I K F Finance Ltd Directors Report

To,

The members of IKF Finance Limited

Your Directors have pleasure in presenting the 35 th Annual Report together with the Audited Financial Statements for the FY ended March 31, 2026.

FINANCIAL RESULTS:

The summarized financial results of the Company are as given hereunder:

(Amount in lakhs, unless otherwise stated)

Particulars	Standalone		Consolidated
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Revenue from Operations	89,536.87	65,024.92	1,16,796.22	85,398.27
Other Income	1,261.19	988.43	2,130.12	1,896.52
Profit (loss) before depreciation, interest and tax	64,039.76	48,010.19	82,056.86	61,658.94
Depreciation/amortization	270.51	336.80	573.58	516.00
Finance cost	41,711.65	33,197.34	52,935.96	42,028.03
Impairment expense on loans	3,350.27	2,407.48	4,064.12	3,214.85
Portfolio Loans & other balances written off	5,086.55	1,564.95	5,323.97	1,702.39
Profit (loss) before tax	22,057.60	14,476.05	28,547.32	19,114.92
Provision for tax/deferred tax	5,574.58	3,681.32	7,094.61	4,832.97
Profit (loss) after tax before exception item	16,483.02	10,794.73	21,452.71	14,281.95
Less: Other comprehensive income/(loss)	(3.64)	(6.02)	73.10	(47.14)
Net profit (loss) after exceptional items	16,479.38	10,788.71	21,525.81	14,234.81
Balance brought forward from previous year	34,242.96	26,152.50	40,350.87	29,926.42
Dividend on Equity Shares	0.00	0.00	0.00	0.00
Transfer to Statutory Reserve as required by Section 45-IC of Reserve Bank of India Act, 1934 and NHB Reserve	3,296.60	2,158.94	4,280.58	3,003.04
Transfer to General reserve	824.15	539.74	824.15	539.74
Transferred to Share Based payment reserve	355.22	14.21	355.22	14.21
Surplus carried to Balance sheet	12,358.63	8,090.03	16,348.61	10,403.30

STATE OF COMPANYS AFFAIRS/ REVIEW OF OPERATIONS:

Standalone:

The performance for the year ended March 31, 2026 has improved and the Revenue from operations has grown by 38% to Rs. 895.37 Crores from Rs. 650.25 Crores for the corresponding previous year and Net Profit increased to Rs. 164.83 Crores as against Rs. 107.95 Crores registering a growth of 53% for the corresponding previous year. During the year, the Loan Book has grown by 28% from Rs. 4,573.57 Crores to Rs. 5,874.41 Crores (before Impairment loss allowance). The total assets managed by the Company, including receivables assigned/securitized stood at around Rs. 6,718 Cr as at March 31, 2026 as against Rs. 5,195 Cr in the previous year thereby registering a growth of 29%.

Consolidated:

The Companys performance, along with its subsidiarys performance for the year ended March 31, 2026 on a consolidated basis is satisfactory. The Revenue from operations has increased to Rs. 1,167.96 Crores from Rs. 853.98 Crores and Net Profit increased to Rs. 214.53 Crores from Rs. 142.82 Crores registering a growth of 50 % for the corresponding previous year.

CORPORATE GOVERNANCE:

Your Companys Non-convertible debt securities and commercial papers were listed with Bombay Stock Exchange Limited ("BSE"). A report on the Corporate Governance along with a declaration by the Managing Director with regard to code of conduct to be presented to the members of the Company as such a report on Corporate Governance Report is presented in a separate section and forms a part of the Annual Report.

MANAGEMENTS DISCUSSION AND ANALYSIS:

A report on the Managements Discussion and Analysis is presented in a separate section and forms a part of the Annual Report

Resource Mobilization:

The Company has established a diversified funding base, drawing from Public Sector Banks, Private Sector Banks, Foreign Banks, Financial Institutions (including foreign entities), Mutual Funds, and other sources. During the year under review, the Company continued to leverage multiple funding avenues beyond conventional borrowings such as secured debentures, term loans, working capital facilities, PTCs, and assignment transactions. Throughout the year, the Company maintained a prudent Asset-Liability Management (ALM) position. In line with its Resource Planning Policy, the Company secured long-term funds through debentures and loans from banks and various institutions. The Companys overall borrowing limit stands at Rs. 6,000 crore.

