed have been utilised for
the purposes and in the manner as approved by the Board
of Directors of the Company and confirmation to this effect
have been received from Mr. Krishan Gopal, Chief Financial
Officer and Ms. Sheena Sakhuja, Officer in-charge for CSR in
the Company and such confirmations have been duly noted
by the Board in its meeting held on May 21, 2025.

Key initiatives under each thematic area and the Annual
Report on CSR in compliance with Section 135 of the
Companies Act, 2013 read with Rule 8 of the Companies
(Corporate Social Responsibilities Policy) Rules, 2014, is
annexed as Annexure -III to this Report.

AUDIT COMMITTEE

The Company has an Audit Committee duly constituted
in accordance with the provisions of Section 177 of the
Companies Act, 2013, Master Direction - Reserve Bank
of India (Non-Banking Financial Company - Scale Based
Regulation) Directions, 2023 and Regulation 62F of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended ("SEBI Listing Regulations").
All the members of the Committee have expertise in
finance and have sound knowledge of accounting and
financial management. The terms of reference of the
Audit Committee, as set out in Regulation 62F of SEBI
Listing Regulations and Section 177 of the Companies Act,
2013 and other applicable laws, are approved by Board of

Directors of the Company. The composition of the Audit
Committee & its terms of reference and the details of
meetings attended by the Audit Committee members are
provided in Corporate Governance Report which forms part
of this Annual Report.

During the year under review, the Audit Committee has
been reconstituted by the Board of Directors on December
11, 2024. Further, all the recommendations of the Audit
Committee were duly accepted by the Board of Directors of
the Company during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and Section 134(5) of the
Companies Act, 2013, the Board of Directors, to the best of
their knowledge and ability, confirm that:

i) in the preparation of the annual accounts for the
financial year ended March 31, 2025, the applicable
accounting standards had been followed and there are
no material departures;

ii) 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 as on March 31, 2025 and of the profit/loss
of the Company for the year ended March 31, 2025;

iii) they 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) they have prepared the annual accounts for financial
year ended March 31, 2025 on a going concern basis;

v) they have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively during the financial year ended March 31,
2025.

AUDITORS & AUDITORS'' REPORT
Statutory Auditors & their reports

Pursuant to the guidelines issued by RBI on April 27, 2021 for
appointment of Statutory Central Auditors (SCAs)/ Statutory
Auditor (SAs) of Commercial Banks (excluding RRBs), UCBs
and NBFCs (including HFCs) vide its circular No. RBI/2021-
22/25 Ref. No DoS.CO.ARG/SEC.01/08.91.001/2021-22
("RBI Circular"), the Company is required to appoint the
Statutory Auditors for a continuous period of 3 (three)
years subject to the audit firm satisfying the prescribed

eligibility norms. Our existing Auditors M/s S S Kothari
Mehta & Co. LLP (formerly known as S S Kothari Mehta &
Co.), Chartered Accountants, New Delhi, (Firm Registration
No. 000756N/N500441) is eligible to continue as Auditors
of the Company in terms of the aforesaid RBI Circular and
applicable provisions of the Act from ensuing 32nd Annual
General Meeting ("AGM") (for FY 2024-25) till 33rd AGM (for
FY 2025-26) subject to the applicable provisions from time
to time.

The Audit Committee in their meeting held on May 21,2025
noted and confirmed the eligibility confirmation received
from M/s S S Kothari Mehta & Co. LLP in terms of the RBI
circular.

The Auditors'' Report for the financial year 2024-25 does not
contain any qualification, reservation, adverse remark or
disclaimer. Further, during the year under review, there were
no instances of any fraud reported by the Statutory Auditor
to the Board pursuant to Section 143 (12) of the Companies
Act, 2013.

Secretarial Auditors & their Report:

In terms of Section 204 of the Companies Act, 2013 read
with Rules framed thereunder, the Company is required to
appoint a Secretarial Auditors to carry out the secretarial
audit of the Company.

The Board had appointed by M/s Sanjay Grover &
Associates, Company Secretaries (Firm Registration
Number: P2001DE052900), as the Secretarial Auditors
to conduct secretarial audit of the Company for the
FY 2024-25 and their Report in the prescribed Form MR-3,
as Annexure - IV is annexed to this report. There are no
qualifications, observations, adverse remark or disclaimer
in the said Report.

Pursuant to Regulation 62M of SEBI Listing Regulations
(corresponding to Regulation 24A (2) of SEBI Listing
Regulations), a report on secretarial compliance for FY
2025 has been issued by M/s Sanjay Grover & Associates,
Company Secretaries (Firm Registration Number:
P2001DE052900) and the same has been submitted with
the stock exchange within the prescribed timelines.

On May 21, 2025, the Board in its meeting basis the
recommendation of Audit Committee approved the
appointment of M/s Sanjay Grover & Associates as
the Secretarial Auditors of the Company, subject to
Shareholders approval. This appointment will last for five
consecutive years, from the financial year 2025-26 to 2029¬
30. The terms of remuneration will be as mutually agreed
between Board and Secretarial Auditors.

M/s Sanjay Grover & Associates is a peer reviewed firm
and have also confirmed that they are not disqualified from
being appointed as the Secretarial Auditors of the Company
and satisfy the prescribed eligibility criteria.

For further details on the proposed appointment of
Secretarial Auditors, please refer related agenda item in the
Notice of the AGM.

FRAUDS REPORTED BY AUDITORS

During the period under review, none of the auditors have
reported any instances of material fraud in the Company
by its officers or employees under Section 143(12) of the
Companies Act, 2013 to the Audit Committee/ Board or
Central Government.

2 minor instances of embezzlement of cash by employees
were detected and reported to RBI. These aggregates to
'' 0.30 Crore. In such cases, employees were terminated
from their services and appropriate legal action has also
initiated against such employees.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 11 (eleven) times during the
year under review. Detailed information on these Board
meetings as well as meetings of the Committees set up
by the Board, their composition and attendance record of
the members of respective Committees is included in the
Report on Corporate Governance which forms integral part
of this Annual Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

A. Board of Directors

¦ Appointment/Continuity as Director/Variation in
terms of appointment

Appointment of Independent Directors

During the financial year 2024-25, Members of
the Company based on the recommendation of
Nomination & Remuneration Committee and the Board
of Directors have approved following appointments:

• Appointment of Mr. Vinay Baijal as a Non-Executive
Independent Director of the Company

Based on the recommendation of Nomination and
Remuneration Committee & Board of Directors,
Members of the Company at their Extra-Ordinary
General Meeting held on August 16, 2024 had
approved the appointment of Mr. Vinay Baijal
(DIN: 07516339) as an Independent Director for a

term of 5 (five) consecutive years, not liable to retire
by rotation, effective from August 16, 2024 and in
accordance with Regulation 17(1A) of SEBI Listing
Regulations, to continue as an Independent Director
beyond June 15, 2026, on account of his attaining the
age of 75 years on the said date.

• Appointment of Ms. Padmaja Nair as a Non-Executive
Independent Director of the Company

Based on the recommendation of Nomination and
Remuneration Committee & Board of Directors,
Members of the Company at their Extra-Ordinary
General Meeting held on October 17, 2024 had
approved the appointment of Ms. Padmaja Nair (DIN:
06841868) as an Independent Director of the Company
for a term of 5 (five) consecutive years effective from
October 17, 2024 and in accordance with Regulation
17(1A) of SEBI Listing Regulations, to continue as an
Independent Director beyond July 08, 2028, on account
of her attaining the age of 75 years on the said date.

Appointment/ Continuity as Director/Change in terms
of appointment of Directors

• Mr. Gaurav Malhotra, Non-executive & Non¬
Independent Director

On the recommendation of Nomination Remuneration
Committee & Board of Directors, the Members of the
Company at their Extra-Ordinary General Meeting had
approved the appointment of Mr. Gaurav Malhotra
(DIN: 07640504) as Non-executive & Non-Independent
Director who shall not be liable to retire by rotation and
for a term of 5 (five) consecutive years effective from
June 26, 2024.

• Mr. Aditya Misra, Non-executive & Non-Independent
Director

On the recommendation of Nomination Remuneration
Committee & Board of Directors, the Members of the
Company at their Extra-Ordinary General Meeting had
approved the appointment of Mr. Aditya Misra (DIN:
09376632) as Non-executive & Non-Independent
Director who shall not be liable to retire by rotation and
for a term of 5 (five) consecutive years effective from
September 28, 2024.

