The Directors have pleasure in presenting before you their 39^th Annual Report together with the Audited Financial Statements of the Company for the Financial year ended 31^st March, 2023.

FINANCIAL SUMMARY/HIGHLIGHTS

The financial summary of the Company for the year under review, based on the standalone financial statements of the company, is given below for your consideration:-

For further details, kindly refer to the Financial Statements and Management Discussion & Analysis Report annexed as Annexure D-3, which forms part of this report.

STATE OF COMPANY’S AFFAIRS/ BRIEF DESCRIPTION OF THE COMPANY’S WORKING DURING THE YEAR/HIGHLIGHTS/OPERATIONS IN TERMS OF SECTION 134 (3)(i) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(5)(I) OF THE COMPANIES (ACCOUNTS) RULES, 2014

The Company operates principally in three business verticals Foreign Exchange, Tours & T ravels and International Money T ransfer. During the year under review, Gross revenue from Foreign Exchange Services stood at Rs. 6874.68 Crores, Service Charges on Foreign Exchange Services stood at Rs. 6.54 crores. In Tours & Travel Segment, Turnover from Hotel Bookings & Packages stood at Rs. 4.08 crores and Revenue from other activities in the said segment stood at Rs. 1.94 crores. Gross revenue from International Money Transfer stood at Rs. 35.28 Lakhs. Other operating revenues stood at Rs 12.16 Crores. The Profit before tax stood at Rs. 34.96 Crores and Profit after tax stood at Rs. 25.98 crores after adjusting for deferred Tax. For further details, kindly refer to the Financial Statements, Management Discussion & Analysis Report annexed as Annexure D-3.

ANNUAL RETURN

In terms of Section 134 (3)(a) of the Companies Act, 2013 (hereinafter to be referred to as Act) the Annual Return as referred to in sub section (3) of Section 92 is available on the weblink https://www.paulmerchants.net/paulmerchants/wp-

content/uploads/2023/08/MGT-7. pdf

NUMBER OF MEETINGS OF BOARD

The information in terms of Section 134(3)(b) of the Act is given below:-

During the Financial year 2022-23, 4 (Four) Board Meetings were held and 1 (One) Independent Directors meeting was held on 09-02-2023. The dates on which the Board Meetings were held are 12/05/2022, 10/08/2022, 14/11/2022 and 09/02/2023. Further details as required under Part C of Schedule V to the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given in the Corporate Governance Report, which is annexed as Annexure D-9, forming part of this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT-

Pursuant to Section 134 (3) (c) read over with Section 134 (5) of the Companies Act, 2013, your Directors confirm that:-

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

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

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

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

FRAUDS REPORTED BY AUDITORS

In terms of Section 134 (3)(ca) of the Act, there are no frauds reported by auditors under sub-section (12) of Section 143. Further, there are no frauds reported by auditors to the Central Government.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

It is hereby stated in terms of Section 134 (3)(d) of the Act, that all Independent Directors of the Company have given declarations that they meet the criteria of Independence as laid down under Section 149 (6) of the Companies Act, 2013 read over with Regulation 16(1)(b) and 25(8) of Listing Regulations. They have also given a declaration that their respective names have already been included in the data bank maintained by the Indian Institute of Corporate Affairs at Manesar and as such they are in compliance of sub-rule (1) and sub-rule (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION

Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board Members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMPs and other employees is attached as Annexure D-1 as Nomination and Remuneration Policy, which forms part of this report.

EXPLANATIONS OR COMMENTS BY THE BOARD IN TERMS OF SECTION 134(3)(f) ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:-

(i) by the Auditor in his report:-

M/s RAJIV GOEL & ASSOCIATES (Firm Regn. No. 011106N), Chartered Accountants, Chandigarh, were appointed as Statutory Auditors of the Company at the 36^th Annual General Meeting held on 29^th September, 2020 for a term of five consecutive years. The Auditors’ Report being self-explanatory, requires no comments from the Directors. Further, there are no reservations, qualifications, disclaimers, adverse remarks or Modified opinion in the Audit Reports issued by them in respect of Standalone as well as Consolidated Financial Statements of the Company for the Financial Year 2022-23.

(ii) by the Company Secretary in practice in his Secretarial Audit Report:-

Mr. Anil Singh Negi, a Company Secretary in practice having CP no. 17213 and Membership no. 46547 was appointed by the Board of Directors as Secretarial Auditor of the Company for the financial year under review pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by him in the prescribed form MR-3 is annexed as Annexure D-2 and forms part of this report. In the said Secretarial Audit Report, the Secretarial Auditor has included the following commentcuring the audit period, BSE Limited has imposed penalty on the company for delay of one day in the filing of Statement of Related Party Transactions for the half year ended

31.03.2022.”

