Fedbank Financial Services Ltd Directors Report

To the Members,

The Board of Directors are pleased to present the 30^th Annual Report on the business and operations of the Fedbank Financial Services Limited ("Fedfina") together with the Audited Financial Statements for the Financial Year ended 31^st March, 2025 ("year under review").

FINANCIAL HIGHLIGHTS

The key highlights of the Audited Financial Statements are presented in the table below

( in Lakhs)

Financial Highlights	31st March, 2025 31st March, 2024
Total Revenue	2,07,982	1,62,300
Net Interest Income (NII)	1,07,080	81,212
Fees and Other Income	15,524	13,132
Operating Expenses & Loan Loss Provisions	92,229	61,536
Profit Before exceptional items and tax	30,375	32,808
Profit Before Tax	30,375	32,808
Net Profit	22,518	24,470
Appropriations:
Transfer to Reserve Fund	4,504	4,894
Balance Carried Over to Balance Sheet	18,014	19,576
Total Advances	11,64,637	9,82,245
Total Borrowings	10,26,866	8,21,460
Total Assets (Balance Sheet Size)	13,24,970	11,13,784
Net Worth	2,54,736	2,26,083
Ratios:
Return on Average Assets (%)	1.85	2.42
Return on Equity (%)	9.37	13.54
Earnings per share (?) - Basic	6.06	7.22
- Diluted	6.04	7.12
Book Value per share (?)	68.35	61.20
Cost to Income ratio (%)	57.58	58.24
Capital Adequacy Ratio (%)	21.92	23.46

Highlights of Performance

The Total revenue of the Company for the financial year ended 31^st March, 2025 has increased to 2,07,982 Lakhs as against 1,62,300 Lakhs for the previous year ended 31^st March, 2024. Similarly, Net Interest Income (NII) grew by 32% from 81,212 Lakhs in FY 2023-24 to 1,07,080 Lakhs in FY 2024-25. The revenue increased by 28% on the back of growth of 19% in loan book during the year. The net profit of the Company decreased by 8% to 22,518 Lakhs for the financial year ended 31^st March, 2025, as against 24,470 Lakhs for the financial year ended 31^st March, 2024. The Net worth of Company at the beginning of the financial year, i.e. 1^st April, 2024, was 2,26,083 Lakhs and closing Net worth as on 31^st March, 2025, was 2,54,736 Lakhs.

Growth in Business

As of 31^st March, 2025, the AUM increased by 30% compared to FY 2023-24, reaching 15,81,154 Lakhs while disbursements improved by 38% to 18,78,732 Lakhs.

Over the past year, 1,13,089 Lakhs of the gold loan AUM was through co-lending, and the Company conducted portfolio sell- down transactions totaling 2,12,960 Lakhs. At the end of the year, 25.1% of the AUM was off the books.

Directors Report (Contd.)

CREDIT RATING:

The Company has obtained credit ratings from India Ratings & Research Private Limited, CARE Ratings Limited, CRISIL Limited and ICRA Limited.

During the financial year 2024-25, there has been upgrade in rating of the Company. The details of all the credit ratings obtained are given below:

Rating Agency	Instrument	Credit Rating
India Ratings & Research Private Limited	Bank Loans	AA+/Stable
India Ratings & Research Private Limited	Non-Convertible Debentures	AA+/Stable
India Ratings & Research Private Limited	Subordinated Debt	AA+/Stable
CARE Ratings Limited	Non-Convertible Debentures	AA+;Stable
CARE Ratings Limited	Subordinated Debt	AA+;Stable
CARE Ratings Limited	Long Term/Short Term Bank Facilities	AA+;Stable/CARE A1 +
CRISIL Limited	Commercial Paper Program	A1 +
CRISIL Limited	Non-Convertible Debentures	AA+; Stable (upgraded from AA+ on 4/10/2024 )
ICRA Limited	Commercial Paper Program	A1 +

EXPANSION OF NETWORK

The Company has broadened its geographical presence by establishing new branches in different locations, thereby enhancing accessibility for its customers. With the opening of 75 branches, the branch network stands at 694 branches as on 31^st March, 2025 across 18 states for different products and the break-up is as follows:

State/Union Territories	MSME Hubs	Gold Loan	Grand Total
Andhra Pradesh	16	42	58
Chandigarh	2	-	2
Delhi NCR	2	39	41
Goa	-	5	5
Gujarat	26	73	99
Haryana	7	18	25
Karnataka	18	77	95
Madhya Pradesh	13	9	22
Maharashtra	43	85	128
Pondicherry	2	1	3
Punjab	1	9	10
Rajasthan	15	15	30
Tamilnadu	33	61	94
Telangana	14	36	50
Uttar Pradesh	13	13	26
Uttarakhand	3	-	3
Chattisgarh	2	-	2
U/T- Dadra & Nagar Haveli	-	1	1
Grand Total	210	484	694

All the Non-Convertible Debentures issued by the Company are listed on BSE. The details of all the outstanding Non-convertible Debentures as on 31^st March, 2025 are mentioned below:

NCD Series/Security name	Date of Allotment	Date of redemption	Amount Outstanding (in )
8.50% Fedbank Financial Services Limited secured NCD 2028	14th August, 2024	14th August, 2028	1,05,00,00,000
8.35% Fedbank Financial Services Limited Secured NCDs 2027	26th June, 2023	25th June, 2027	56,25,00,000
9% Fedbank Financial Services Limited Subordinated NCDs 2030	26th May, 2023	26th May, 2030	2,00,00,00,000
8.30% Fedbank Financial Services Limited Secured MLDs 2026	4th January, 2023	4th April, 2026	2,00,00,00,000
9.90% Fedbank Financial Services Limited Unsecured Subordinated NCD 2027	30th September, 2020	30th September, 2027	2,50,00,00,000

BUSINESS OVERVIEW

The Company is well positioned to achieve steady growth, enhance credit quality and deliver higher returns. Companys strong parentage and credit rating enables it to raise equity and debt on competitive terms. The Company offers a range of products that have significant potential for growth in underpenetrated market segments. The Company has a dedicated workforce of 4,568 employees spread across 18 states and union territories.

There is no change in the nature of business of the Company for the year under review. Further information on the business overview and outlook and state of the affairs of the Company is discussed in detail in the Management Discussion & Analysis Report.

DIVIDEND

In view of the planned business growth, the Board deems it proper to preserve the resources of the Company for its activities and therefore, do not propose any dividend for the financial year ended 31^st March, 2025.

DIVIDEND DISTRIBUTION POLICY

Since the Company is one of the top 1000 listed Companies as per market capitalization as on 31^st March, 2025 and in accordance with the Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is available on the website of the Company at https:// www.fedfina.com/corporate-governance/

AMOUNT PROPOSED TO BE TRANSFERRED TO STATUTORY RESERVES:

The Board of Directors have proposed a transfer of 4,504 Lakhs to the Statutory Reserves maintained under Section 45IC of the RBI Act, 1934.

ASSET-LIABILITY MANAGEMENT:

The Company follows a well-defined Asset Liability Management (ALM) system, driven by Asset Liability Committee (ALCO), to monitor efficiently and pursue appropriate policy initiatives.

Liquidity positions are examined regularly across the specified time buckets to assess and manage mismatches. The ALM policy and practices of the Company are in line with the regulatory guidelines, designed to protect against liquidity as well as interest rate risk challenges and to optimize cost of funds at all times to fund growth requirements.

The Company maintains a robust Asset Liability Management (ALM) framework, overseen by the Asset Liability Committee (ALCO), to ensure prudent monitoring and strategic decision

making. This system enables the Company to effectively manage liquidity and interest rate risks while aligning with business growth objectives.

Liquidity positions are reviewed regularly across defined time buckets to identify and address any potential mismatches. The Companys ALM policies and practices are fully compliant with regulatory guidelines and are structured to mitigate liquidity and interest rate risks. In doing so, the Company aims to optimize the cost of funds and support sustained growth.

CHANGES IN CAPITAL STRUCTURE

Authorized Share Capital of the Company:

The Authorized Share Capital of the Company is 10,00,00,00,000/- (Rupees One Thousand Crores only) consisting of 99,00,00,000 (Ninety nine Crores) equity shares of 10/- (Rupees Ten) each and 1,00,00,000 (One Crore) 0.01 % non-cumulative redeemable preference shares of face value 10 (Rupees Ten) each.

Issued, Subscribed and Paid-up Share Capital of the Company:

The Issued, Subscribed and Paid up share capital of the Company changed from 3,69,38,68,990/- comprising of 36,93,86,899 Equity shares of face value of 10 each to 3,72,71,68,540/- comprising of 37,27,16,854 Equity shares of face value of 10 each.