Continuity of Non-executive & Non-Independent
Directors

In terms of the amended Regulation 17(1D) of the
Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015, effective from April 01,2024, the continuation of
a director serving on the board of directors of a listed

entity shall be subject to the approval by the members
in a general meeting at least once in every five years
from the date of their appointment or re-appointment,
as the case may be. Therefore, on the recommendation
of Nomination & Remuneration Committee & Board
of Directors, the Members of the Company at their
Extraordinary General Meeting held on June 26,
2024 had approved the continuity of Directorship of
following directors on the Board, for a period of 5 (five)
years and not liable to retire by rotation:

i. Mr. Navroz Darius Udwadia (DIN: 08355220) as
Non-Executive & Non-Independent Director of the
Company representing Alpha Wave India I LP

ii. Mr. Vivek Kumar Mathur (DIN: 03581311) as
Non-Executive & Non-Independent Director of
the Company representing Elevation Capital V
Limited.

iii. Mr. Kartik Srivatsa (DIN: 03559152) as
Non-Executive & Non-Independent Director of
the Company representing LGT Capital Invest
Mauritius PCC with Cell E/VP.

iv. Mr. Kaushik Anand Kalyana Krishnan (DIN:
07719742) as Non-Executive & Non-Independent
Director of the Company representing A91
Emerging Fund I LLP.

Variation in terms of appointment

The Company converted from a private limited company
to a public company effective December 10, 2024. To
comply with the requirements of the Act, the terms of
appointment for Mr. Sanjay Sharma (DIN-03337545),
Managing Director, Executive Director and Mr. Aditya
Misra (DIN-0937663), Non-Executive Non-Independent
Director, were amended, making them liable to retire
by rotation. The Members of the Company approved
this variation in the terms of appointment at the Extra¬
Ordinary General Meeting held on December 11, 2024,
in accordance with the provisions of the Act on the
recommendation of Nomination & Remuneration
Committee and Board of Directors.

¦ Resignation/Cessation:

The Company filed its Draft Red Herring Prospectus
(DRHP) with SEBI on December 17, 2024, and plans
to proceed with an Initial Public Offering (IPO). To
facilitate the Company''s conversion from a private
to a public entity and the impending DRHP filing, the
following Non-Executive & Non-Independent Directors
nominated by our investors resigned effective from the
close of business hours on December 12, 2024:

S. No.	Name of Representative	Representative of
i.	Mr. Vivek Kumar Mathur (DIN: 03581311)	Elevation Capital V Limited
ii.	Mr. Kartik Srivatsa (DIN: 03559152)	LGT Capital Invest Mauritius PCC with Cell E/VP
iii.	Mr. Navroz Darius Udwadia (DIN: 08355220)	Alpha Wave India I LP
iv.	Mr. Gaurav Malhotra (DIN: 07640504)	British International Investment PLC
v.	Mr. Kaushik Anand Kalyana Krishnan (DIN: 07719742)	A91 Emerging Fund I LLP

The Board placed on record its appreciation for
the valuable contribution of above Directors in the
sustained growth of the Company during their tenure
in the Company.

¦ Retirement by Rotation:

In terms of provisions of Section 152 of the Act, Mr.
Sanjay Sharma (DIN-03337545), Managing Director of
the Company who has been longest in office would be
retiring by rotation at this AGM and is eligible for re¬
appointment.

B. Key Managerial Personnel

As on March 31, 2025, Mr. Sanjay Sharma (Managing
Director), Mr. Kristian Gopal (Chief Financial
Officer), and Mr. Vipul Sharma (Company Secretary,
Compliance Officer & Chief Compliance Officer) are
the Key Managerial Personnel as per the provisions of
the Act.

¦ Changes in Key Managerial Personnel

1. The members on the recommendation of
Nomination and Remuneration Committee
and the Board of Directors approved the
reappointment of Mr. Sanjay Sharma at the Extra¬
Ordinary General Meeting held on June 26, 2024,
for another consecutive term of 5 (five) years,
effective from July 05, 2024 to July 04, 2029
(both days inclusive).

2. Further, on recommendation of the Nomination &
Remuneration Committee and Board of Directors
approved the appointment of Mr. Vipul Sharma
as Company Secretary, Compliance Officer, and
CCO (Key Managerial Personnel) effective from
May 25, 2024 succeeding Ms. Tripti Pandey who
continues to serve as Deputy Company Secretary

of the Company. The Board place on its record its
appreciation for the valuable contribution of Ms.
Tripti in the sustained growth of the Company
during her tenure.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors (IDs) have submitted their
declaration of independence, as required pursuant to
Section 149(7) of the Act, confirming that they meet the
criteria of independence as provided in Section 149 (6)
of the Act. In the opinion of the board, the IDs fulfil the
conditions specified in the Act and the rules made there
under for appointment as IDs including integrity, expertise
and experience.

In the opinion of the Board of Directors, there has been
no change in the circumstances which may affect their
status as Independent Directors of the Company. Further,
in terms of Section 150(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.

FIT AND PROPER AND NON-DISQUALIFICATION
DECLARATION BY DIRECTORS

The Company has adopted a ''Policy on Fit and Proper
Criteria for Board of Directors'' for ascertaining the ''Fit and
Proper'' criteria to be obtained at the time of appointment
of directors and on a continuing basis. All the Directors of
the Company have confirmed that they satisfy the ''fit and
proper'' criteria as prescribed under Chapter XI of Master
Direction - Reserve Bank of India (Non-Banking Financial
Company - Scale Based Regulation) Directions, 2023, and
that they are not disqualified from being appointed/re-
appointed/continuing as Director in terms of Section 164(1)
and (2) of the Act.

COMPLIANCE WITH RBI GUIDELINES

The Company has complied with all the regulations of RBI
to the extent applicable as a NBFC-ICC and as Middle Layer
NBFC under the Master Direction - Reserve Bank of India
(Non-Banking Financial Company - Scale Based Regulation)
Directions, 2023 (“RBI Scale Based Regulations).

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has in place proper systems to ensure
compliance with the provisions of the applicable secretarial
standards issued by The Institute of the Company
Secretaries of India and such systems are adequate and
operating effectively.

POLICIES

¦ VIGIL MECHANISM/WHISTLE BLOWER

The Company is committed to conducting business
with integrity, and high standards of business and
personal ethics, and complying with all the applicable
laws and regulations, and has put in place a mechanism
for reporting illegal or unethical behaviour.

The Company has a Whistle-Blower Policy (Vigil
Mechanism) which is also available at https://www.
ayefin.com/policies/. under which the employees/
officers or directors are encouraged to report fraudulent
practices, bribery, illegal or unethical behaviour without
fear of any retaliation which is in compliance with the
provisions of Sections 177(9) & (10) of the Act and
Regulation 62J of SEBI Listing Regulations. The Policy
provides adequate safeguard against victimisation
to the Whistle Blower and enables them to raise
concerns and provides an option of direct access to
the Chairman of Audit Committee. During the period
under review, none of the personnel have been denied
access to the Chairman of the Audit Committee.

During the period under review, 4 complaints were
received by the Company under the vigil mechanism
and the same were successfully closed.

¦ NOMINATION AND REMUNERATION POLICY

In orderto set our principals, parameters and governance
framework of the remuneration for Directors, Manging
Director, Key Managerial Personnels and employees
of the Company and in terms of Section 178 of the
Companies Act, 2013, Regulation 62G of SEBI Listing
Regulations and RBI Master Direction - Scale Based
Regulations dated October 19, 2023, as amended from
time to time, your Company has in place Nomination
and Remuneration Policy which contains appointment,
reappointment, removal and remuneration including
criteria for determining qualifications, positive
attributes of Director & Key Managerial Personnels.

The Nomination and Remuneration Policy is also
available on the Company''s website at https://www.
ayefin.com/policies/.

During the year under review, the Nomination and
Remuneration Committee has been reconstituted
by the Board of Directors dated December 11, 2024.
Further, composition of the committee, its terms of
reference and the details of meetings attended by
the Committee members are provided in Corporate
Governance Report which forms part of this Annual
Report.

DETAILS OF SIGNIFICANT OR MATERIAL ORDERS PASSED
BY REGULATORS OR COURTS OR TRIBUNAL

During the period under review, there were no significant
or material orders passed by the regulators or courts
or tribunals impacting the going concern status of the
Company and its operations in future.

However, Members'' attention is drawn to the statement
on contingent liabilities, commitments as disclosed in the
Notes to the Financial Statements for the FY 24-25.

COST RECORDS AND COST AUDIT

During the period under review, maintenance of cost records
and requirement of Cost Audit as specified by the Central
Government under sub-section (1) of Section 148 of the
Companies Act, 2013 are not applicable on the Company.

HUMAN RESOURCES

As on March 31, 2025, the Company had 8,868 active
employees across its branches, regional office and Head
office. The Company recognises the importance of human
value and ensures that proper encouragement both moral
and financial is extended to employees to motivate them.
The Company enjoyed excellent relationship with workers
and staff throughout the year.

We are elated to announce our prestigious ranking as the
3rd Great Place to Work! This marks the 5th consecutive
time we have been ranked amongst the top 10 best places
to work in India. This accolade underscores our unwavering
dedication to cultivating an inspiring and supportive
workplace culture. Heartfelt gratitude to our extraordinary
team for making this distinguished achievement a reality!
We, as a team, have achieved success, stayed positive, and
found new ways to support each other.