Your Directors wish to place on record that the company has duly paid the penalty imposed by BSE Ltd. Further, the Company has also filed an application/appeal for waiver of the said penalty with the Fine Waiver Committee of BSE Limited, inter alia, on below grounds: -

1. The SEBI LODR (6^th Amendment) Regulations, which mandated filing of Statement of Related Party Transactions in terms of regulation 23(9) was effective from

01.04.2022, whereas the Statement in question was filed by the Company in respect of transactions pertaining to the period prior to 01.04.2022. The position had been made more clear by BSE vide its Guidance Note issued by it on 25-04-2022, whereby vide answer to query no. 4, it made abundantly clear that Definitions/Provisions that are specifically mentioned to be effective from

01.04.2022, shall be applicable on transactions undertaken from 01.04.2022 onwards.

2. The Exchange has taken the due date as 15 days from the date of Board Meeting, which is not as per the language of the Regulation, which prescribes the due date to be 15 days from the date of publication. It is important to note here that the word

'publication' has been used in the Listing Regulations as specifically referring to publication of the Financial Results in Newspapers and as such, there is no reason to interpret the word 'publication' to refer to Board Meeting date.

3. Language of Sub regulation 6 of Regulation 23 also makes it clear that the said amendment could not be applicable to the transactions pertaining to the period, prior to its effective date, when it reads as "The provisions of this regulation shall be applicable to all prospective transactions”.

The said appeal filed by the Company is still pending with BSE Ltd.

There are no other qualifications, reservations, adverse remarks or disclaimer by the Secretarial Auditor in the Report issued by him for the financial year 2022-23 which call for any explanation from the Board of Directors.

Further, there is one material unlisted subsidiary of the Company M/s Paul Merchants Finance (Pvt) Limited during the Financial Year under review. As such, Secretarial Audit Report of the said material unlisted subsidiary has also been annexed to this Report as Annexure D-2A as required under Regulation 24A of Listing Regulations. There are no qualifications, reservations, adverse remarks or disclaimer by the Secretarial Auditor in the Report issued by him for the financial year 2022-23 which call for any explanation from the Board of Directors.

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

Pursuant to Section 134(3)(g) of the Act, particulars of Loans, Guarantees, Securities and Investments under Section 186 of the Act made during the Financial Year 2022-23 are attached as Annexure D-4 which forms part of this report. Further reference in this regard can be made to Note 2, 6, 9, 10, 37, 38 and 41 to the Financial Statements for further details.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013

With reference to Section 134(3)(h) of the Act read over with Rule 8(2) of the Companies (Accounts) Rules, 2014, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year were on an arm’s length basis and in the ordinary course of business. In the opinion of the Board, these transactions were justified to be executed because all the transactions had been entered into in the ordinary course of business of the Company in the furtherance of the business objectives. All the said transactions were done with prior approval of the Audit Committee and the Board as applicable. The transactions entered into pursuant to the omnibus approval of the Audit Committee were also placed regularly before the Audit Committee for its review. All the said transactions do not attract the provisions of Section 188 of the Companies Act, 2013 and as such, though not required under the said Section,

the details of these transactions have been given in Form AOC-2 on voluntary basis, annexed as Annexure D-5, which forms part of this report. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has also filed the reports on related party transactions with the Stock Exchange BSE Ltd.

During the year, the Company had not entered into any contract or arrangement with related parties which could be considered ‘material’ according to the policy of the Company on Materiality of Related Party Transactions. Your attention is also drawn to the Related Party disclosures set out in Note no. 41 of the Financial Statements for further details, forming part of this Annual Report.

Details of transaction(s) of your Company with entity(ies) belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required under para A of Schedule V of the Listing Regulations are NIL, as there is no such entity. Further, the details of transactions with persons belonging to the promoter/promoter group who hold(s) more than 10% shareholding in the Company, have been included in form AOC-2, annexed as Annexure D-5 to this Report.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at https://www.paulmerchants.net/paulmerchants/wp-content/uploads/2023/08/Determination-of-Materiality.pdf

RESERVES:-

Entire amount of Net Profit of Rs. 25,98,40,451/- and Other Comprehensive loss of Rs. 17,76,048/- for the year has been transferred to the Reserves under the head "Other Equity” in the Balance Sheet. No amount has been transferred or proposed to be transferred to any other reserves.