Total borrowings of the Company for the year under review (at amortized cost) stood at Rs. 4,743 Crores, of which borrowings from Banks/FI in form of TL constituted 59%, borrowings from NBFCs 15 %, Non-Convertible Debentures 18%, PTC 4 % and Tier II Capital/Sub-Debt 3% and Commercial Paper 1%. The Company is continuously exploring all options to access and create a market in NCDs, and continues to strengthen relationships with leading bankers.

Deposits:

The Company has not accepted any deposits during the year under review and it continues to be a Non-deposit taking Non-Banking Financial Company in conformity with the guidelines of the Reserve Bank of India and Companies (Acceptance of Deposits) Rules, 2014.

Working Capital Limits:

During the year under review, the Company has reduced its reliance on Cash Credit Limits by raising term resources to better manage the Asset-Liability Mismatch (ALM). However, going forward, the Company plans to increase the utilization of Cash Credit Limits proportionately with the growth in term resources, as this facility plays a crucial role in maintaining overall liquidity.

Term Loans:

During the year under review, the Company mobilized Rs. 2,114 crore through a diversified mix of term loan sources to strengthen liquidity and support business expansion. Private Sector Banks emerged as the largest contributors, accounting for 63% of the total borrowings. Public Sector Banks and Financial Institutions contributed 22%, while Non-Banking Financial Companies (NBFCs) accounted for the remaining 15% of the total term loan funding. Overall, term loans constituted 67% of the Companys total fund raising during FY 2025-26.

SECURITIZATION / ASSIGNMENT OF LOAN RECEIVABLES:

During the year under review, the Company assigned/ securitized its loan portfolio having a principal value of Rs. 766 crore through Direct Assignment (DA) transactions and issuance of Pass-Through Certificates (PTCs), comprising around 25% of the total fund raised during the year. Out of the total, Rs. 558 crore was mobilized through 8 Direct Assignment transactions, while Rs. 208 crore was securitized through the issuance of Pass-Through Certificates in 1 transaction.

NON-CONVERTIBLE DEBENTURES:

During the year under review, The Company raised Rs. 275 crore through Senior, Secured, Rated, Listed Non-Convertible Debentures (NCDs), constituting around 9% of the total borrowings during FY 2025-26. The details are provided below:

S. No	ISIN	Date of Allotment	Secured/ unsecured	Listed/ Unlisted	No. Of debentures	Maturity Date	Issue Price	Amount (in Crores)
1	INE859C07246	September 12, 2025	Secured	Listed	15000	August 12, 2027	100000	150
2	INE859C07253	March 10, 2026	Secured	Listed	125000	March 10, 2028	10000	125

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption. The assets of the Company which are available by way of security are sufficient to discharge the claims of the debt security holders as and when they become due.

COMMERCIAL PAPERS:

During the year under review, the Company raised Rs. 125 Crores (Rupees One Hundred and Twenty Five Crores) through issuance of Commercial Papers (CPs), the details of which are as under:

S. No	ISIN	Date of Allotment	Secured / unsecured	Listed/ Unlisted	No. Of debentures	Maturity Date	Issue Price	Amount (in Crores)
1	INE859C14168	February 25, 2026	Un Secured	Listed	1500	March 27, 2026	500000	75
2	INE859C14176	March 30, 2026	Un Secured	Listed	1000	June 27, 2026	500000	50

CREDIT RATING OF SECURITIES AS ON MARCH 31,2026:

Name of the Credit Rating Agency	Borrowing Instrument	Amount Rated (in Crores)	Date of Rating	Rating Assigned	Rating Valid Till	Whether New/ Renewal/Reassigned/ Withdrawn
CARE Ratings Limited	Long Term Bank Facilities	3600	December 26, 2025	CARE A+ (Stable)	December 25, 2026	renewal
	Subordinate Debt	165	December 26, 2025	CARE A+ (Stable)	December 25, 2026	renewal
	Non-Convertible Debentures	988	December 26, 2025	CARE A+ (Stable)	December 25, 2026	renewal
India Ratings and Research Private Limited	Long Term Bank Facilities	100	January 7, 2026	IND AA- (Stable)	January 6, 2027	New
	Non-Convertible Debentures	500	February 9, 2026	IND AA- (Stable)	February 8, 2027	New
	Commercial Paper	275	February 9, 2026	IND A1 +	February 8, 2027	New

All of the above ratings indicate a high degree of safety with regard to timely payment of interest and principal. The Company has placed on its website all credit ratings obtained for all its outstanding instruments and has intimated the revision in the ratings to the stock exchange.

capital was sub-divided from 10,00,00,000 (Ten Crore only) Equity Shares of Rs. 10/- (Rupees Ten only) each into 20,00,00,000 (Twenty Crore only) Equity Shares of Rs. 5/- (Rupees Five) each. Further, there was no change in preference share structure and it stood at Rs. 25,00,00,000 (Rupees Twenty Five Crore) consisting 25,00,000 (Twenty Five Lakh only) Preference Shares of Rs. 100/- (Rupees One Hundred only) each. As on March 31,2026 the Total Authorized Capital stood at Rs. 125,00,00,000/- (Rupees One Hundred and Twenty-Five Crores only) divided into 20,00,00,000 (Twenty Crore only) Equity Shares of Rs. 5/- (Rupees Five only) each and 25,00,000 (Twenty Five Lakh only) Preference Shares of Rs. 100/- (Rupees One Hundred only) each.

b. Paid up Share Capital:

As on April 01, 2025, the total Paid up Share Capital of the Company is Rs 70,15,64,450 (Rupees Seventy Crores Fifteen Lakhs Sixty-Four Thousand Four Hundred Fifty) consisting of 7,01,56,445 (Seven Crore One Lakh Fifty-Six Thousand Four Hundred Forty-Five only) fully paid equity shares of Rs. 10/- (Rupees Ten only) each.

CAPITAL ADEQUACY:

The Capital to Risk Assets Ratio of your Company is 27.34% as on March 31, 2026, well above the minimum of 15% prescribed by the Reserve Bank of India, of which Tier I Capital constituted 26.34% and Tier II constituted 1.00%.

DIVIDEND:

Your Directors have not recommended payment of dividend for the FY ended March 31, 2026, as it is proposed that the profits be retained within the business.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

During the period under review, no such case was raised to credit /to pay any amount to the Investor Education and Protection Fund.

Share Capital:

a. Authorized Share Capital:

As on April 01, 2025, The Authorized Share Capital of the Company of Rs. 125,00,00,000/- (Rupees One Hundred and Twenty-Five Crores only). During the year under review, Vide Extraordinary General Meeting Dated March 06, 2026, the Equity share

Further, during financial year under review, in May & August 2025 the following allotments were made by your Company:

Partly Paid-up Shares of Rs. 1/- paid-up

S. No.	Date of Allotment	Name of the Allottees	No. of Equity shares allotted	Issue Price	Consideration received
1	May 13, 2025	Vupputuri Gopala Kishan Prasad	28,39,785	366.42	28,39,785
2	August 14, 2025	Vupputuri Gopala Kishan Prasad	4,09,366	366.42	4,09,366
Total			32,49,151		32,49,151

Fully Paid-up Shares

S. No.	Date of Allotment	Names of the Allottees	No. of Equity Shares allotted	Issue Price	Consideration received
1.	May 16, 2025	Norwest Capital, LLC	23,41,860	366.42	Rs. 85,81,04,341.20
2.	May 16, 2025	India Business Excellence Fund - IV	95,51,880	366.42	Rs. 3,49,99,99,869.60
3.	May 16, 2025	IBEF Gift SPV 3	39,30,000	366.42	Rs. 1,44,00,30,600.00
4.	May 16, 2025	Motilal Oswal Wealth Limited	32,80,021	366.42	Rs. 1,20,18,65,294.82
5.	August 13, 2025	Vupputuri Gopala Kishan Prasad	13,50,634	366.42	Rs. 49,48,99,310.28
Total			2,04,54,395		Rs. 7,49,48,99,415.90