ENERGY CONSERVATION & TECHNOLOGY ABSORPTION

(A) Conservation of Energy: (i) the steps taken or impact on conservation of energy: (ii) the steps taken by the Company for utilising alternate sources of energy: (iii) t he capital investment on energy conservation equipment''s:	The operations of the Company, being Financial Services related, require normal consumption of electricity. The Company is taking every necessary step to reduce the consumption of energy. In view of the nature of activities carried on by the Company, there is no capital investment on energy conservation equipment. Your Company, being engaged in financing business within the Country, does not have any activity relating to conservation of energy. The Directors, therefore, have nothing to report on investment in equipment for conservation of energy.
(B) Technology Absorption: (i) the efforts made towards technology absorption: (ii) the benefits derived like product improvement, cost reduction, product development or import substitution: (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): (iv) the expenditure incurred on Research and Development:	The Company has implemented Lead Management, Loan Origination, Collection Management, ERP and Data Warehouse systems. With the systems in place, the Company has achieved seamless flow of data across various systems, making information flow faster, more robust and reliable. Your Company, being engaged in financing business within the Country, does not have any activity relating to technology absorption and import of technology. The Directors, therefore, have nothing to report on Technology absorption. Considering the nature of services and businesses, no specific amount of expenditure is earmarked for research & development.
(C) Foreign Exchange Earnings and Outgo	The Foreign Exchange earnings and Foreign Exchange outgo during the year under review are as below:
	Particulars	Amount ('' in Crores)	Purpose
	Foreign Exchange Earnings	0.99	Grant received
	Foreign Exchange Outgo	30.51	Monitoring Fee, Commitment fees, Subscription fee, Reimbursement of travel expense, Depository charges & ECB Interest payment
	There was no unhedged foreign currency exposure in the Company as on March 31,2025.

EMPLOYEE STOCK OPTION PLAN

The Company has adopted and implemented the amended Aye Employee Stock Option Plan 2016, amended Aye Employee
Stock Option Plan 2020 and amended Aye Employee Stock Option Plan 2024 which on recommendation of the Nomination
& Remuneration Committee of the Company, was approved by the Board of Directors in their meeting held on December 11,
2024 and subsequently by the shareholders of the Company by way of special resolutions in their Extra-Ordinary General
Meeting held on December 11,2024 .

Details of ESOP disclosure pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 and the provisions
of Section 62 of the Act read with rules framed thereunder as on March 31, 2025 are appended below:

Sr. No.	Particulars	ESOP 2016	ESOP 2020	ESOP 2024
1.	Options granted as on March 31, 2025	30,89,690	54,14,975	15,07,460
2.	Options vested during the year	15,24,145	20,38,334	-
3.	Options exercised as on March 31, 2025	-	-	-
4.	The total number of shares arising as a result of exercise of option	NA	NA	NA
5.	Options lapsed/Surrendered	15,32,265	10,10,554	15,000

Sr. No.	Particulars		ESOP 2016		ESOP 2020	ESOP 2024
6.	The exercise price		NA		NA	NA
7.	Variation of terms of options		No Variation in terms of options. However, the Scheme was amended by the shareholders of the Company at their meeting held on December 11, 2024 to align with SEBI SBEB Regulations, 2021.
8.	Money realised by exercise of options		NA		NA	NA
9.	Total number of options in force		15,57,425		44,04,421	14,92,460
10.	Details of options granted to:
	(i)	Key Managerial Personnel Options Granted:		-	3,31,435	1,35,835
	•	Options Vested:		-	82,861	Nil
	•	Options lapsed/Surrendered:		-	-	Nil
	•	Total number of options in force		-	3,31,435	1,35,835
	(ii)	any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year		Nil	Nil	3,95,325
	(iii)	identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.		Nil	Nil	Nil

PERFORMANCE EVALUATION

The Board of Directors, along with its committees and independent directors, is dedicated to efficient functioning and
improved corporate governance. This commitment is evident in their ongoing performance evaluations.

In line with the Companies Act, 2013 and SEBI listing regulations, the Board, excluding independent directors, conducted
an annual performance evaluation through circulation, gathering input from all Directors. The assessment focused on the
Board''s composition, effectiveness, and the quality of information and communication.

The performance of Board Committees was also evaluated based on feedback from committee members, considering
their composition, meeting effectiveness, and overall functioning. Individual Directors were assessed on their contributions,
preparedness, and ability to present views, with the Chairperson''s performance evaluated as well.

On March 25, 2025, the Independent Directors met without other directors or Management to review the performance of Non¬
Independent Directors, the Board, and the Chairperson. They assessed the quality and timeliness of information flow between
Management and the Board, expressing satisfaction with the overall performance and effectiveness.

The Independent Directors actively participated in Board and Committee meetings, and the Chairperson of the Audit Committee
held a separate meeting with credit rating agency, ensuring transparency and accountability within the organisation.

Outcome: The Board of the Company was satisfied with the functioning of the Board and its Committees. Non-Executive
Directors and Independent Directors demonstrate a strong understanding of the Company and its requirements.

The Committees are functioning well and besides covering the Committees'' terms of reference, as mandated by applicable
laws, important issues are brought up and discussed in the Committee Meetings. The Board was also satisfied with the
contribution of Directors in their individual capacities. The Board has full faith in the Chairperson leading the Board effectively
and ensuring effective participation and contribution from all the Board Members.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the
Companies Act, 2013 read with Rule 12 of the Companies
(Management & Administration) Rules, 2014, copy of
Annual Return for the financial year ended March 31, 2025
is available on the website of the Company at https://www.
ayefin.com/financial-statements/.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Since, the Company is Non-Banking Financial Company
registered with RBI, the disclosures regarding particulars
of the loans given, guarantees given and security provided
is exempt under the provisions of Section 186(11) of the
Companies Act, 2013 read with rules made thereunder, as
amended. Further, the details of investments made by the
Company are given in the Notes to the Financial Statements
for the FY 24-25.

PARTICULARS OF RELATED PARTY TRANSACTIONS

The Company has Related Party Transaction Policy
and Policy on Determining Materiality of Related Party
Transactions ("RPT Policy") duly approved by the Board.
The Policy provide a framework for identification of related
parties, necessary approvals by the Audit Committee/
Board, reporting and disclosure requirements in compliance
with the requirements of the Companies Act, 2013 and
SEBI Listing Regulations. During the year under review, the
Company has revised its RPT Policy, in accordance with the
amendments to applicable provisions of the Act/Listing
Regulations.

All transactions entered by the Company during the year
under review with related parties were on arms'' length basis
and in the ordinary course of business as per the RPT Policy
of the Company and in compliance with the provisions of
the Companies Act, 2013 and Listing Regulations.

During the year under review, your Company has not entered
into any contracts/arrangement/transaction with related
parties which could be considered material in accordance
with Regulations 23 & 62K of the SEBI Listing Regulations,
to the extent applicable and the RPT Policy of the Company.
The RPT Policy may be accessed on the website of the
Company and the web-link of the same is https://www.
ayefin.com/policies/.

The details of the related party transactions as per Indian
Accounting Standards (IND AS) - 24 are set out in Notes to
the Financial Statements of the Company.

The Company in terms of Regulations 23 & 62K of
the SEBI Listing Regulations, to the extent applicable,
regularly submits within the prescribed time from the
date of publication of its financial results for the half year,
disclosures of related party transactions in the format
specified, to the stock exchange(s).

Since all transactions entered by the Company during the
financial year with related parties were on arms'' length
basis and in the ordinary course of business, the disclosure
of Related Party Transactions as required under Section
134(3)(h) of the Act in Form AOC-2 is not applicable to the
Company.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and
harassment-free workplace for every individual working on
the Company''s premises through various interventions and
practices. The Company always endeavours to create and
provide an environment that is free from discrimination and
harassment including sexual harassment.

The Company has in place a robust policy on the prevention
of sexual harassment in the workplace. The policy aims at
the prevention of harassment of employees and lays down
the guidelines for identification, reporting, and prevention of
sexual harassment.

There are 4 zonal Internal Committees (ICs) which are
responsible for redressal of complaints related to sexual
harassment and follows the guidelines provided in the
policy. During the year ended March 31, 2025, there was
no compliant pertaining to sexual harassment reported to
the Committee and disclosure as per requirement is given
below:

(a) number of complaints of sexual harassment received
in the year: Nil

(b) number of complaints disposed off during the year: Nil

(c) number of cases pending for more than ninety days: Nil

OTHER DISCLOSURES

• There are no details required to be reported with
regards to difference between amount of the valuation
done at the time of one-time settlement and the
valuation done while taking loan from the Banks or
Financial Institutions as your Company has not done
any settlement with any Bank or Financial Institutions
since its inception.

• The Company has neither filed any application nor
any proceedings pending under the Insolvency and
Bankruptcy Code, 2016 during the year under review,
hence no disclosure is required under this section.

• The Company has not issued any sweat equity shares
or equity shares with differential voting rights during
the year under review.