The issued, subscribed and paid up share capital increased due to allotment of equity shares under the Employee Stock Option Plan (ESOP) to eligible employees upon exercise of vested options. During the year under review, 33,29,955 equity shares of face value of 10/- each were allotted pursuant to exercise of stock options by the employees of the Company under The Fedbank Financial Services Limited - Employees Stock Option Plan 2018, as amended and The Fedbank Financial Services Limited- Employees Stock Options Scheme, 2024, as amended.

ISSUE OF DEBENTURES

During the period under review, the Board of Directors at their meeting held on 19^th July, 2024, approved the issue of 12,000 (Twelve Thousand) Rated, Listed, Senior, Secured, Redeemable, Non-Convertible Debentures having a face value of 1,00,000/- (Rupees One Lakh only) each, of the aggregate nominal value of up to 1,20,00,00,000/- (Rupees One Hundred and Twenty Crores only), in a single series, with the green shoe option of 8,000 (Eight Thousand) Rated, Listed, Senior, Secured, Redeemable, Non-Convertible Debentures of face value of 1,00,000/- (Rupees One Lakh only) each, aggregating up to 80,00,00,000/- (Rupees Eighty Crores only) on private placement basis (ISIN INE007N07058).

MANAGEMENT DISCUSSION AND ANALYSIS ("MDA”)

In compliance with the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis which includes details on the state of affairs of the Company forms part of this Annual Report.

CORPORATE GOVERNANCE

Corporate Governance has been an integral part of the way the Company has been doing business since inception. The Company believes that good Corporate Governance emerges from the application of the best and sound management practices and compliance with the laws coupled with adherence to the highest standards of transparency and business ethics.

The Company seeks to embed and sustain a culture that will enable us to achieve our objectives through effective corporate governance and enhance transparent engagement with key stakeholders.

A separate report on Corporate Governance setting out the governance structure, principal activities of the Board and its Committees and the policies and practices that enable the Board to fulfil its stewardship responsibilities together with a Certificate from the Secretarial Auditor of the Company confirming the compliances with the Corporate Governance requirements as stipulated under Listing Regulations forms part of this Annual report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING (BRSR):

In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

as applicable, the Business Responsibility and Sustainability Report (BRSR) of the Company for the financial year ended 31^st March, 2025, forming part of this Annual Report as a separate report.

The BRSR provides a comprehensive overview of the Companys Environmental, Social, and Governance (ESG) initiatives, disclosures, and performance. It reflects the Companys commitment to responsible and sustainable business practices, aligned with the expectations of its stakeholders and regulatory requirements.

EMPLOYEES STOCK OPTION SCHEMES:

The Company had formulated the Employees Stock Option Scheme, 2018 ("ESOS, 2018"), duly approved by the shareholders of the Company to enable its employees to participate in the future growth and financial success of the Company. The Company also intends to use this ESOS, 2018 to attract and retain talent in the organization. The Employee Stock Option Scheme was formulated in accordance with the SEBI guidelines, as amended from time to time. The eligibility and number of options to be granted to an employee is determined on the basis of various parameters such as scale, designation, performance, grades, period of service, Companys performance and such other parameters as may be decided by the Nomination & Remuneration Committee of the Board from time to time in its sole discretion.

Further, a new scheme titled Fedbank Financial Services Limited- Employees Stock Option Scheme, 2024 ("ESOS 2024") in accordance with the SEBI regulations for the benefit of employees was approved by the Shareholders at the AGM held on September 19, 2024.

During the year under review, 33,29,955 equity shares of face value of 10/- each were allotted on employees pursuant to exercise of stock options by the employees of the Company under ESOS 2018 and ESOS 2024.

Other statutory disclosures as required under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 on ESOS are given in website of the Company at https://fedfina.com/investors-relations/overviews/annual- report/?page=other-disclosures-reports

NOMINATION AND REMUNERATION POLICY

The Company has formulated Nomination and Remuneration Policy under the provisions of section 178 of the Act and SEBI Listing Regulations and the same is uploaded on the website of the Company at https://www.fedfina.com/ corporate-governance/.

The Company has also formulated Compensation Policy in accordance with the RBI circular dated 29^th April, 2022.

ALTERATION OF MEMORANDUM AND ARTICLES OF ASSOCIATION

During the year under review, there were no changes in the Memorandum of Association of the Company.

The shareholders approved alteration to the Articles of Association of the Company through Postal Ballot via remote e-voting conducted on 26^th November, 2024. The amendment pertained to Article 80, which was modified to increase the maximum number of Directors on the Board to twelve.