DIVIDEND:-

Your Directors have decided to reinvest the earnings in the growth of business and for this reason, have decided to not to recommend any amount for declaration of Dividend for the year under review. Hence, information required in terms of Section 134(3)(k) of the Act is Nil. The provisions regarding formulation of Dividend Distribution Policy were not applicable to the company during the FY 2022-23.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes or commitments, effecting the Financial position of the Company happening between the end of the Financial Year 2022-23, to which the

Financial Statements relate and date of this Report. Hence, information as required in terms of Section 134(3)(l) of the Act is Nil.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The requisite information in terms of Section 134(3)(m) of the Act read over with Rule 8(3) of Companies (Accounts) Rules, 2014 has been given as per Annexure D-6, annexed to this Report.

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY IN TERMS OF SECTION 134(3)(n) OF THE ACT

The Company has in place a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company and also the comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically as per the Risk Management Policy of the Company, framed in terms of the Companies Act, 2013 and Regulation 17(9)(b) of the Listing Regulations. The Board oversees the preparation of Risk Management Policy, reviews and monitors the same on regular basis and ensures to identify and review critical risks on regular basis, to update the Risk management policy on regular basis, to review key changes in critical risks and to issue instructions on the same to the Management and the Risk Management Committee on an ongoing basis and such other functions as it deems fit. The Company has formulated Risk Management Policy which provides an overview of the principles of risk management, explains the approach adopted by the Company for risk management, defines the organizational structure for effective risk management, develops a "risk” culture that encourages all employees to identify risks and associated opportunities and to respond to them with effective actions, identify, assess, manage and mitigate existing and new risks including the elements of risk that may threaten the existence of the Company, in a planned and co-ordinated manner with minimum disruption and cost, to protect and preserve Company’s human, physical and financial assets. Though not covered under Regulation 21(5) of Listing Regulations, during the year under review the Company has constituted a Risk Management Committee, comprising Members of the Board and Senior Management Team of the Company as its members. This Committee monitors and reviews the risk management plan apart from performing other functions as specified by the Board of Directors. The risks faced by the Company and their minimization procedures are assessed categorically under the broad heads of High, Medium and Low risks. Further, the Company identifies risks and control systems are instituted to ensure that the risks in each business process are minimized/mitigated. The Board provides oversight and reviews the Risk Management Policy periodically.

THE DETAILS ABOUT THE POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON CORPORATE SOCIAL RESPONSIBILITY INITIATIVES TAKEN DURING THE YEAR IN TERMS OF SECTION 134(3)(o) OF THE ACT:-

The details about the policy developed and implemented by the Company on Corporate Social Responsibility initiatives taken during the year under review in the form of CSR Policy is available on the website of the Company at https://www.paulmerchants.net/paulmerchants/wp-content/uploads/2022/07/CSR-Policy.pdf

During the year 2022-23, the Company has undertaken various Corporate Social Responsibility initiatives in accordance with the CSR Policy of the Company and Schedule VII to the Companies Act, 2013. The Annual Report on CSR activities undertaken by the Company during the year under review is furnished in Annexure D-7, which forms part of this report. Further, in terms of Section 135 of the Companies Act, 2013, the Company has a duly constituted CSR Committee of the Board and the said Committee had following composition as on March 31,2023:-

Other details of the CSR Committee and CSR Policy is furnished in the Report on Corporate Governance, which is annexed as Annexure D-9 to this report.

A STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS HAS BEEN MADE IN TERMS OF SECTION 134(3)(p) OF THE ACT READ OVER WITH RULE 8(4) OF THE COMPANIES (ACCOUNTS) RULES, 2014:-

Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has put in place a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of Directors of the Company, its Committees and Individual Directors, including Independent Directors. Accordingly, following is the criteria for evaluation:-

a. Criteria for evaluation of the Board of Directors as a whole:

(i) The Frequency of Meetings

(ii) Quantum of Agenda

(iii) Administration of Meetings

(iv) Flow and quantity of Information from the Management to the Board (vi) Overall performance of the Company

b. Criteria for evaluation of the Board Committees:

(i) The Frequency of Meetings

(ii) Quantum of Agenda

(iii) Administration of Meetings

(iv) Flow and quantity of Information from the Management to the Committee

(v) Role of Committees.

(vi) Contribution to the decision making process of the Board.

c. Criteria for evaluation of the Individual Directors including Independent Directors;

(i) Experience and ability to contribute to the decision making process

(ii) Problem solving approach and guidance to the Management

(iii) Attendance and Participation in the Meetings

(iv) Personal competencies as per Chart given in the Nomination and Remuneration Policy and contribution to strategy formulation

(v) Contribution towards statutory compliances, monitoring of controls and Corporate Governance

(vi) The evaluation of independent directors shall be done by the entire board of directors which shall include:-

(a) Performance of the directors; and

(b) fulfillment of the independence criteria as specified in the Companies Act, 2013 and Listing Regulations and their independence from the management:

Provided that in the above evaluation, the directors who are subject to evaluation shall not participate

The performance evaluation of all the Independent Directors shall be done by the entire Board and while doing so, the Director subject to evaluation shall not participate. On the basis of performance evaluation done by the Board, it will be determined whether to extend or continue their term of appointment, whenever their respective term expires.