• During the year under review, debentures of the
Company were not suspended from trading on account
of any corporate action or otherwise.

• During the year under review, no amount has remained
unclaimed pursuant to debentures redeemed during
the year.

• The Company affirm its commitment to full compliance
with the provisions of the Maternity Benefit Act, 1961.

Our Company is dedicated to ensuring that all eligible
female employees receive the maternity benefits
stipulated by the Act, which includes paid maternity
leave, medical allowances, and comprehensive
workplace support.

ACKNOWLEDGEMENT

Your Board of Directors wishes to place on record
their sincere appreciation for the continued support
and cooperation received from customers, vendors,
shareholders, bankers, other stakeholders various regulatory
& government authorities. The Board places on record its
appreciation of the contribution made by employees at all
levels. The Company''s resilience to meet challenges was
made possible by their hard work, solidarity, co-operation
and support.

For and on behalf of the Board of Directors of
Aye Finance Limited

(formerly known as Aye Finance Private Limited)

Sd/- Sd/-

Govinda Rajulu Chintala Sanjay Sharma

Chairperson & Independent Director Managing Director

DIN: 03622371 DIN: 03337545

Date: July 31,2025 Place: Hyderabad Place: Gurugram

1

The Board of Directors of the Company in the Board meeting dated October 16,2024 and Shareholders of the Company in
the Extra Ordinary General Meeting dated October 17,2024 have approved the re-classification and sub-division of each of
the Equity Share of the Company having a face value of '' 10/- each in the Equity Share Capital of the Company, into 5 Equity
Shares having a face value of'' 2/- each.

Note: The above figures are extracted from the financial statements prepared in accordance with Indian Accounting
Standards (“Ind AS") as notified under Sections 129 and 133 of the Companies Act, 2013 (“Act") read with the Companies
(Accounts) Rules, 2014 and other relevant provisions of the Act. The detailed Financial Statements as stated above are
presented as separate section of this Annual Report.

---

Mar 31, 2024

The Directors have immense pleasure in presenting their
31^st Annual Report together with the audited financial
statements of the Company for the financial year ended
March 31,2024.

COMPANY OVERVIEW

Aye Finance Private Limited ("Company") is a Non-Deposit
Accepting Non-Banking Finance Company holding a
Certificate of Registration from the Reserve Bank of India
("RBI") since 2014 engaged in the business to provide term
loan or working capital finance to micro, small and medium
scale enterprises, proprietorship or partnership firms.

In terms of RBI Master Direction - Scale Based Regulation,
the Company has been classified as Middle Layer NBFC.

The Non-Convertible Debentures issued by the Company
on private placement basis are listed on Wholesale
Debt Market segment of BSE. In terms of Securities
and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI Listing

Regulations"), the Company is categorised as High Value
Debt Listed entity ("HVD").

The Company has also received Certificate of Registration
under the Registration of Corporate Agents - Regulations,
2015 from the Insurance Regulatory and Development
Authority of India ("IRDAI") to act as Corporate Agent
effective from June 27, 2024.

As on March 31, 2024, the Company have 478 branches
spread across 21 states in India. We have lent to over ~2.7
Lakh customers during the course of the year. As on March
31,2024, the Company has 7,001 employees helping these
customers pursue their dreams.

We are elated to announce our prestigious ranking as the
6^th Great Place to Work. This marks the 5^th consecutive time
we have been ranked amongst the top 10 best places to
work in India. This accolade underscores our unwavering
dedication to cultivating an inspiring and supportive
workplace culture. Heartfelt gratitude to our extraordinary
team for making this distinguished achievement a reality.
We, as a team, have achieved success, stayed positive,
and found new ways to support each other in previously
unimaginable ways.

FINANCIAL SUMMARY/HIGHLIGHTS, STATE OF AFFAIRS

The Company''s financial performance for the year ended March 31,2024 is summarised below:

(? crore)

Particulars	March 31, 2024	March 31, 2023
Revenue from operations	1,040.22	623.43
Other income	31.53	19.91
Total revenue	1,071.75	643.34
Expenses
Employee benefit expenses	275.21	212.20
Finance costs	326.53	197.96
Impairment on Financial Assets	131.40	73.35
Depreciation and amortisation expenses	14.54	11.45
Net Loss on fair value changes	6.18	6.57
Other expenses	90.03	70.41
Total expenses	843.89	571.94
Profit before tax	227.86	71.40
Tax Expenses	66.73	17.61
Profit after tax	161.13	53.79
Other Comprehensive Income	(0.41)	2.99
Profit after tax (after OCI)	160.72	56.78
Earnings per share (equity share, par value of ? 10 each)
Basic (?)	49.84	17.34
Diluted (?)	49.29	17.13

OPERATIONS, FUND RAISE, PROSPECTS AND FUTURE
PLANS

Operational Highlights

• The Net loan portfolio of the Company stood at
'' 4,003.12 crore as on March 31,2024.

• Loan amount of '' 3,930 crore was disbursed in FY 2023¬
24 representing an increase of ~67% as compared to
FY 2022-23.

During the period under review, the Company witnesses
increase in net profit after tax of '' 161.13 crore as compared
to '' 53.79 crore for the year ended March 31, 2023. Total
income has increased from '' 643.34 crore for the year
ended March 31,2023 to '' 1,071.75 crore for the year ended
March 31,2024.

The Company has Long term Credit Rating maintained at
India Ratings IND A-/Positive, further on July 19, 2024 rating
was upgraded to IND A/Stable.

Fund raised during 2023-24:-

• Resource mobilisation -

During the year under review, the Company has
continued to diversify the sources of funds and
raised a sum of '' 4,093.42 crore by way of Equity,
Compulsory Convertible Preference Shares ("CCPS"),
Warrants, Short & Long term loans, Non-Convertible
Debentures, External Commercial Borrowings ("ECB")
and DA/Securitisation which has helped the Company
to achieve its'' business target for FY 2023-24. Out of
overall fund raised, '' 310 crore were raised through
Equity, CCPS & Warrants issuances and '' 3,783.41
crore raised through borrowings, which includes
'' 678.70 crore by issuance of non-convertible
debentures and '' 1,411.50 crore by way of term
loan/WCDL. The Company also raised funds through
ECB route of '' 230.46 crore while '' 1,426.75 crore
was raised through Direct Assignments/PTCs. The
aggregate debt outstanding as on March 31,2024 was
'' 3,498.99 crore. The Company has been regular in
servicing all its debt obligations.

• Bank Finance -

Bank Finance remains an important source of funding
for the Company. Banks continued their support to
the Company. As of March 31, 2024, Borrowings
from Banks were ? 685.33 crore (30.92%) as against
? 133.88 crore (18.57%) in the previous financial year.

Business Overview:

Founded in 2014, Aye Finance has carved a niche by
focusing on serving the MSMEs, which struggle to secure
loans from traditional banks due to a lack of credit history
and collateral. The Company offers Hypothecation Loans
("HL") and Mortgage loans for working capital requirements
to include such businesses under the formal financial
system. Our business model revolves around innovative
credit assessment, personalized lending and technology
integration to bridge this financial gap and empower
MSMEs.

The loan portfolio grew approximately 64% driven by an
increase in active borrowers and geographic expansion
maintaining stable net profit margins. Investments in
technology and better credit assessments have enhanced
operational efficiency and customer experience.

HL provided by the Company to the business borrowers
are in the nature of a collateralized loan. These Loans
collaterals are in the nature of inventory, receivables,
livestock and machine tools etc. and are properly backed
up by the HL agreement signed with the borrowers. Based
on the considerate assessment and expert opinion on the
Classification of the HL Product, Company has classified
HL portfolio as Secured, wherever the value of Security is
higher than the loan amount at the time of disbursement
of the loan.

Future Outlook:

Aye Finance''s innovative approach to lending has had a
profound impact on India''s MSME sector. The Company
remains committed to support small businesses by
providing access to capital to grow, creating employment
opportunities and contributing to the country''s economic
development. As the company continues to expand and
refine its business model, it stands as a shining example to
drive financial inclusion and empower small entrepreneurs
in emerging economies.

RESERVE

An amount of '' 32.23 crore, being 20% of the profit after tax
(PAT) was transferred to statutory reserve of the Company
pursuant to Section 45IC of the Reserve Bank of India Act,
1934. Further, an additional amount of '' 4.70 crore has been
transferred to Share option outstanding account during the
year under review.

To grow the business line of the Company, the Directors
have not recommended any dividend on equity shares for
the year ended March 31,2024.

CAPITAL STRUCTURE
Authorised Share Capital

During the year under review, Authorised Share Capital of
the Company is increased from '' 34.60 crores consisting
of 55,00,000 Equity Shares having face value of '' 10 each
& 2,91,00,000 Preference Shares having face value of '' 10
each to '' 45.31 crores consisting of 67,30,000 Equity Shares
having face value of '' 10 each, 2,91,00,000 Preference
Shares having face value of '' 10 each and 47,40,000
Preference Shares having face value of '' 20 each, vide
Shareholders approval in Extra-Ordinary General Meeting
held on November 17, 2023.