The existing Memorandum and Articles of Association of the Company are in compliance with the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The composition of the Board is in accordance with section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI LODR with an optimum combination of Executive, Nonexecutive and Independent Directors including two women director.

As on 31^st March, 2025, the Board of Directors of the Company comprised of five (5) Independent Directors, one (1) Non- executive Director, three (3) Nominee Directors and one (1) executive Director. The Independent Directors, Nominee Directors are not liable to retire by rotation.

The Company has a Non-executive Chairman who is not related to the MD & CEO.

Changes in the Directorship

During the year under review, the following changes took

place in the composition of the Board of Directors of the

Company:

• Mr. Ashutosh Khajuria ceased to be a Nominee Director with effect from 30^th April, 2024, pursuant to a letter received from The Federal Bank Limited dated 28^th March, 2024.

• Further, Mr. Harsh Dugar was appointed as Nominee Director with effect from 5^th May, 2024 who was nominated by The Federal Bank Limited.

• Based on the recommendation of Nomination and Remuneration Committee("NRC") and Board, the shareholders of the Company have approved the appointment of Mr. Sunil Satyapal Gulati (DIN: 00016990) and Mr. Ramesh Sundararajan (DIN: 10500779) as Independent Directors by means of a special resolution passed through Postal Ballot on 6^th June, 2024. Additionally, the continuation of Mr. Maninder Singh Juneja (DIN: 02680016) as Nominee Director nominated by True North Fund VI LLP and the appointment of Mr. Harsh Dugar (DIN: 00832748) as Nominee Director nominated by The Federal Bank Limited were also approved.

• On the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed Mrs. Sonal Dave (DIN: 00017710), Mrs. Mona Bhide (DIN: 05203026) and Mr. Muralidharan Rajamani (Din: 01690363) as an Additional Director in capacity of Independent Director effective from 24^th September, 2024, 29^th November, 2024 and 24^th January, 2025 respectively. Subsequently, the shareholders of the Company approved the appointment of Mrs. Sonal Dave (DIN: 00017710), Mrs. Mona Bhide (DIN: 05203026) and Mr. Muralidharan Rajamani as Independent Director by passing special resolutions vide Postal Ballots through remote e-voting on 26^th November, 2024, 27^th January, 2025 and 16^th April, 2025 respectively. In the opinion of the Board, each of the Independent Directors are person of integrity and possesses expertise and competent experience and proficiency to serve the Company as an Independent director. Hence they were considered for appointment/ reappointment.

• Mr. Balakrishnan ceased to hold office as an Independent Director with effect from 27^th September, 2024, upon completion of his term. He also ceased to be the Chairman of the Board effective 24^th September, 2024. Mr. Shyam Srinivasan was appointed as a Chairman of the Board effective 25^th September, 2024 for a term of 3 years.

• Mr. Anil Kothuri resigned from the position of Managing Director and CEO of the Company with effect from 8^th November, 2024 for pursuing other opportunities. The Director has confirmed that there are no material reasons apart from the reasons given in his resignation letter.

• Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors have appointed Mr. Parvez Mulla (DIN: 08026994) as Managing Director & CEO for a term of three years with effect from 11^th November, 2024 till 10^th November, 2027. The shareholders have approved the same on 27^th January, 2025 vide Postal Ballot through remote e-voting.

• Further, Mr. Krishnan Venkat Subramanian was appointed as Nominee Director with effect from 30^th November, 2024 who was nominated by The Federal Bank Limited.

• Mrs. Gauri Rushabh Shah ceased to serve as an Independent Director effective 12^th February, 2025, upon completion of her term.

• Mr. Shyam Srinivasan (DIN: 02274773), is liable to retire by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. Being eligible, Mr. Shyam Srinivasan have offered himself for re-appointment as Director. Brief particulars of Mr. Shyam Srinivasan have been provided in the notice of the 30^th AGM of the Company.

Apart from the aforesaid, there were no other changes in the composition of the Board of Directors and Key Managerial Personnel(KMP) of the Company during the year under review.

Changes in Key Managerial Personnel (KMP)

• Mr. Rajaraman Sundaresan ceased to be the Company Secretary & Compliance Officer and KMP effective 31^st July, 2025 due to completion of his term.

• Upon recommendation of Nomination and Remuneration Committee, the Board at its meeting held on 28^th July, 2025 appointed Mr. Parthasarathy Iyengar as Company Secretary & Compliance Officer and KMP with effect from 1^st August, 2025.