And in the extraordinary general meeting held on March 06, 2026, the face value of equity shares of the Company was subdivided and the face value of each equity share became Rs 5/-

Hence as on March 31, 2026 the paid-up share capital of the Company stood at Rs. 90,93,57,551 consisting of 18,12,21,680, Fully paid-up equity shares of Rs. 5/- paid up each and 64,98,302 Partly paid-up equity shares of Rs 0.50/- paid up each.

Compulsorily Convertible Preference Shares:

There are no Compulsorily Convertible Preference Shares outstanding as on March 31, 2026.

c. Issue of Shares with differential voting rights:

The Company has not issued any Shares with differential voting rights during the period under review.

d. Buy Back of Securities:

The Company has not bought back any of its securities during the year under review.

e. Sweat Equity:

The Company has not issued any Sweat Equity Shares during the year under review.

f. Bonus Shares:

The Company has not issued any bonus shares during the year under review.

g. Employees Stock Option:

Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors, at its meeting held on February 05, 2026, approved the new Employee Stock Option Plan 2026 -"IKF Finance -Employee Stock Option Plan 2026", which was subsequently approved by shareholders at its Extraordinary General Meeting held on March 06, 2026. IKF Finance -Employee Stock Option Plan 2026provides for the creation, offer, and grant of up to 28,39,784 (post-split) (Twenty Eight Lakh Thirty Nine Thousand Seven Hundred and Eighty Four only), equity options in one or more tranches at any time to or for the benefit of employees of the Company.

Further, the Board extended the benefits of the IKF Finance - Employee Stock Option Plan 2026 to the employees of the subsidiary Company, IKF Home Finance Limited, in addition to the employees of the Company as recommended by the Nomination and Remuneration Committee. It was also subsequently approved by shareholders at its Extraordinary General Meeting held on March 06, 2026.

DISCLOSURE AS REQUIRED UNDER RULE 12(9) OF COMPANIES (SHARE CAPITAL AND DEBENTURES) RULES, 2014 DURING THE FINANCIAL YEAR ARE AS BELOW:

ESOP 2019

(a) options granted	0
(b) options vested	2,93,600
(c) options exercised	Nil
(d) the total number of shares arising as a result of exercise of option	Nil
(e) options lapsed	0
(f) the exercise price	Rs. 60
(g) variation of terms of options	NA
(h) money realized by exercise of options		Nil
(i) total number of options in force		2,93,600
(j) employee wise details of options granted to:
(i) key managerial personnel		30,360
(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year		Chakrapani Gollamudi Chief Risk Officer - 1,02,100
(iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant		NIL

ESOP 2025

(a) options granted	10,30,824
(b) options vested	Nil
(c) options exercised	Nil
(d) t he total number of shares arising as a result of exercise of option	Nil
(e) options lapsed	Nil
(f) the exercise price	Rs. 60, Rs. 112.5 and Rs. 157.5
(g) variation of terms of options	NA
(h) money realized by exercise of options	Nil
(i) t otal number of options in force	10,30,824
(j) employee wise details of options granted to:
(i) key managerial personnel	Prakash Bhawnani, Chief Financial Officer - 1,02,192 Options Prashant Rawat, Chief Financial Officer (IKF Home Finance Limited, Subsidiary Company) - 60,000 Options

Transfer to Reserves:

The Directors of the Company have transferred Rs. 824.15 Lakhs to General Reserves out of the current year profits for the FY 2025-26 as against Rs. 539.74 Lakhs during the FY 2024-25. Further, your Directors have transferred Rs 3,296.60 Lakhs to Statutory Reserve @ 20% profit after tax as required under Section 45-IC of Reserve Bank of India Act, 1934 during the FY 2025-26 as against Rs 2,158.94 Lakhs during the FY 2024-25. Further Rs 355.22 lakhs was transferred during the FY 2025-26 to Share Based payment reserve as against Rs 14.21 Lacs during the FY 2024-25.