Further, after March 31, 2024 the Authorised Capital of
the Company was also increased from '' 45.31 crores
consisting of 67,30,000 Equity Shares having face value of
'' 10 each, 2,91,00,000 Preference Shares having face value
of '' 10 each and 47,40,000 Preference Shares having face
value of '' 20 each to '' 82 crores consisting of 4,34,20,000
Equity Shares having face value of '' 10 each, 2,91,00,000
Preference Shares having face value of '' 10 each and
47,40,000 Preference Shares having face value of '' 20
each, vide Shareholders approval in Extra-Ordinary General
Meeting held on August 16, 2024.

Paid-up Capital

As on March 31,2024, Paid-up capital of the Company stood
at '' 40,49,14,560 consisting of 48,30,520 Equity Shares
having face value of '' 10 each, 2,61,82,448 Preference
Shares having face value of '' 10 each and 47,39,244
Preference Shares having face value of '' 20 each.

During the year under review, the Company had raised an
amount of '' 310 crore by way of issuance of 20 Equity
Shares having face value of '' 10 each at a premium of
'' 644.11 and 47,39,244 Series F Compulsory Convertible
Preference Shares having face value of '' 20 each at a
premium of '' 634.11 to the existing and new shareholders
in accordance with Amended and Restated Shareholders''
Agreement dated December 06, 2023.

DEPOSITS

The Company has not accepted/received any deposit during
the year under review falling within the ambit of Chapter V of
the Companies Act, 2013 and the Companies (Acceptance
of Deposits) Rules, 2014, as amended from time to time.

There was no change in the nature of the business of the
Company during the financial year ended March 31, 2024.

RISK MANAGEMENT

Risk Management is an integral part of the Company''s
business strategy. The risk management process is
governed by the enterprise-wide risk management
framework which is overseen by the senior management.
They review compliance with risk policies, monitor risk
tolerance limits, review and analyse risk exposure related
to specific issues and provides oversight of risk across the
organisation.

The Board of Directors have adopted a Risk Management
Policy for the Company which provides for identification
of key events/risks impacting the business objectives
of the Company and attempts to develop risk policies
and strategies to ensure timely evaluation, reporting and
monitoring of key business risks.

The risk management framework covers integrated risk
management mainly comprising Credit Risk, Market
Risk, Operational Risk, Regulatory Risk and Information
Technology Risk. The Credit Risk management structure
includes documented credit policies and procedures for
each financial product. The risk policies define prudential
limits, portfolio criteria, exceptional approval metrics, etc.
and cover risk assessment for new product offerings.
Concentration Risk is managed by diversifying into different
geographies and sectors.

Risks associated with frauds are mitigated through fraud
risk monitoring procedures. The Company has a strong
field vigilance function that ensures checks and balances
at the field level with respect to end use of loans, adherence
to policies and sourcing practices. Fraud risk is monitored
through oversight by senior management, who review
matters relating to fraud risk, including corrective and
remedial actions as regards people and processes.

Pursuant to Regulation 21 of SEBI Listing Regulations,
the Company has a Risk Management Committee which
is responsible for monitoring and reviewing the risk
management plan & ensuring its effectiveness. Risk
Committee meets at least once in every quarter to assess
and review the risk profile of the organisation to ensure that
risk is not higher than the risk appetite determined by the
Board.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company''s internal control system is designed to
ensure operational efficiency, protection and conservation

of assets, accuracy in financial reporting and an overall
compliance with laws and regulations. The internal control
system is supported by an internal audit process for
reviewing the adequacy and efficacy of the Company''s
internal controls, including its systems and processes
and compliance with regulations and procedures. The
Company''s internal control system is commensurate with
the size, nature and operations of the Company.

The Company has in place strong internal audit processes
and systems which design an audit plan to ensure optimum
portfolio quality and keep risks at bay. Internal Audit
department takes care of internal control processes. There
is a risk based audit methodology covering all key functions
of the Company, planned based on various risk based
parameters. The Audit Committee of the Board of Directors,
comprising of Independent Directors, periodically reviews
the internal audit reports, covering findings, adequacy
of internal controls, and ensure compliances. The Audit
Committee also meets the Company''s Statutory Auditors to
ascertain their views on the financial statements, including
the financial reporting system, compliance to accounting
policies and procedures, adequacy and effectiveness of the
internal controls and systems followed by the Company.
Information System Security Controls enable the Company
to keep a check on technology-related risks and also
improve business efficiency and distribution capabilities.
the Company is committed to invest in IT systems, including
back-up systems, to improve the operational efficiency,
customer service and decision-making process.

MATERIAL EVENTS SUBSEQUENT TO THE DATE OF
FINANCIAL STATEMENTS

There are no material changes and commitments affecting
adversely the financial position of the Company, which
have occurred between the end of the financial year of the
Company i.e. March 31, 2024 and the date of this report
except mentioned under respective headings.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE
COMPANIES

As on March 31, 2024, the Company had only 1 (one)
Wholly Owned Subsidiary i.e. Foundation for Advancement
of Micro Enterprises ("FAME"), incorporated under
Companies Act, 2013 as Section 8 Company. Further, there
are no associate or Joint Venture Companies within the
meaning of Section 2(6) of the Companies Act, 2013 as on
March 31,2024.

There has been no material change in the nature of the
business of the subsidiary.

Further, a statement containing salient features of the
financial statements of the Subsidiary Company in Form
AOC-1, which form part of this Report as Annexure-A
pursuant to Rule 8(1) of the Companies (Accounts) Rules,
2014, as amended.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies
Act, 2013 read with the Companies (Corporate Social
Responsibility Policy) Rules 2014, as amended from time
to time, the Company has established the Corporate Social
Responsibility Committee and the composition, function
and details of meetings attended by the Committee
Members are provided in the Corporate Governance Report
which forms part of the Annual Report. The Board adopted
the CSR Policy, formulated and recommended by the CSR
Committee, and the same is available at https://www.
ayefin.com/policies/.

During the period under review, the Company has
contributed '' 1 crore to Foundation for Micro Enterprises
(FAME), wholly owned subsidiary of the Company, which
is a not-for-profit company, within the meaning of Section
8 of the Companies Act, 2013 (erstwhile Section 25 of
the Companies Act, 1956), was incorporated in India on
April 04, 2019. FAME carries out CSR activities under the
direction and CSR Policy adopted by the Company in line
with the Schedule VII of the Companies Act, 2013. The
Company primarily focuses on projects or programs that
include promoting and development of (a) livelihoods; (b)
rural development; (c) skill development; & (d) and benefit
of the socially weaker section.

FAME is dedicated to building the capabilities of micro¬
entrepreneurs promoting sustainable economic growth.
FAME recognizes that micro-entrepreneurs are the
backbone of the economy and by empowering them, it
strives to create a positive impact on society. Through skill
development, training on manufacturing quality products,
adoption of effective marketing techniques and a focus
on women empowerment, FAME is creating a sustainable
inclusive ecosystem that eliminates poverty and fosters
economic growth at the grassroots level.

As per amended CSR Rules and CSR Policy of the Company,
the funds required to be disbursed have been utilised for
the purposes and in the manner as approved by the Board
of Directors of the Company and confirmation to this effect
have been received from Mr. Krishan Gopal, Chief Financial
Officer and Ms. Sheena Sakhuja, Officer in-charge for CSR in
the Company and such confirmations have been duly noted
by the Board in its meeting held on May 24, 2024.

Key initiatives under each thematic area and the Annual
Report on CSR under Section 135 of the Companies
Act, 2013 read with Rule 8 of the Companies (Corporate
Social Responsibilities Policy) Rules, 2014, is annexed as
Annexure-B to this Report and the same is available on the
website of the Company i.e. www.ayefin.com.

AUDIT COMMITTEE

The Company has an Audit Committee duly constituted
in accordance with the provisions of Section 177 of
the Companies Act, 2013, Master Direction - Reserve
Bank of India (Non-Banking Financial Company - Scale
Based Regulation) Directions, 2023 and Regulation 18 of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended ("SEBI Listing

Regulations"). All the members of the Committee have
expertise in finance and have knowledge of accounting
and financial management. The scope of the activities of
the Audit Committee, as set out in Regulation 18 of SEBI
Listing Regulations and Section 177 of the Companies Act,
2013 and other applicable laws, are approved by Board of
Directors of the Company. The composition of the Audit
Committee & its terms of reference and the details of
meetings attended by the Audit Committee members are
provided in Corporate Governance Report which forms part
of the Annual Report.

During the year under review, all the recommendations
of the Audit Committee were accepted by the Board of
Directors of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the
Board of Directors, to the best of their knowledge and ability,
confirm that:

i) in the preparation of the annual accounts for the
financial year ended March 31, 2024, the applicable
accounting standards had been followed along with
proper explanation relating to material departures (if
any);

ii) 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 as on March 31, 2024 and of the profit/loss
of the Company for the year ended March 31, 2024;

iii) they 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) they have prepared the annual accounts for financial
year ended March 31, 2024 on a going concern basis;

v) they have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively during the financial year ended March 31,
2024.