Accordingly, the annual performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors has been carried by the Board in its Meeting held on 23-05-2023 in terms of the provisions of Section 134 (3) (p) of the Companies Act, 2013 read over with Rule 8(4) of Companies (Accounts) Rules, 2014 and also in terms of Regulation 17(10) of the Listing Regulations as per above criteria and the Board expresses its satisfaction over the performance of the Board of the Company, its Committees and Individual Directors, including Independent Directors. The performance evaluation of all the Independent Directors have been done by the entire Board and while doing so, the Director subject to evaluation had not participated. On the basis of performance evaluation done by the Board, it is determined whether to extend or continue their term of appointment, whenever their respective term expires.

The Independent Directors had met separately on 09-02-2023 without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non-Executive Directors.

The Nomination and Remuneration Committee has also carried out evaluation of every Director's performance, performance of the entire Board of the Company as a whole and all its Committees in its meeting held on 12-05-2023.

The Directors express their satisfaction over the evaluation process.

HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES/ASSOCIATES/JOINT VENTURES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY DURING THE FINANCIAL YEAR UNDER REVIEW

The information in terms of Rule 8 (1) of Companies (Accounts) Rules is given below:-

The Company has two Wholly Owned Subsidiaries namely:-

a. Paul Merchants Finance (Pvt) Ltd., which is engaged in the business of Gold Loans, Business/personal loans, distribution of Insurance products and PPI Instruments.

b. PML Realtors (Pvt) Ltd., which is engaged in buying and selling of Real Estate Properties.

The Company had one Joint Venture (JV) Company in the name of M/s Horizon Remit Sdn. Bhd. Malaysia. The Company was holding 19.424% equity stake in the said Joint Venture Company. Delphi World Money Limited (Formerly known as EbixCash World Money India Limited and earlier as Weizmann Forex Ltd. (CIN L65990MH1985PLC037697) holding 19.424% equity stake, Transcorp Enterprises Limited (CIN U65922RJ1995PLC010050) holding 20% equity stake and Western Union Processing Limited, an Irish Limited Liability Company holding 40% equity stake were the other partners in the said Joint Venture Company. The Company along with other shareholders except Delphi World Money Limited, had executed a Share Purchase Agreement with Al Jadeed Investment International, Muscat, Sultanate of Oman for sale their stake in the said JV Company and as such, the Company has already transferred its stake in the said JV to the said purchaser on 25-11-2022. The investment in the Joint Venture had already been written down to Rs. Nil as of 01.04.2022 and during the financial year 2022-23, no further share in loss/profit of the JV has been included in the consolidated financial statements as per applicable IND-AS. Further, as per the terms of

the sale, the earlier shareholders of the JV including the company were to ensure that there was no outstanding non-current liability in the books of the JV on the date of transfer to the buyer. In accordance with such terms, company was obligated to contribute a total of USD 121200 towards its stake. As such, company had instructed the buyer to transfer company’s share of sale proceeds of USD 34380 (Rs. 25,56,497/-) directly to the creditor of the JV while balance USD 86820 was to be discharged separately by the company. The balance USD 86820, the company has already been recognized an equivalent current liability of Rs. 71,80,014/- in the Financial Statements of the Company for the FY 2022-23.

During the FY 2022-23, the Subsidiary Company Paul Merchants Finance (P) Ltd. achieved gross revenue of Rs. 1,10,97,62,198.99 as against previous year figures of Rs. 84,78,42,554.08, registering a growth of 30.89% over previous year. Further, the said Subsidiary Company achieved a Net profit after Tax of Rs. 18,94,45,155.64/- as against the previous year figures of Rs. 20,97,64,397.50/-.

During the FY 2022-23, the Subsidiary Company PML Realtors (P) Ltd., achieved gross revenue of Rs. 1,43,18,911.34/- as against previous year gross revenue of Rs 60,85,163.42/-. Further, the said Subsidiary Company achieved Net Profit after Tax of Rs. 46,44,825.40 as against previous year figures of Rs. 20,99,412.23/- registering a growth of 121.24% over previous year.

During the FY 2022-23 till 07.09.2022, the Joint Venture (JV) LLP M/s Paul Innovations LLP achieved gross revenue of Rs. 34,00,000/- as against previous year gross revenue of Rs. NIL. Further, the said JV earned net profit of Rs. 1,14,994/- as against previous year’s loss of Rs. 282,647/-. Paul Innovations LLP has been considered to be Joint Venture of the Company within the meaning of the IND AS till 07.09.2022 as the Company has withdrawn its entire stake in the said Joint Venture with effect from the said date and therefore the financial information of the said Joint Venture has only been consolidated upto the said and not thereafter.