BOARD MEETINGS HELD DURING THE YEAR

During the year under review, your Board of Directors met 14 times and the gap between any two meetings did not exceed one hundred and twenty days.

The dates on which the meetings were held are 25^th April, 2024, 29^th April, 2024, 8^th May, 2024, 18^th June, 2024, 16^th July, 2024, 19^th July 2024, 9^th August, 2024, 24^th September, 2024, 27^th September, 2024, 22^nd October, 2024, 23^rd October, 2024, 29^th November, 2024, 24^th January, 2025 and 27^th March, 2025.

Details of the meetings and attendance thereat forms part of the Report on Corporate Governance.

DECLARATION FROM INDEPENDENT DIRECTORS

There are five (5) Independent Directors on the Board of the Company as on 31^st March, 2025. The Independent Directors have submitted declarations that they continue to fulfil the criteria of independence laid down under Section 149 of the Companies Act, 2013, regulation 16 of SEBI LODR and complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

The Independent Directors have confirmed that 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 judgment and without any external influence.

In the opinion of the Board, the Independent Directors are eminent persons and possess requisite qualifications, integrity, expertise and experience in the relevant functional areas.

All the Independent Directors have a valid registration in the Independent Directors databank of the Indian Institute of Corporate Affairs as required under Rule 6(1) of the Companies (Appointment and Qualification of Director) Fifth Amendment Rules, 2019.

BOARD EVALUATION

The Company has defined a manner of evaluation as per the provisions of the Act and SEBI LODR and formulated a method for the evaluation of the performance of the Board, its Committees and individual Directors. The annual evaluation of the performance of the individual Directors (including the Chairman of the Board) were conducted on parameters such as level of engagement and contribution and independence of judgment - thereby safeguarding the interests of the Company.

The performance evaluation of the Independent Directors were carried out by the entire Board, excluding the director being evaluated. The performance evaluation of the Chairman, the Non-Independent Directors and Board as a

whole were carried out by the Independent Directors. The Board also carried out annual performance evaluation of the working of each of its Board constituted Committees.

All the Directors have confirmed that they satisfy the fit and proper criteria in terms of the provisions 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. None of the Directors of the Company are disqualified and/or debarred as per the applicable provisions of the Act and the Securities and Exchange Board of India.

The Directors have expressed their satisfaction with the evaluation process. The Board opined that the Board Committees composition, structure, processes and working procedures are well laid down and that the Board Committees members have adequate expertise drawn from diverse functions, industries and business and bring specific competencies relevant to the Companys business and operations.

All Board members and senior management personnel have affirmed compliance with the Companys code of conduct for the FY 2024-25.

COMMITTEES

Details on composition of various Committees of the Board, terms of reference and number of meetings of the Committees held are given in the Corporate Governance Report which forms part of the Annual Report.

COMPLIANCE WITH THE SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

THE CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended 31^st March, 2025.

During the year under review, the Company has received the Corporate Agent (Composite) license dated 10^th June, 2024 issued by Insurance Regulatory and Development Authority of India ("IRDAI") for soliciting life, general and health insurance ("Composite") as Corporate Agent under Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015.

HUMAN RESOURCE - TALENT POOL - PERFORMANCE MANAGEMENT:

The Company has been always prided itself in being a people first organization. Our evolved digitized onboarding

assisted us in seamless joining for new joiners in different geographies where we have expanded our presence. Our employee strength has grown by 4.8% as compared to the previous year in line with our expansion plans. Our concentration revolves around continuous growth, culture and a learning experience. To nurture this talent, the Company have implemented practices focused on skill enhancement through regular training sessions, leadership development programmes, and a transparent performance management system. Additionally, it is given priority on healthy work-life balance for our employees, believing it enhances their productivity and motivation.

In continuation to our endeavor to promote Gender Diversity at workplace, the Company continue the Restart with Fedfina initiative to help women with career breaks to restart their career.

Women Leadership Program was launched where the women leaders participating in the program were from different industries, providing them an additional dimension towards their learning. The objective of the program is to equip our women employees in Manager and above grades to grow further as leaders. They went through a 3 months long transformational journey focused towards developing leadership mindset, strategic thinking and building an executive presence.

Further, Professional development policy is designed to empower our workforce with the skills and knowledge necessary for career advancement. Additionally, the wellbeing of our employees through regular health checkups is prioritized, ensuring their physical and mental health is diligently monitored.

Online recruitment module and in-house BGV.