AUDITORS & AUDITORS'' REPORT
Statutory Auditors & their reports

Pursuant to the guidelines issued by RBI on April 27, 2021 for
appointment of Statutory Central Auditors (SCAs)/ Statutory
Auditor (SAs) of Commercial Banks (excluding RRBs), UCBs
and NBFCs (including HFCs) vide its circular No. RBI/2021-
22/25 Ref. No DoS.CO.ARG/SEC.01/08.91.001/2021-22
("RBI Circular"), the Company is required to appoint the
Statutory Auditors for a continuous period of 3 (three)
years subject to the firm satisfying the eligibility norms. As
our existing Auditors M/s. S. R. Batliboi & Associates LLP
Chartered Accountants (Firm Registration No. 101049W/
E300004) had completed their term of 3 (three) years as
a Statutory Auditors of the Company, therefore in terms of
the aforesaid RBI Circular, they were not eligible to continue
as Statutory Auditor from the conclusion of 30^th Annual
General Meeting of the Company.

Further, the Board of Directors of the Company had
recommended the appointment of M/s S S Kothari Mehta
& Co. LLP (formerly known as S S Kothari Mehta & Co.),
Chartered Accountants, New Delhi, (Firm Registration
No. 000756N/N500441) issued by Institute of Chartered
Accountants of India, having a valid Peer Review Certificate
issued by the Peer Review Board of ICAI, as the Statutory
Auditors of the Company on the recommendation of the
Audit Committee, for a term of three (3) years.

Accordingly, M/s S S Kothari Mehta & Co. LLP (formerly
known as S S Kothari Mehta & Co.), Chartered Accountants,
New Delhi, (Firm Registration No. 000756N/N500441), have
been appointed as the Statutory Auditors of the Company
at the 30^th Annual General Meeting ("AGM") of the Company
held on September 29, 2023, on the recommendation of
Audit Committee and Board of Director''s in conformity with
the provisions of Sections 139 and 141 of the Companies
Act, 2013 read with the Companies (Audit and Auditors)
Rules, 2014 (includes amendments thereto) and in
accordance with the aforesaid RBI Circular read with the
Company''s policy on Appointment of Statutory Auditors for
a period of 3 (three) years from the conclusion of the AGM
(for F.Y. 2022-23) till the conclusion of the 33^rd AGM (for F.Y.
2024-25) subject to the applicable provisions from time to
time.

The Statutory Auditors have confirmed that they are not
disqualified from continuing as the Statutory Auditors of
the Company.

The Auditors'' Report for the financial year 2023-24 does
not contain any qualification, reservation, adverse remark
or disclaimer. Further, there were no instances of any fraud
reported by the Statutory Auditor to the Board pursuant to
Section 143 (12) of the Companies Act, 2013.

The Board has placed on record its sincere appreciation
for the services rendered by M/s S S Kothari Mehta & Co.
LLP, Chartered Accountants, as Statutory Auditors of the
Company.

Secretarial Auditors & their Report:

In terms of Section 204 of the Companies Act, 2013 read
with Rules framed thereunder, the Company is required to
appoint Secretarial Auditors to carry out the secretarial
audit of the Company.

M/s Brajesh Kumar & Associates, Company Secretaries has
been with the Company from past many years. However, for
good corporate governance and to align with Company''s
future plans, it was decided to rotate the existing Secretarial
Auditors and after careful evaluation with experience in
auditing listed companies and NBFCs and based on the
recommendation of the Audit Committee, the Company
had appointed M/s Sanjay Grover & Associates, Company
Secretaries as Secretarial Auditors of the Company for the
financial year 2024-25 in its meeting held on May 24, 2024.

The Company has provided all the assistance and the
facilities to the Secretarial Auditors for conducting the
Secretarial Audit. Secretarial Audit Report as provided by
M/s Brajesh Kumar & Associate is also annexed to this
Report, in the prescribed Form No. MR-3, as Annexure-C. The

Secretarial Audit Report does not contain any qualification,
reservation, adverse remarks, or disclaimer.

The Board has placed on record its sincere appreciation for
the services rendered by M/s. Brajesh Kumar & Associates,
Company Secretaries as Secretarial Auditors of the
Company for the Financial Year 2023-24.

FRAUDS REPORTED BY AUDITORS

During the period under review, neither the Statutory Auditors
nor the Secretarial Auditors have reported to the Audit
Committee/ Board or Central Government any instances
of fraud in the Company by its officers or employees under
Section 143(12) of the Companies Act, 2013.

However, there have been few instances of embezzlement
of cash by staff, involving amount to aggregating to '' 0.42
crore. In such cases, employees were terminated from their
services and legal action has also initiated against such
employees.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 11 (eleven) times during the year
under review. The details of the same have been included in
the Corporate Governance Report, which forms part of the
Annual Report.

BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

A. Board of Directors

The Board of Directors, along with the Committees of
the Board, provides leadership and guidance to the
Company''s Management and directs, supervises and
controls the activities of the Company.

As on March 31, 2024, the Board of Directors of the Company consists of 8 (eight) Directors. The details are as follows:

S. No.	Name of Directors	Category
1.	Dr. Govinda Rajulu Chintala*	Chairperson, Non-Executive & Independent Director
2.	Mr. Sanjaya Gupta	Non-Executive & Independent Director
3.	Ms. Kanika Tandon Bhal	Non-Executive & Independent Director
4.	Mr. Sanjay Sharma	Managing Director
5.	Mr. Kartik Srivatsa	Non-Executive & Non-Independent Director
6.	Mr. Kaushik Anand Kalyana Krishnan	Non-Executive & Non-Independent Director
7.	Mr. Vivek Kumar Mathur	Non-Executive & Non-Independent Director
8.	Mr. Navroz Darius Udwadia	Non-Executive & Non-Independent Director

*Designated as Chairperson of the Board effective from January 05, 2024.

During the year under review, Non-Executive Directors
of the Company had no pecuniary relationship or
transactions with the Company. The Independent
Directors were paid sitting fees for attending each
meeting of the Board of Directors or any Committee
thereof in accordance with the limit as approved by
Board and Nomination & Remuneration Committee of
the Company.

The Composition of the Board is in accordance
with Section 149 of the Companies Act, 2103 and
Regulation 17 of SEBI Listing Regulations with an
optimum combination of Executive & Non-Executive
Directors. The change in the Board of Directors during
the financial year upto the date of this report are as
follows:

¦ Appointment/Re-appointment:

Appointment of Independent Directors

Based on the recommendation of Nomination and
Remuneration Committee & Board of Directors,
Members of the Company at their Extra-Ordinary
General Meeting held on September 01,2023 had
approved the appointment of following directors
as Non-Executive & Independent Director of the
Company for a term of 5 (five) consecutive years
effective from September 01, 2023:

• Dr. Govinda Rajulu Chintala (DIN: 03622371)

• Mr. Sanjaya Gupta (DIN: 02939128)

• Ms. Kanika Tandon Bhal (DIN: 06944916)

Further, Based on the recommendation of
Nomination and Remuneration Committee & Board
of Directors, Members of the Company at their
Extra-Ordinary General Meeting held on August
16, 2024 had approved the appointment of Mr.
Vinay Baijal (DIN: 07516339) as an Independent
Director for a term of 5 (five) consecutive
years, not liable to retire by rotation, effective
from August 16, 2024 and in accordance with
Regulation 17(1A) of SEBI Listing Regulations, to
continue as an Independent Director beyond June
15, 2026, on account of his attaining the age of 75
years on the said date.

The Board is of the opinion that above directors
are the person of integrity, expertise, and possess
competent experience and proficiency to serve
the Company as an Independent Directors that
can strengthen the overall composition of the
Board.

Appointment of Non-Executive & Non¬
Independent Director

Pursuant to Amended and Restated Shareholders
Agreement dated December 06, 2023, Investors
have a right to nominate and maintain 1 (one)
Nominee Director on the Board of the Company.

In view of the above, British International
Investment plc ("BII") had recommended
Mr. Gaurav Malhotra (DIN: 07640504) as its

Director (representative of BII), to be appointed in
the Board of the Company. Basis that Nomination
and Remuneration Committee & Board after
considering the fit & proper criteria recommended
the appointment of Mr. Gaurav to the Members
of the Company. The members in its Extra¬
Ordinary General Meeting held on June 26, 2024
had approved the appointment of Mr. Gaurav
Malhotra (DIN: 07640504) as Non-Executive &
Non-Independent Director of the Company, not
liable to retire by rotation, for a term of 5 (five)
consecutive years effective from June 26, 2024.