On a consolidated basis, the revenue from operations for FY 2022-23 was Rs. 7010.90 crore registering growth by 30.68% over the previous year’s revenue of Rs. 5365.03 crore. The consolidated profit after tax (PAT) attributable to shareholders and noncontrolling interests for fY 2022-23 was Rs. 44.01 Crore as against the previous year figures of Rs. 40.17 Crore, registering a growth of 9.56%. The contribution by each Subsidiary/JV to the overall performance of the company during the period under report is detailed below:-

Report on the performance and Financial position of the Subsidiary Companies and Joint Venture Company in the specified format AOC-1 is annexed to the Directors’ Report as Annexure D-12.

CHANGE IN THE NATURE OF COMPANY’S BUSINESS

There is no change in the nature of Company’s business, during the year under review. Hence, information required in terms of Rule 8(5)(ii) of the Companies (Accounts) Rules, 2014 is nil.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR, IN TERMS OF RULE 8(5)(iii) OF THE COMPANIES (ACCOUNTS) RULES, 2014

DIRECTORS

Smt Sarita Rani Bansal (DIN 00094504), who was liable to retire by rotation, was reappointed as Director by the Shareholders in their Annual General Meeting held on 2909-2022.

Sh. Sat Paul Bansal (DIN: 00077499), who was liable to retire by rotation, was reappointed as Director by the Shareholders in their Annual General Meeting held on 2909-2022.

Sh. Dharam Pal Sharma (DIN 07284332) resigned from his position of Whole Time Designated Director w.e.f. 10/08/2022. Later, he was appointed as Chief Compliance Officer of the Company w.e.f. 11/08/2022.

Further, in accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Sh. Ritesh Vaid (DIN 09433856), Director of the Company retire by rotation in the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

The Brief Resume and other details relating to the Director who is proposed to be reappointed on retirement by rotation in the ensuing Annual General Meeting of the Company, as required to be disclosed under Regulation 36 of the Listing Regulations and as per Secretarial Standards-2, forms part of the Notice of Annual General Meeting.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 as on 31.03.2023 are as follows:-

There was no change (appointment or cessation) in the office of KMPs during the year under review.

A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR. IN TERMS OF RULE 8(5)(iiia) OF THE COMPANIES (ACCOUNTS) RULES. 2014

There was no appointment of any Independent Director in the Company during the year under review.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES. JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR UNDER REVIEW:-

The information as required in terms of Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014 is as under:-

No Company has become or ceased to be Company’s Subsidiary or Associate during the year under review.

W.e.f. 07-09-2022 the Company has withdrawn its share from M/s Paul Innovations LLP, which was considered to be a Joint Venture of the Company in terms of Ind AS 110. As such, the said LLP ceased to be the Joint Venture of the Company with effect from the said date.

W.e.f. 25-11-2022, the Company has disinvested its entire stake in the Joint Venture Company namely M/s Horizon Remit Sdn. Bhd., Malaysia and as such, the said Entity ceased to be Joint Venture of the Company with effect from the said date.

No Company has become to be Company’s Joint Venture during the year under review.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the Financial Year under review in terms of Chapter V of the Companies Act, 2013. As such information in this regard and about deposits which are not in compliance with the requirements of Chapter V of the Act, is nil. This information is in terms of Rule 8 (5) (v) and Rule 8 (5) (vi) of Companies (Accounts) Rules, 2014.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Company's operations in future. As such, the information in terms of Rule 8 (5) (vii) of the Companies (Accounts) Rules, 2014 is nil.

DETAILS IN RESPECT OF INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY WITH REFERENCE TO THE FINANCIAL STATEMENTS, IN TERMS OF RULE 8 (5) (viM) OF THE COMPANIES (ACCOUNTS) RULES, 2014

Your Company has in place sound internal financial control systems to ensure that all assets are protected against loss from any unauthorised use and all transactions are recorded and reported correctly. According to Section 134(5) (e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has a well placed, proper and adequate internal financial control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal Audit function is well defined in the Organization. The internal financial control system ensures that all assets are safeguarded and protected, that the transactions are authorised, recorded and reported correctly, that the business of the Company is conducted in an orderly and efficient manner, that frauds and errors are prevented and detected, that the accuracy and completeness of the accounting records is established and that reliable financial information is prepared in a timely manner. The Company’s internal financial control system also comprises due compliances with Company's policies and Standard Operating Procedures (SOPs) and compliance with SEBI (Prevention of Insider Trading) Regulations. The compliance is ensured by in-house Internal Audit Division, supplemented by Concurrent and Statutory Audit. The Internal Auditors independently evaluate the adequacy of internal controls and regularly audit the transactions. Independence of the audit and compliance is ensured by regular supervision by the Audit Committee over Internal Audit findings. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board on Quarterly basis. Auditor’s Independence, performance and effectiveness of audit process is also reviewed by the Audit Committee.