This year we initiated in-house recruitment module with sole purpose to automate the recruitment process, making it more efficient and structured for the organization. It aims to enhance to minimize the TAT and enhance recruitment experience for both interviewer and interviewee by providing a centralized platform.

We have also initiated an internal BGV to ensure that an applicants background is thoroughly evaluated, that there is no criminal history, and that the individual is the best fit for the Company. This process decreases BGVs costs, lessens the Companys dependency on outside vendors, lowers risks, prevents fraud, and ensures that the business complies with legal requirements.

Onboarding Apprentice Program.

This year we have on boarded 300 plus apprentice under National Apprenticeship Promotion Scheme (NAPS) by the

Government with objective develop a skilled workforce, enhance employability, and foster a pipeline of talent for industries. They focus on providing practical, on-the-job training alongside theoretical learning, leading to nationally recognized qualifications and increased career opportunities for apprentices.

PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure I which forms part of this Report.

Further, in accordance with the provisions of Sections 197(12) & 136(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the list pertaining to the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, is kept open for inspection during working hours at the Registered Office of the Company and the Report & Accounts as set out therein are being sent to all the Members of the Company. Any Member, who is interested in obtaining these, may write to the Company Secretary at the Registered Office of the Company.

CAPITAL ADEQUACY

The Companys capital adequacy ratio stood at 21.92% as on 31^st March, 2025 which is well above the threshold limit of 15% prescribed by the Reserve Bank of India. Tier-I Capital ratio alone stood at a healthy 18.92%.

PUBLIC DEPOSITS

The Company is a Non- Deposit taking Systematically Important NBFC and has not accepted public deposits falling under purview of provisions of section 73 of the Act during the year. Hence the requirement of furnishing the details in terms of Chapter V of the Companies Act, 2013 is not applicable.

RISK MANAGEMENT POLICY

Risk management forms an integral part of our business. The Company has a Board approved Risk Management Policy that lays down the overall framework for identifying, assessing, measuring and monitoring various elements of risk involved in the businesses and for formulation of procedures and systems for mitigating such risks. The main objective of this policy is to ensure sustainable and prudent business growth.

The Risk Management Committee, a dedicated board-level committee, plays a pivotal role in continuously reviewing, approving, and refining our risk management policies and

procedures and governing framework for each type of risk on a regular periodicity. The Committee monitors the compliance of risk parameters and aggregate exposures within the defined limits.

Directors have basis recommendation of Risk Management Committee adopted ICAAP Policy and Framework with the objective of ensuring availability of adequate capital to support all risks in business as also enable effective risk management system in the Company.

The Company continues to invest in people, processes, training and technology; so as to strengthen its overall Risk Management Framework.

AUDITORS:

1. STATUTORY AUDITORS & THEIR REPORT

M/s KKC & Associates LLP, Chartered Accountants (Firm Registration No. 105146W/W- W100621) were appointed as Statutory Auditors of the Company at the Twenty ninth Annual General Meeting (AGM) held on 19^th September, 2024 for a tenure of three years till the conclusion of the Thirty second Annual General Meeting to be held for the year 2027.The Audit Report submitted by M/s KKC & Associates LLP Chartered Accountants, for the financial year 2024-25 does not contain any qualification, reservation or adverse remark.

2. SECRETARIAL AUDITORS & THEIR REPORT

M/s. DKJ & Associates Company Secretaries LLP were appointed as the Secretarial Auditors to conduct the Secretarial Audit for the financial year ended 31^st March, 2025. The Report of the secretarial auditors in the prescribed Form MR-3 is set out in Annexure II to this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark except to the extent stated below:

BSE Limited (BSE) vide their email dated 1^st July, 2024 imposed a fine of 10,000/- (excluding GST) for delayed compliance with Regulation 60 (2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for delay of one day in giving notice of Record Date for the payment of principal and interest of Debentures. Further, the Company has made waiver application in this behalf with BSE Limited and order in this behalf is awaited.

Management Response

The Company intimated the record date with a delay of one day to BSE which was due to the techinal glitch on the BSE portal. The Company has applied for waiver letter to BSE for the same and response from BSE is awaited.

The observations made in the Secretarial Auditors report are self-explanatory and therefore do not call for any further comments.

FRAUD REPORTING

Pursuant to the Board approved Fraud Risk Management and Fraud Investigation Policy of the Company, information relating to all frauds are reported to the Board on quarterly basis.

During the year under review, the frauds detected and the same has been timely reported to the Audit Committee/ Board as well as to the Reserve Bank of India (RBI) amounting to 509.47 Lakhs.