¦ Resignation/Cessation:

During the year under review, the following
Non-Executive & Independent Directors of the
Company were resigned from the Company
effective from September 02, 2023:

• Ms. Arpita Pal Agrawal (DIN: 08588528)

• Mr. Navin Kumar Maini (DIN: 00419921)

• Mr. Vinay Baijal (DIN: 07516339)

The Board place on its record its appreciation for
the valuable contribution of above Directors in
the sustained growth of the Company during their
tenures.

¦ Continuation of Non-Retiring Director

In compliance with sub-regulation 17(1D) of
the SEBI (Listing Obligations and Disclosure
Requirements) (Second Amendment)
Regulations, 2023, effective from April 01, 2024,
the continuation of a director on the Board of a
listed entity requires shareholder approval in a
general meeting at least once every five years
from their appointment or reappointment date.

Additionally, any director serving on the Board
as of March 31, 2024, who has not received
shareholder approval within the last five years
or more, must obtain such approval at the first
general meeting held after March 31,2024.

In view of the above requirement, on the
recommendation of Nomination and
Remuneration Committee & Board of Directors,
the Members of the Company at their Extra¬
Ordinary General Meeting held on June 26, 2024
had approved the continuity of Directorship of
following directors on the Board, for a period of 5
(five) years and not liable to retire by rotation:

(i) Mr. Navroz Darius Udwadia (DIN: 08355220)
as Non-Executive & Non-Independent
Director of the Company representing Alpha
Wave India I LP

(ii) Mr. Vivek Kumar Mathur (DIN: 03581311) as
Non-Executive & Non-Independent Director
of the Company representing Elevation
Capital V Limited.

(iii) Mr. Kartik Srivatsa (DIN: 03559152) as Non¬
Executive & Non-Independent Director of the
Company representing LGT Capital Invest
Mauritius PCC with Cell E/VP

(iv) Mr. Kaushik Anand Kalyana Krishnan
(DIN: 07719742) as Non-Executive & Non¬
Independent Director of the Company
representing A91 Emerging Fund I LLP

B. Key Managerial Personnel

As on March 31, 2024, Mr. Sanjay Sharma, Managing
Director, Mr. Krishan Gopal, Chief Financial Officer and
Ms. Tripti Pandey, Company Secretary, Compliance
Officer & CCO are the Key Managerial Personnel of
the Company in accordance with the provisions of
Sections 2(51) and 203 of the Companies Act, 2013
read with Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014.

During the year under review, Mr. Sanjay Sharma''s
current term as Managing Director of the Company
was going to expire on July 4, 2024. Under his
commendable leadership, the Company has seen
significant growth and achieved impressive results,
even with the challenges brought on by the nearly
two-year Covid pandemic. Recognizing the need for
ongoing progress and aligning with future plans, the
members on the recommendation of Nomination and
Remuneration Committee and the Board of Directors
approved the reappointment of Mr. Sanjay Sharma at
the Extra-Ordinary General Meeting held on June 26,
2024, for another consecutive term of 5 (five) years,
effective from July 5, 2024 to July 4, 2029 (both days
inclusive).

Further, Mr. Krishan Gopal was appointed as Chief
Financial Officer and Key Managerial Personnel of
the Company effective July 07, 2023, succeeding
Mr. Mayank Shyam Thatte, who resigned effective May
24, 2023 (close of business hours) due to personal
reasons.

Furthermore, Mr. Vipul Sharma was appointed as
Company Secretary, Compliance Officer, and CCO
(Key Managerial Personnel) effective May 25, 2024,
succeeding Ms. Tripti Pandey and she continues to
serve as Deputy Company Secretary of the Company.
The Board place on its record its appreciation for the
valuable contribution of Ms. Tripti in the sustained
growth of the Company during her tenure.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors and there is an appropriate
balance of skills, experience and knowledge in the Board
to enable the Board to discharge its functions and duties
effectively. The Independent Directors have submitted
disclosure that they continue to meet the criteria of
independence as provided under Section 149(6) of
the Companies Act, 2013 and Regulation 16(1 )(b) of
SEBI Listing Regulations and they are not aware of
any circumstance or situation, which exists or may be
reasonably anticipated, that could impair or impact
their ability to discharge their duties with an objective
independent judgement and without any external influence.

In the opinion of the Board of Directors, the Independent
Directors fulfil the conditions specified in the Companies
Act, 2013 and rules made thereunder for appointment as
Independent Directors including the integrity, expertise
and experience & confirm that they are independent of the
management.

In terms of Section 150 of the Act read with Rule 6(1) and
6(2) of the Companies (Appointment and Qualification of
Directors) Rules, 2014, the Independent Directors of the
Company have also confirmed that they have registered
themselves with the databank maintained by the Indian
Institute of Corporate Affairs.

COMPLIANCE WITH RBI GUIDELINES

The Company has complied and continues to comply with
Master Direction - Reserve Bank of India (Non-Banking
Financial Company - Scale Based Regulation) Directions,
2023 ("RBI Scale Based Regulation”), as amended from
time to time [earlier Non-Banking Financial Company-
Non-Systemically Important Non-Deposit taking (Reserve
Bank) Directions, 2016] and all the applicable regulations

and guidelines issued by RBI such as Capital Adequacy, Net
Owned Funds, provisioning for Non-Performing Assets and
for Standard Assets, Concentration of Credit and Investment
and filings, etc.

The Company continues to fulfil all the norms and standards
laid down by the RBI pertaining to capital adequacy,
statutory liquidity assets etc. The Capital Adequacy Ratio
("CAR") of the Company was 32.79% as on March 31, 2024
which is well above the RBI mandated norm.

In accordance with the above RBI Scale Based Regulation,
the Company is classified under the Middle Layer NBFC
category.

COMPLIANCE WITH SECRETARIAL STANDARDS

All applicable mandatory Secretarial Standards i.e. SS - 1,
SS - 2 relating to ''Meetings of the Board of Directors'', and
''General Meetings'' (as amended from time to time) issued
by the Institute of Company Secretaries of India have been
duly complied by the Company during the period under
review.

POLICIES

¦ VIGIL MECHANISM/WHISTLE BLOWER

The Company is committed to highest standards of
ethical, moral and legal business conduct. Accordingly,
the Board of Directors has established a Vigil
Mechanism through Whistle Blower Policy which is in
compliance with the provisions of Sections 177(9) &
(10) of the Companies Act, 2013 read with rule 7 of
Companies (Meetings of Board and its Powers) Rules,
2014 and Regulation 22 of SEBI Listing Regulations.
The Policy provides adequate safeguard against
victimisation to the Whistle Blower and enables them
to raise concerns and also provides an option of direct
access to the Chairman of Audit Committee. During
the period under review, none of the personnel have
been denied access to the Chairman of the Audit
Committee.

During the period under review, no complaints were
received by the Company under the vigil mechanism.

The Whistle Blower Policy is also available at https://
www.ayefin.com/policies/

¦ NOMINATION AND REMUNERATION POLICY

In order toset our principals, parameters and governance
framework of the remuneration for Directors, Manging
Director, Key Managerial Personnels and employee
of the Company and in terms of Section 178 of the
Companies Act, 2013, Regulation 19 of SEBI Listing
Regulations and RBI Master Direction - Scale Based
Regulations dated October 19, 2023, as amended from
time to time, the Company has in place Nomination
and Remuneration Policy which contains appointment,
reappointment, removal and remuneration including
criteria for determining qualifications, positive
attributes of Director & Key Managerial Personnels.

The Nomination and Remuneration Policy is also
available at https://www.ayefin.com/policies/

The composition of the Nomination and Remuneration
Committee & its terms of reference and the details
of meetings attended by the Nomination and
Remuneration Committee members are provided in
Corporate Governance Report which forms part of the
Annual Report.

DETAILS OF SIGNIFICANT OR MATERIAL ORDERS
PASSED BY REGULATORS OR COURTS OR TRIBUNAL

During the period under review, there were no significant
or material orders passed by the regulators or courts
or tribunals impacting the going concern status of the
Company and its operations in future.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of Cost
Audit as specified by the Central Government under sub¬
section (1) of Section 148 of the Companies Act, 2013 is
not applicable on the Company.

HUMAN RESOURCES

As on March 31, 2024, the Company had 7,001 permanent
employees at its branches, regional office and Head office.
The Company recognises the importance of human value
and ensures that proper encouragement both moral and
financial is extended to employees to motivate them. The
Company enjoyed excellent relationship with workers and
staff throughout the year.