Details of Subsidiary, Associate and Joint Venture Companies:

The Company does not have any Associate and Joint Venture Companies as on date by virtue of Section 2(6) of the Companies Act, 2013.

During the period under review, the Company acquired 70,00,000 of equity shares of its Subsidiary Company, IKF Home Finance Limited, from the promoters at a price of Rs 92/- (Rupee Ninety-Two only) per share pursuant to which IKF Home Finance Limited Subsidiary Company became a Wholly Owned Subsidiary Company.

Policy for determining material subsidiaries is available on the Companys website and can be accessed through the web-link https://www.ikffinance.com/policies

No Company has become or ceased to be the Companys Subsidiaries, joint ventures or associate companies during the year.

(ii) any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year	Debnil Chakravarty, CEO - 1,40,000 Options - 19.12% Raghuram Kotamarthi, Business Head - 66,824 Options - 9.13% Hanumakonda Srinivas, National Head Collections - 37,984 options - 5.19%
(iii) identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant	Nil

Salient features of the financials of the above-mentioned Wholly owned Subsidiary have been given in Form AOC-1 as Annexure-I to this report

AUDITORS:

Statutory Auditors:

M/s. Mukund M Chitale & Co (Firm Regn No: 106655W) Chartered Accountants, Statutory Auditors of the Company was appointed by the shareholders at the 33 rd Annual General Meeting held on September 30, 2024 for a period of 3 (Three) years to hold office from the conclusion of 33 rd Annual General Meeting till the conclusion of the 36 th Annual General Meeting of the Company to be held in the Calendar Year 2027 on such remuneration plus applicable taxes and out-of-pocket expenses, as may be mutually agreed upon by the Audit Committee/Board of Directors and the Statutory Auditors.

Qualification by the Statutory Auditor:

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

Secretarial Auditor:

Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s. B S S & Associates, Company Secretaries as Secretarial Auditors of the Company. Secretarial Audit Report is enclosed as Annexure-II to this Report.

Further, the Board of Directors at the meeting held on May 11, 2026 has approved the Appointment of M/s. B S S & Associates, Company Secretaries as Secretarial Auditors of the Company for a further period of 5 (five) years from the FY 2026-27 to FY 2030-31 subject to approval of the shareholders.

Qualification by Secretarial Auditor:

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

Maintenance of Cost Records:

Cost Records are not required to be maintained by the Company under Section 148 of the Companies Act, 2013. Accordingly, such accounts and records are not maintained.

Cost Audit:

In terms of the provisions of Section 148 of the Companies Act, 2013 read with Rule 3 & 4 of the Companies (Cost Record and Audit) Rules, 2014 and all other applicable provisions of the Companies Act, 2013, the Cost Audit is not applicable to the Company.

Internal Audit and Auditor:

The Companys Internal Audit function operates under a co-sourcing model. The in-house team, headed by the Head of Internal Audit, works in collaboration with Protiviti, the Companys co-sourced Internal Audit partner, to ensure comprehensive coverage, independent assurance, and adherence to best practices in internal controls and risk management

Internal Financial Controls:

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure: (a) the orderly and efficient conduct of business, including adherence to policies,

(b) safeguarding of assets, (c) prevention and detection of frauds /errors, (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

VIGIL MECHANISM /WHISTLE BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board has adopted Whistle Blower Policy. This policy aims to conduct the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. The policy also provided adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases.

Your Company hereby affirms that during the year no Director /employee have been denied access to the Chairman of the Audit Committee and that no complaints were received.