The Internal Financial Control systems in place in the Company have been reviewed by the Audit Committee in its meeting held on 22-05-2023 and by the Board of Directors of the Company in their meeting held on 23-05-2023 and have satisfied themselves that the Internal Financial Control systems in place in the Company are adequate.

DISCLOSURE AS TO COST AUDIT AND COST RECORDS

Maintenance of cost records as specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013 is not required by the Company and as such the Cost Audit is also not applicable to the Company. This disclosure is pursuant to Rule 8(5)(ix) of the Companies (Accounts) Rules, 2014.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT, 2013

Your Directors do hereby state in terms of Rule 8(5)(x) of the Companies (Accounts) Rules, 2014 that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 (14 of 2013) and has adopted a policy for prevention of Sexual Harassment of Women at workplace. During the year under review, the Company has not received any complaint of harassment.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE. 2016

There are no applications or proceedings under Insolvency and Bankruptcy Code, 2016 in relation to the Company and therefore, information as required under Rule 8(5)(xi) of the Companies (Accounts) Rules, 2014 for the year under review is Nil.

DETAILS OF 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 ALONG WITH THE REASONS THEREOF

There was no one time settlement with any Bank or Financial Institution by the Company during the year under review and as such, information required under Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014 is Nil.

DECLARATIONS ON COMPLIANCE WITH CODE OF CONDUCT BY DIRECTORS AND THE SENIOR MANAGEMENT PERSONNEL

The Annual Report of the Company contains a Declaration by the Managing Director in terms of Para D of Schedule V to the Listing Regulations on the declarations received from the Directors and the Senior Management personnel affirming compliance with the Code applicable to them during the year ended March 31, 2023. This Declaration has been given as Annexure D-8 to this Report.

REVIEW OF LEGAL COMPLIANCE REPORTS

During the year, the Board periodically reviewed compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the Management.

MAXIMUM TENURE OF INDEPENDENT DIRECTORS

The maximum tenure of independent directors is in accordance with the Companies Act, 2013 and Regulation 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The maximum tenure in one term of appointment of an Independent Director does not exceed 5 years and for two terms put together does not exceed 10 years in the Company.

SHARE CAPITALa. ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any shares with Differential Rights during the year under review.

b. ISSUE OF SWEAT EQUITY SHARE

The Company has not issued any Sweat Equity shares or Employee Stock Options during the year under review.

The Authorized Equity Share Capital of the Company as on 31^st March, 2023 was Rs. 2,00,00,000/- (Rupees Two Crores Only) and paid up Equity share capital was Rs. 1,02,80,000/- (Rupees One Crore Two Lakhs Eighty Thousand Only).

Further there was no buy back of its own shares by the Company and there was no other change in the share Capital of the Company during the year under review.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no other events to be reported under this head.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and is in compliance with the Corporate Governance Regulations as laid out in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As required under Regulation 34 (3) read with Part C of Schedule V to the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance is annexed herewith as Annexure -D-9 and forms a part of this Report.

A Compliance Certificate from Mr. Kanwaljit Singh Thanewal, a Company Secretary in practice having CP no. 5870, confirming compliance with the conditions of Corporate Governance by the Company is also annexed to this Report as Annexure -D-10 as required under Part E of Schedule V to the Securities And Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BUSINESS RESPONSIBILITY REPORT

Regulation 34 (2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company because the Company is not among top 1000 listed entities based on market capitalization as on 31 -03-2023.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Management Discussion & Analysis Report for the year under review, as stipulated under Part B of Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section as Annexure D-3, forming part of this Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1), 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure D-11 which forms part of this report.

DETAILS OF COMMISSION RECEIVED BY MANAGING DIRECTOR OR WHOLE TIME DIRECTOR

A sum of Rs. 1,10,00,000/- (Rupees One Crore Ten Lakhs Only) has been paid to Mr. Rajneesh Bansal, Managing Director of the Company, as commission for the Financial Year 2022-23 on the decision and recommendation of the Nomination and Remuneration Committee of the Company.