Pursuant to the section 143(2) of the Companies Act, 2013, no frauds were reported by the Auditors of the Company to the Audit Committee during the year under review.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company has instituted adequate internal control systems commensurate with the nature of its business & size of operations. The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources. The internal control system is supplemented by internal audits, regular reviews by the management and standard policies and guidelines which ensure reliability of financial and all other records. The Companys Internal Audit department performed regular reviews of business processes to assess the effectiveness & adequacy of the internal control systems, compliance with policies and procedures. The Company upholds strong governance with a risk-based internal audit framework to identify and mitigate operational risks efficiently

All significant audit observations of the internal auditors and follow up actions were duly reported to the Audit Committee.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Internal Financial Controls laid down by the Company is a systematic set of controls and procedures to ensure orderly and efficient conduct of its business including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and

timely preparation of reliable financial information. Internal financial controls not only require the system to be designed effectively but also to be tested for operating effectiveness periodically.

During the year under review, the Company had engaged a firm of Chartered Accountants to evaluate the internal financial control framework and to test its operating effectiveness. Based on the testing conducted by the aforesaid firm, the Board is of the view that the Company has laid down adequate internal financial controls commensurate with the nature and size of its business operations and these controls are adequate and operating effectively and no material weaknesses have been observed.

RELATED PARTY TRANSACTIONS

All the related party transactions that were entered into during the financial year were on arms length basis and in the ordinary course of business.

The related party transactions were placed before the Audit Committee on quarterly basis. Transactions with related parties, as per the requirements of Accounting Standards, are disclosed in the notes to accounts annexed to the financial statements.

Particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form are provided in the form AOC-2 in accordance with the rule 8 (2) of the Companies (Accounts), 2014 Rules. Form AOC-2 is set out in Annexure III to this report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE TILL THE DATE OF THIS REPORT:

No material changes and commitments affecting the financial position of the Company have occurred between the Financial year ended 31^st March, 2025 till the date of this report.

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

The Company, being a NBFC registered with RBI, is exempted from complying with the provisions of section 186 of the Act related to loans made, guarantees given and securities provided. However, the details of investments made by the Company pursuant to the provisions of Section 186 (4) of the Act are given in Note 9 to the Financial Statements.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

The Company has Prevention of sexual harassment (POSH) policy which is in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company is in compliance with the constitution of Internal Complaints Committee (ICC) to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and dealt with during the year 2024-2025:

• No. of complaints received: 1

• No. of complaints disposed of: 1

• No of cases pending for more than ninety 90 days: 0

DISCLOSURES UNDER MATERNITY BENEFITS ACT 1961

The Company affirms its compliance with the provisions of the Maternity Benefit Act, 1961, as amended. We remain committed to supporting our women employees and ensuring a workplace environment that upholds their rights and well-being. The Company has extended all applicable benefits under the Act, including paid maternity leave,

DETAILS OF GOLD LOAN AUCTIONS:

medical bonuses, nursing breaks, and, where required, creche facilities

CORPORATE SOCIAL RESPONSIBILTY

The Company has a Corporate Social Responsibilty (CSR) Committtee in place in accordance with section 135 of the Act. The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy ("CSR Policy") indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy is available on the Companys website at https://www. fedfina.com/csr/. The Company has spent 4,73,11,428/- on CSR activities during the year under review.

The required disclosure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is attached as Annexure IV to this report.

RBI GUIDELINES:

The Reserve Bank of India (RBI) granted the Certificate of Registration to the Company in August 2010 vide Registration No. N-16.00187, to commence the business of a non-banking financial institution without accepting public deposits. The Company is categorized as NBFC in Middle layer pursuant to Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and has complied with and continues to comply with all the applicable regulations and directions of the RBI.

Details of auctions pertaining to gold loans conducted during the year under review are set out below:

Year	No. of Loan Accounts	Principal Amount outstanding at the dates of auctions (?) (A)	Interest Amount outstanding at the dates of auctions (?) (B)	Total (A+B) (?)	Total amount received out of Auctions (?)
2024-25	10906	50,79,98,743.00	10,26,30,727.67	61,06,29,470.67	83,48,49,862.00

Note: No entity within the Companys group including any holding or associate Company had participated in any of the above auctions.