The Whistle Blower Policy is available on the website of the Company and can be accessed through the web-link https://www.ikffinance.com/policies

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

During the year under review, the Company has spent an amount of Rs. 2,11,00,000/- under the CSR activity. The report on CSR activities for FY 2025-26 is enclosed as Annexure-III . The Corporate Social Responsibility policy is available on the website of the Company and can be accessed through the web-link https://www.ikffinance.com/ policies

COMPLIANCE WITH RBI DIRECTIONS:

Under erstwhile Master Direction - Non-Banking Financial Company - Systemically Important Non -Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, the Company was classified as a NonDeposit Taking Systemically Important Non-Banking Financial Company (NBFC-ND- SI). As per the present Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions, and Framework for Scale Based Regulation) Directions, 2025, the Company is classified under the "Middle Layer" category under the said framework.

DETAILS OF MONEY ACCEPTED FROM DIRECTOR:

During the period under review the Company has not accepted money in the form of unsecured loan from the director or relative of the director of the Company.

ANNUAL RETURN:

As required under Section 92(3) of the Companies Act, 2013, Annual return in Form MGT-7 is available on the Companys website and can be accessed through the web-link https://www.ikffinance.com/financials

MATERIAL CHANGES AND COMMITMENTS, IF ANY:

There are no Material Changes and Commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS, IF ANY:

There are no significant and material orders passed by the regulators/courts/tribunals impacting going concern status and the Companys operations in future.

DIRECTORS & KEY MANAGERIAL PERSONNEL: Directors:

Dr. Satyanand Sinha Chunduri (DIN: 03644504) retired by rotation and was re-elected at the last Annual General Meeting of the Company held on September 30, 2025, in terms of Section 152 of the Companies Act, 2013.

During the year, there were changes in the composition of Board of Directors as given below:

?€? On May 16, 2025, Shri Vinit Mukesh Mehta resigned as Nominee Director of India Business Excellence Fund - II, pursuant to sale of its stake, and was appointed as Nominee Director of India Business Excellence Fund - IV on the same date. His appointment was regularized by members at Extraordinary General Meeting held on July 31, 2025

?€? On November 10, 2025, Shri Abhishek Agrawal resigned from the position of Nominee Director of Accion Digital Transformation Fund LP, pursuant to sale of its stake.

?€? On February 05, 2026, Shri Robin Bhanwarlal Agarwal was appointed as Nominee Director on behalf of Rajadhi Raja Limited, an SPV of Creador, a new investor who purchased Accion Digital Transformation Fund LPs stake in IKF. His appointment was regularized by members at Extraordinary General Meeting held on March 06, 2026.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act, 2013.

Key Managerial personnel:

During the financial year, there were no changes in the Key Managerial Personnel.

Declaration by Independent Directors:

The Independent Directors of the Company have submitted their declarations as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as per sub-section (6) of Section 149 of the Act.

Familiarization programme for Independent Directors:

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry.

Independent Directors Meeting:

The Independent Directors met on March 26, 2026 without the attendance of Non-I ndependent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, the performance of the Chairman of the Company, considering the views of Executive Director and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

During the year, there were no new appointments of Independent Directors of the Company. In the opinion of the Board all the Independent Directors of the Company possess integrity, experience, expertise and requisite proficiency required under all applicable laws and policies of the Company.

BOARD EVALUATION:

The Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.

CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business of the Company during the FY 2025-26.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the FY 2025-26, the Board of Directors have met eight times viz April 25, 2025, May 13, 2025, May 19, 2025, May 23, 2025, August 6, 2025, November 7, 2025, February 5, 2026, and February 27, 2026 The details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and Secretarial Standard-1.

AUDIT COMMITTEE:

The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

NOMINATION AND REMUNERATION POLICY:

The Nomination and Remuneration Policy containing guiding principles for payment of remuneration to Directors, Senior Management, Key Managerial Personnel and other employees including Non-executive Directors along with Board Evaluation criteria are provided in the Corporate Governance Report. The terms of reference are placed on the Companys website and can be accessed through the web-link https://www.ikffinance.com/policies

The Composition of the Nomination and Remuneration Committee ("NRC") is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the NRC were accepted by the Board.

Criteria of making payments to non-executive directors are also provided in the Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company, being a Non-Banking Finance Company registered with the Reserve Bank of India and engaged in the business of giving loans, is exempt from complying with the provisions of Section 186(2) to (13) of the Companies Act, 2013. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been given in this Report.

REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP):

The disclosure requirements under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, read with Section 197 of the Companies Act, 2013, relating to the ratio of remuneration of each Director to the median employee remuneration, are applicable only to listed companies. As the equity shares of the Company are not listed on any stock exchange as of the date of this Report, the said disclosure is not applicable to the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered by the Company with Related Parties were in the Ordinary course of Business and are at Arms Length basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Audit Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the FY 2025-26 which were in conflict with the interest of the Company. The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 were given as Annexure-IV to the Boards Report in form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

Related Party Disclosure - As per Point no A of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended the detailed disclosures were covered in the Financial Statements, which forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) in the preparation of the annual accounts for the period ended March 31, 2026, 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 are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit 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) t he directors had prepared the annual accounts on a going concern basis.

(e) t he 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; and

(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.

COMPANYS POLICY ON PROHIBITION, PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company prohibits any form of sexual harassment and any such incidence is immediately investigated and appropriate action taken in the matter against the offending employee(s) based on the nature and the seriousness of the offence. The Company has a policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace (the Policy) and matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" notified by the Government of India vide Gazette Notification dated

23 rd April, 2013.
(a) Number of complaints of sexual harassment received in the year	Nil
(b) Number of complaints disposed of during the year
(c) Number of cases pending for more than ninety days.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee. There was no case of sexual harassment reported during the year under review.

The policy is available on the website of the Company and can be accessed through the web-link https://www. ikffinance.com/policies

MATERNITY BENEFIT ACT 1961:

The Company has duly complied with the applicable provisions of the Maternity Benefit Act, 1961, including the provision of maternity leave and other benefits to eligible women employees, as prescribed under the Act.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143 (12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There were no frauds reported by the Statutory Auditors under sub-section (12) of Section 143 of the Companies Act, 2013, read with the rules made thereunder, which are required to be reported to the Central Government.

NAME OF THE DEBENTURE TRUSTEES WITH FULL CONTACT DETAILS - DISCLOSURE UNDER REGULATION 53(E) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015, AS AMENDED:

1 IDBI Capital Trusteeship Services Limited

Asian Building, Ground Floor, 17, R. Kamani Marg,

Ballard Estate, Mumbai - 400 001, Maharashtra, India Contact No: 022-40807000 E-mail Id: itsl@idbitrustee.com

2 Vardhman Trusteeship Private Limited,

3 rd Floor, Room No - 15 6, Lyons Range, Turner Morrison House

Kolkata - 700 001, West Bengal, India

Contact No: 022 42648335

E-mail Id: compliance@vardhmantrustee.com

3. Catalyst Trusteeship Limited

901,9 th Floor, Tower-B, Peninsula Business Park, Senapati Bapat Marg, Lower Parel (W),

Mumbai - 400013, Maharashtra, India E-mail Id: dt@ctltrustee.com Details of revision of financial statement - Nil

DETAILS OF UTILIZATION OF FUNDS RAISED THROUGH PREFERENTIAL ALLOTMENT OR QUALIFIED INSTITUTIONS PLACEMENT:

During the year under review, the Company had raised Rs. 275 Crores (Rupees Two Hundred and Seventy Five Crores) through preferential issue/private placement of Non-Convertible Debentures (NCDs) and Rs. 750 Crores (Rupees Seven Hundred and Fifty Crore) through preferential issue/private placement of Equity Shares. The funds were utilized by the Company for its general corporate purposes. There has been no deviation in the utilization of issue proceeds of Private Placement of NonConvertible Debentures (NCDs) and Equity Shares from the objects stated in the Private Placement Offer Letter.

SECRETARIAL STANDARDS:

The Company complies with all applicable Secretarial Standards.

OTHER DISCLOSURES:

Code of Conduct:

The Board has laid down Code of Conduct for Board Members, Key managerial personnels, Senior Managements and Employees of the Company (Codes). The Code stands widely communicated across the Company at all times. The Board has also laid down a Code of Conduct for Independent Directors (forms part of the terms & conditions for appointment of independent director) pursuant to Section 149(8) read with Schedule IV of the Act, which is a guide to professional conduct for Independent Directors of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with these Codes. These Codes are also accessible at the Companys website at the https:// www.ikffinance.com/code-of-conduct

Recommendations of the Committees:

There have been no occasions during the year where the Board has declined any recommendations made by its Committees.