(A) Conservation of Energy: (i) the steps taken or impact on conservation of energy: (ii) the steps taken by the Company for utilising alternate sources of energy: (iii) the capital investment on energy conservation equipment''s:	The operations of the Company, being Financial Services related, require normal consumption of electricity. The Company is taking every necessary step to reduce the consumption of energy. In view of the nature of activities carried on by the Company, there is no capital investment on energy conservation equipment. The Company, being engaged in financing business within the Country, does not have any activity relating to conservation of energy. The Directors, therefore, have nothing to report on investment in equipment for conservation of energy.
(B) Technology Absorption: (i) the efforts made towards technology absorption: (ii) the benefits derived like product improvement, cost reduction, product development or import substitution: (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): (iv) the expenditure incurred on Research and Development:	The Company has seen successful implemented Lead Management, Loan Origination, Collection Management, Navision ERP and Data Warehouse systems. The Company has also adopted the policies as per the RBI master directions applicable on Systemically Important NBFCs. With new systems in place, the Company has achieved seamless flow of data across various systems, making information flow faster, more robust and reliable. The Company has also set up the Data Science department. The initiatives by Data Science and Artificial Intelligence (DSAI) department are focusing on use cases to help data-driven decision-making using data- insights, AI/ML models, and intelligent automation of processes. In addition to a couple of initial projects including a machine learning model for behavioural scoring of customers. The Company has also initiated working on streamlining and collating data from multiple systems and sources into a coherent repository - a data lake which would be a key enabler infrastructure for many of the future DSAI projects allowing seamless access to most of the data generated across the organisation in a timely manner. The Company, being engaged in financing business within the Country, does not have any activity relating to technology absorption and export of materials, goods or services. The Directors, therefore, have nothing to report on Technology absorption.
(C) Foreign Exchange Earnings and Outgo	The Foreign Exchange earnings and Foreign Exchange outgo during the year under review are as below:
	Particulars	Amount (''in crore)	Purpose
	Foreign Exchange Earnings	1.27	Grant received
	Foreign Exchange Outgo	22.04	IT related expenses, Subscription fee, Appraisal fee, Depository charges & ECB Interest payment
	There was no unhedged foreign currency exposure in the Company as on March 31, 2024.

EMPLOYEE STOCK OPTION PLAN

The Company has adopted the Aye Finance Employee Stock Option Plan, 2024 (ESOP 2024) which was approved by the Board
of Directors in their meeting held on June 25, 2024 and by the shareholders of the Company by way of special resolution in
their Extra-Ordinary General Meeting held on June 26, 2024.

Nomination and Remuneration Committee (NRC) is empowered to formulate the detailed terms and conditions of the ESOP
2024, administer and supervise the same. The eligible employees of the Company to whom the options are granted, and their
eligibility criteria is determined by the NRC.

Details of ESOP disclosure pursuant to Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and the provisions
of Section 62 of the Companies Act, 2013 read with rules framed thereunder as on March 31,2024 are appended below:

Sr. No.	Particulars	ESOP 2016	ESOP 2020
1.	Options granted	6,01,303	10,99,630
2.	Options vested during the year	3,44,750	2,46,741
3.	Options exercised	-	-
4.	The total number of shares arising as a result of exercise of option	NA	NA
5.	Options lapsed/Surrendered	3,01,164	1,19,836
6.	The exercise price	NA	NA
7.	Variation of terms of options	NA	NA
8.	Money realised by exercise of options	NA	NA
9.	Total number of options in force	3,00,139	9,79,794
10.	Details of options granted to: (i) Key Managerial Personnel Options Granted:	5,055	69,604
	Options Vested:	3,539	1,469
	Options lapsed/Surrendered:	3,286	-
	Total number of options in force:	1,769	69,604
	(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during	Nil	Nil
	that year (iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding	Nil	Nil
	outstanding warrants and conversions) of the Company at the time of grant.

PERFORMANCE EVALUATION

Pursuant to the provisions of Section 178 of the Companies
Act, 2013 read with rules made thereunder, Regulation 17(10)
read with Part D of Schedule II of SEBI Listing Regulations,
the Nomination and Remuneration Committee and Board of
Directors have specify the criteria or manner for effective
evaluation formulated a policy for performance evaluation
(same is covered under the Nomination and Remuneration
Policy of the Company) of its own performance, of various
mandatory Committees of the Board and of the individual
Directors.

Further, in terms of the provisions of Regulation 19(4)
read with Part D of SEBI Listing Regulations. In view of the
Board approved Nomination and Remuneration Policy, the
Independent Directors in their separate meeting held on
March 27, 2024 under Schedule IV of the Companies Act,
2013 had:

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

ii. reviewed the performance of the Chairperson of the
Company, taking into account the views of executive
and non-executive Directors; and

iii. Assessed the quality, quantity and timelines of flow
of information between the Company management
and the Board that was necessary for the Board to
effectively and reasonably perform their duties.

Further, in terms of the provisions of Section 178 of the
Companies Act, 2013 read with rules made thereunder and
Regulation 19(4) read with Part D of Schedule II of SEBI
Listing Regulations, the performance evaluation process
of all the Independent and Non-Independent Directors
of the Company were carried out by the Nomination and
Remuneration Committee in its meeting held on March 20,
2024 and made recommendation to the Board.

Further, in terms of Regulation 17(10) of SEBI Listing
Regulations and Schedule IV of the Companies Act,
2013, the Board of Directors took into consideration the
recommendation received from the Nomination and

Remuneration Committee and completed the performance
evaluation process in their meeting held on March 27, 2024.

The entire performance evaluation process was completed
to the satisfaction of Board.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the
Companies Act, 2013 read with Rule 12 of the Companies
(Management & Administration) Rules, 2014, copy of
Annual Return for the financial year ended March 31, 2024
is available on the website of the Company at https://www.
ayefin.com/wp-content/uploads/2024/09/Annual-Return_
MGT_7_2023-24.pdf.

PARTICULARSOFLOANS,GUARANTEESORINVESTMENTS
UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Since, the Company is Non-Banking Financial Company,
the disclosures regarding particulars of the loans given,
guarantees given and security provided is exempt under the
provisions of Section 186(11) of the Companies Act, 2013
read with rules made thereunder, as amended. Further, the
details of investments made by the Company are given in
the Notes to the Financial Statements.

PARTICULARS OF RELATED PARTY TRANSACTIONS

The Company has Board approved Related Party Transaction
Policy and Policy on Determining Materiality of Related
Party Transactions (RPT Policy). The Policy provides for
identification, necessary approvals by the Audit Committee/
Board, reporting and disclosure requirements in compliance
with the requirements of the Companies Act, 2013 and
SEBI Listing Regulations. During the year under review, the
Company has revised its RPT Policy, in accordance with
the amendments to applicable provisions of the Act/SEBI
Listing Regulations.

All transactions entered by the Company during the financial
year with related parties were on arms'' length basis and in
the ordinary course of business as per the RPT Policy of
the Company and in compliance with the provisions of the
Companies Act, 2013 and SEBI Listing Regulations

During the year under review, the Company has not entered
into any contracts/arrangement/transaction with related
parties which could be considered material in accordance
with Regulation 23 of the SEBI Listing Regulations and
the RPT Policy of the Company. The RPT Policy may be
accessed on the website of the Company and the web-link
of the same is https://www.ayefin.com/policies/

The details of the related party transactions as per Indian
Accounting Standards (IND AS) - 24 are set out in Notes to
the Financial Statements of the Company.

The Company in terms of Regulation 23 of the SEBI Listing
Regulations regularly submits within the prescribed time
from the date of publication of its financial results for the
half year, disclosures of related party transactions in the
format specified, to the stock exchange(s).

The disclosure of Related Party Transactions as required
under Section 134(3)(h) of the Act in form AOC-2 is not
applicable.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013

The Company has always believed in providing a safe and
harassment-free workplace for every individual working on
the Company''s premises through various interventions and
practices. The Company always endeavours to create and
provide an environment that is free from discrimination and
harassment including sexual harassment.

The Company has in place a robust policy on the prevention
of sexual harassment in the workplace. The policy aims at
the prevention of harassment of employees and lays down
the guidelines for identification, reporting, and prevention
of sexual harassment.

There is an Internal Complaints Committee (ICC) which is
responsible for redressal of complaints related to sexual
harassment and follows the guidelines provided in the
policy. During the year ended March 31, 2024, there was no
case reported to the committee.

OTHER DISCLOSURES

• There are no details required to be reported with
regards to difference between amount of the valuation
done at the time of one-time settlement and the
valuation done while taking loan from the Banks or
Financial Institutions as the Company has not done
any settlement with any Bank or Financial Institutions
since its inception.

• The Company has neither filed any application nor
any proceedings pending under the Insolvency and
Bankruptcy Code, 2016 during the reporting year,
hence no disclosure is required under this section.

• The Company has not issued any sweat equity shares
or equity shares with differential voting rights during
the year.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record their sincere
appreciation for the continued support and cooperation
received from shareholders, bankers, other stakeholders,

various regulatory & government authorities and employees
of the Company. Your support as shareholders of the
Company is greatly valued by us. Board acknowledges your
continued association and support in the growth of the
organisation.

For and on behalf of the Board of Directors of

Aye Finance Private Limited

Sd/- Sd/-

Govinda Rajulu Chintala Sanjay Sharma

Chairperson & Independent Director Managing Director

DIN: 03622371 DIN: 03337545

Date: September 19, 2024 Place: Hyderabad Place: Gurugram