VIGIL MECHANISM:

As per the provisions of Section 177(9) of the Companies Act, 2013, the Company is required to establish an effective Vigil Mechanism for Directors and employees to report genuine concerns. The Company has in place a Board approved Whistle Blower Policy to deal with the instances of fraud and mismanagement, if any. The said policy is available on the website of the Company at https://fedfina.com/corporate-governance/

This Vigil mechanism of the Company is overseen by the Audit Committee and provides adequate safeguard against victimisation of employees and also provide direct access to the Chairperson of the Audit Committee.

Out of 11 complains received, 3 complaints were pertaining to vigil mechanism framework/policy. All the said complaints received were resolved.

The Company affirms that no personnel has been denied access to the Audit Committee.

ANNUAL RETURN:

Pursuant to section 92 (!) of the Companies Act 2013, the Annual Return for the year 2024-25 is placed on the website of the Company fhttps://www.fedfina.com)

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE INFLOW/OUTFLOW, ETC.

The requirements of disclosure with regard to Conservation of Energy and technology absorption in terms of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, are not applicable to the Company as it does not engage in any manufacturing facility.

The Company continues to invest in cutting edge technology, which has resulted in automation of the loan lifecycle process along with building a scalable and modular application architecture. Customer centricity is a key focus area in the Companys digital initiatives. Our customers also benefit from the doorstep model of loan disbursal. These investments along with leveraged national digital enablers like IndiaStack, Aadhaar eKYC, along policy momentum from RBI and the Government of India helps us to drive growth

We continue to focus on data protection, infrastructure upgradation and also ensure complete adherence to RBI policies. Investments have also been made in next generation security and network monitoring tools.

The Company had availed total External Commercial Borrowing (ECBs) of US$ 30 Mn for financing prospective borrower as per the ECB guidelines issued by Reserve Bank of India ("RBI") from time to time. The borrowing has a maturity of three years. In terms of the RBI guidelines, borrowings have been swapped into rupees and fully hedged for the entire maturity by way of cross currency swaps. The Company has not borrowed any Foreign Currency (USD) denominated Term Loan other than rollover of existing foreign currency borrowing facility (March 31 2024, Nil). Such borrowings are currently carried at 1 1,250 Lakhs as at 31^st March, 2025 (March 31 2024: 16,257 Lakhs).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm that:

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

II. such accounting policies have been selected and applied 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 at 31^st March, 2025 and the profits of the Company for the financial year ended on that date;

III. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV the annual accounts have been prepared on going concern basis; and

V. proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

VI. internal financial controls to be followed by the company had been laid down and that such internal financial controls were adequate and operating effectively.

OTHER DISCLOSURES

In terms of applicable provisions of the Act, the Company

discloses that during the year under review:

i. The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

ii. The Company has not issued any sweat equity shares and hence disclosure as per provisions of Section 54(1) (d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is not provided.

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

iv. There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

v. The Company has not made any application nor any proceedings are pending under the Insolvency and Bankruptcy Code, 2016.

vi. There were no instances of one-time settlement for any loans taken from the Banks or Financial Institutions.

vii. There were no amounts required to be transferred to Investor Education and Protection Fund (IEPF) pursuant to section 124 and 125 of the Companies Act, 2013 read with Rules made thereunder.

ix. The Company being, a Non-Banking Financial Company is not required to maintain cost records as prescribed under section 148(1) of the Act.

x. The Company does not have any subsidiary, joint venture or associate Company.

xi. The Company has shifted its registered office from one locality to another within the same city i.e. from Kanakia Wall Street, A Wing, 5^th Floor, Unit 511, Andheri Kurla Road, Chakala, Andheri East, Mumbai- 400093, Maharashtra to Unit no.: 1101, 11^th Floor, Cignus, Plot No. 71A, Powai, Paspoli, Mumbai - 400 087, Maharashtra effective from 25^th April, 2024.

CAUTIONARY NOTE

Certain statements in this Report may be forward-looking

and are stated as may be required by applicable laws and

regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government policies and other incidental/related factors.

ACKNOWLEDGEMENT

The Board of Directors place on record sincere gratitude to all employees for their unwavering dedication, resilience, and collaborative spirit. With such a strong foundation and shared vision, we are confident in our ability to drive continued success in the years ahead.

The Directors would also like to place on record, their gratitude for the cooperation and guidance received from all the statutory bodies, especially the RBI. The Directors also thank the shareholders, clients, vendors, investors, banks and other stakeholders in placing their faith in the Company and contributing to its growth.

For and on behalf of the Board of Directors of Fedbank Financial Services Limited

	Sd/-
	Shyam Srinivasan
Place: Mumbai	Chairman of the Board
Date: 25th August, 2025	DIN:02274773