Penalties and Strictures:

The Company confirms that there have been no instances of penalties, adverse orders, or strictures imposed by RBI, SEBI, Stock Exchanges, or any statutory authority pertaining to capital market matters in the past three years.

Breach of Covenant:

The Company has adhered to all covenants associated with borrowings and debt instruments during the year. It is further confirmed that there has been no instance of covenant breach in respect of Non-Convertible Debentures issued by the Company.

Fraud Risk Management:

The Company has in place a comprehensive Fraud Risk Management Policy which lays down the framework for prevention, detection, and reporting of frauds. A dedicated Fraud Risk Management Committee has been constituted to oversee the implementation of the policy and to review fraud risk-related matters. The Committee meets at regular intervals to evaluate the effectiveness of fraud risk controls, monitor incidents, and ensure timely remedial actions. The Company remains committed to strengthening its internal control systems and fostering a culture of transparency and ethical conduct to mitigate fraud risks.

The Fraud Risk Management Policy is available on the website of the Company and can be accessed through the web-link https://www.ikffinance.com/policies

Disclosures by NBFC Systemically Important Non-Deposit Taking Company and Deposit taking Company : Nil

PECUNIARY RELATIONSHIP/TRANSACTION WITH NON-EXECUTIVE DIRECTORS:

During the year under review, there were no pecuniary relationship/transactions of any non-executive directors with the Company, apart from sitting fees for attending meetings as directors.

CUSTOMER COMPLAINTS:

Particulars	As at March 31, 2026	As at March 31, 2025
(a) No. of complaints pending at the beginning of the year	0	0
(b) No. of complaints received during the year	58	61
(c) No. of complaints redressed during the year	58	61
(d) No. of complaints pending at the end of the year	-	-

PERPETUAL DEBT INSTRUMENTS (PDI):

During the financial year, the Company has not issued any Perpetual Debt Instruments (PDI).

REGISTRAR AND SHARE TRANSFER AGENCY:

The Company has appointed M/s. Bigshare Services Private Limited situated at Plot No-306, 3 rd Floor, Right Wing, Amrutha Ville Opp. Yashoda Hospital, Rajbhavan Road Somajiguda, Hyderabad-500 082, as its Registrar and Share transfer Agency for handling both physical and electronic transfers.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREOF:

The key financial ratios were disclosed in the Financial Statements, which forms part of this Report.

HUMAN RESOURCES:

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

CAUTIONARY STATEMENT:

Statements in these reports describing Companys projections statements, expectations and hopes are forward looking. Though, these expectations are based on reasonable assumption, the actual results might differ.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company, being a non-banking finance Company (NBFC), does not have any manufacturing activity. The directors, therefore, have nothing to report on conservation of energy and technology absorption.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Total foreign exchange earned	Nil
Total foreign exchange used	Rs. 12,21,917

CODE OF CONDUCT:

The Company has adopted Code of Conduct for the Board and for the senior level employees of the Company and they are complying with the said code.

INDUSTRIAL RELATIONS:

Industrial relations continued to be cordial throughout the year under review.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

During the year under review, Company has not made any application under The Insolvency and Bankruptcy Code, 2016 (31 of 2016).

THE 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

The requirement to disclose the 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 is not applicable.

ACKNOWLEDGMENTS:

Your Company will always keep interest of its customers, employees and the stakeholders as a priority and shall reciprocate their confidence reposed in the Company. It has been a mutually beneficial relationship and looks forward to their continued support.

For and on behalf of the Board IKF FINANCE LIMITED

Place: Vijayawada	Vupputuri Gopala Kishan Prasad Chairman & Executive Director	Vasumathi Devi Koganti Managing Director
Date: May 11, 2026	DIN: 01817992	DIN: 03161150