Further, no managing or whole-time director of the company, who is in receipt of Commission from the Company Paul Merchants Limited is receiving any remuneration or commission from any subsidiary company of Paul Merchants Limited and the Company has no holding company. As such, information required in terms of Section as 197(14) of the Companies Act, 2013 is NIL.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in enclosing the Consolidated Financial Statements of Paul Merchants Limited consolidating the financials of its Wholly Owned Subsidiary Companies Paul Merchants Finance (Pvt) Ltd and PML Realtors (Pvt) Ltd., the Joint Venture Company M/s Horizon Remit Sdn. Bhd., Malaysia as required by Section 129(3) of the Companies Act, 2013 (Act) and Listing Regulations. The investment in the Joint Venture Horizon Remit Sdn. Bhd., Malaysia had already been written down to Rs. Nil as of 01.04.2022 and during the financial year 2022-23, no further share in loss/profit of the JV has been included in the consolidated financial statements as per applicable IND-AS. Further, the consolidation of Financial Statements has also been done with M/s Paul Innovations LLP, considered to be a Joint Venture in terms of Ind AS 110 for the Financial Year 2022-23. The Company has withdrawn its share from the said LLP w.e.f. 07-09-2022 and therefore the financial information of the said Joint Venture has only been consolidated upto the date of transfer of its stake and not thereafter. The said Consolidated Financial Statements are prepared in accordance with the applicable Indian Accounting Standards.

INDIAN ACCOUNTING STANDARDS, 2015

The annexed financial statements for the Financial Year 2022-23 and corresponding figures for the Financial Year 2021-22 comply in all material aspects with Indian

Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

AUDIT COMMITTEE

Your Directors wish to inform that in Compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, an Audit Committee of the Board is duly constituted. The Audit Committee as on March 31, 2023 comprises of the following Independent Directors:-

Details of the Audit Committee have been given separately in the Corporate Governance report, which is annexed herewith as Annexure D-9. Further, all recommendations of Audit Committee were accepted by the Board of Directors.

NOMINATION & REMUNERATION COMMITTEE

In terms of Regulation 19 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the provisions of Section 178 (1) of the Companies Act, 2013, Nomination & Remuneration Committee of the Board is duly constituted. As on March 31, 2023 the Committee comprised of the following Directors:-

The details of Remuneration Policy and further details of this Committee are furnished in the Report on Corporate Governance, which is annexed as Annexure D-9 to this report.

In terms of Regulation 20 of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the provisions of Section 178 (5) of the Companies Act, 2013, the Stakeholders Relationship Committee of the Board is duly constituted. As on March 31, 2023 the Committee comprised of the following Directors:-

Other details of the Committee have been given separately in the Corporate Governance report, which is annexed herewith as Annexure D-9.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

There is no change in the Capital Structure of the Company during the year under review. The Shares of the Company are listed and traded at BSE Ltd under scrip code 539113.

VIGIL MECHANISM

The Company has established a Vigil Mechanism cum Whistle Blower Policy in terms of Section 177 (10) of the Companies Act, 2013 and also in terms of Regulation 4 (2) (d) and Regulation 22 of Listing Regulations. The details of the said Vigil Mechanism cum Whistle Blower Policy is given in the Corporate Governance Section, which is appended to this Report as Annexure D-9. The Vigil Mechanism cum Whistle Blower Policy is also available on the Company’s website under weblink https://www.paulmerchants.net/paulmerchants/wp-content/uploads/2021/08/Vigil-Mechanism-policy-07-02-2019.pdf

COMMITTEES OF BOARD

Pursuant to requirement under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has constituted various Committees of Board such as Executive Committee, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Further, though not covered under Regulation 21(5) of Listing Regulations, the Company has constituted a Risk Management Committee, comprising Members of the Board and Senior Management Team of the Company as its members. The details of composition and terms of reference of these Committees are mentioned in the Corporate Governance Report.

Relations between the Management and the employees at all levels have been cordial and the Directors wish to express their appreciation for the cooperation and dedication of the employees of the Company.

HUMAN RESOURCES DEVELOPMENT

The Company continuously explores new systems, processes and approaches to keep the human resources relevant in an ever evolving technology landscape. The Company continues to invest in leadership development programs at all levels to grow the workers into managers to support Company’s long term plans for growth and expansion. The Company has always believed that the people form the foundation of its success and continued growth. In all pursuits of the Company, the Human resources are treated as one of the key strengths playing a critical role in every walk of Company’s business. It will be a proud statement to make that the work force of the Company is a strategic business partner aligned with the business requirements of the Company. In the wake of ever rising quality demands of the customer coupled with Company’s long term vision to expand exponentially in the coming years, it has become imperative to build a proactive, smart and energized work force. At the Company, it has always been an endeavor to align the work force of the Company with the cultural set up of the Organization and safety and welfare of the people has always been Company’s top priority. The Company has a dynamic and robust performance evaluation system in place through which personal growth objectives of the employees are aligned with the organizational long term objectives so that people grow with the Company. As on 31-03-2023, the Company has 393 people on its rolls.

COMPLIANCE

The company has devised proper systems to ensure compliance of all laws applicable to the company and the compliance reports issued by the Departmental Heads along with the report of the Company Secretary under Section 205 of the Companies Act, 2013 are placed before the Board every Quarter confirming compliance by the Company with all applicable Laws. In addition, the Internal Audit and Concurrent Audit helps the Company gauge its levels of Compliance on ongoing basis and to take corrective steps, wherever needed.

COMPLIANCE WITH LISTING REGULATIONS-

The equity shares of the company are listed on BSE Ltd (BSE). The Company has in place the following Policies as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:-

1. ‘Policy for Preservation of Documents’ under Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

2. ‘Archival Policy’ under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The web link of ‘Archival Policy’ is https://www.paulmerchants.net/paulmerchants/wp-content/uploads/2022/08/POLICY-ON-ARCHIVAL-OF-RECORDS.pdf

3. ‘Policy on Criteria for determining Materiality of events/information’ under Regulation

30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The web link of the ‘Policy on determining of Materiality’ is

https://www.paulmerchants.net/paulmerchants/wp-content/uploads/2023/08/Determination-of-Materiality.pdf

The company has already paid listing fees for the Financial Year 2023-24 to BSE Ltd. and has also paid the Annual Custodial fee for the Financial Year 2023-24 to the Depositories. The said Fees for the Financial Year 2022-23 were also paid duly within time.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

INSIDER TRADING:

The Board of Directors of the Company have adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information. The said Code has been posted on the Website of the Company www.paulmerchants.net. Further, the Board has also adopted the Code Of Conduct To Regulate, Monitor And Report Of Trading By Designated Persons and Their Immediate Relatives in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider trading Code of the company lays down guidelines and procedures to be followed and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The said codes were duly adhered to during the year under review.

CEO/CFO CERTIFICATION

In accordance with the Regulation 17 (8) read with Part B of Schedule II to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to corporate governance norms, Mr. Rajneesh Bansal,

Managing Director and Mr. Rajesh Garg, Chief Financial Officer (CFO), have issued a certificate as per the said Regulation for the year ended March 31,2023. As the Company has no post of Chief Executive Officer (CEO), the said Certificate has been issued and signed by the Managing Director along with CFO of the Company. The said certificate forms an integral part of this Report, annexed as Annexure D-13. The certificate has been reviewed by the Audit Committee and taken on record by the Board of Directors of the Company.

DEMATERIALIZATION OF SHARES

The Company’s equity shares are in compulsory Demat mode in terms of SEBI Guidelines. This has been facilitated through arrangement with NSDL and CDSL. 99.48% of the issued shares of the Company are already in dematerialized form as on 31-032023 and 100% issued shares of the Company are in dematerialized form as on the date of this report. M/s Alankit Assignments Limited, New Delhi is acting as the Registrar and Share Transfer Agents for this purpose and acts as common agency and all activities in relation to share transfer facility are maintained by them in terms of Regulation 7 (2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Members are requested to note that, dividends if not encashed for a period of 7 years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund (“IEPF”). Further, all the shares in respect of which dividend has remained unclaimed for 7 consecutive years or more from the date of transfer to unpaid dividend account shall also be transferred to IEPF Authority. In view of this, Members are requested to claim their dividends from the Company, within the stipulated timeline. Your Company did not have any funds lying unpaid or unclaimed for a period of seven years as on 31-03-2023. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

The Company had declared dividend for the FY 2019-20 and there is some amount of dividend lying unpaid as on 31.03.2023. Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company shall make requisite compliances for the said unpaid dividend at the appropriate time.

FINANCIAL STATEMENTS

Annual Report 2022-23 of the Company containing Standalone as well as Consolidated Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, other statements and notes thereto, prepared as per the requirements of Schedule III to the Companies Act,

2013, Directors’ Report (including Management Discussion and Analysis Report and Corporate Governance Report) is being sent via email to all shareholders who have registered their email address(es) with the Depositories/Company. Full version of Annual Report 2022-23 is also available for inspection at the Registered office of the Company during working hours up to the date of ensuing Annual General Meeting (AGM). It shall also be available at the Company's website www.paulmerchants.net, on the website of the Stock Exchange i.e. BSE Limited at www.bseindia.com and on the website of CDSL (agency for providing the Remote e-Voting facility and e-voting system during the AGM/EGM) www.evotingindia.com. The Notice of the AGM shall also be available at the website of CDSL www.evotingindia.com.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to valued Clients, Reserve Bank of India, BSE Ltd., Bankers, Government Agencies and Employees of the company for their continued support & co-operation.