India Shelter Finance Corporation Ltd Management Discussions

Management discussion and analysis Report

GLOBAL ECONOMIC OVERVIEW

In CY 2024, the global economy exhibited steady growth amid a complex environment characterised by significant opportunities and considerable challenges.These challenges were compounded by geopolitical tensions, evolving trade policies, and shifting monetary strategies across key global regions. According to the IMFs outlook, the global GDP is projected to grow by 3.3% in CY 2024, with a marginally lower growth of 2.8% and 3.0% anticipated for CY 2025 and CY 2026. Advanced economies

experienced a growth rate of 1.8% in CY 2024, driven largely by the US, which continues to play a key role in global economic expansion. Conversely, the Euro area lagged, hindered by weak industrial output and policy uncertainties that undermined investor ensure adequate spacing between the words for better readability growth rate in CY 2024, with India emerging as a key contributor to the broader global economic momentum. Meanwhile, Chinas economic growth is expected to remain subdued, influenced by structural shifts, cautious consumer sentiment, and ongoing policy adjustments.

(Source: IMF report on World Economic Outlook, April 2025)

Outlook

In CY 2024, the global economy demonstrated a strong capacity for resilience amid evolving geopolitical and policy landscapes. Record levels of electoral activity across key economies have significantly influenced global trade, investment trends, and market sentiment. Ongoing geo-political conflicts continue to have far-reaching implications for global stability, with significant disruptions in energy markets and increased risks to food security. Additionally, escalating tensions between the US and China, marked by increased tariffs, have strained international supply chains and placed upward pressure on consumer prices. However, despite these persistent challenges, the global economy remains strong, supported by a decline in inflation and a steady shift towards accommodative monetary policies. Emerging markets, with their strong domestic demand, structural reforms, and rapid digital transformation, are well-positioned to benefit, leading to cautious optimism for the future.

(Source: IMF report on World Economic Outlook, April 2025)

INDIAN ECONOMIC OVERVIEW

The Indian economy demonstrated resilience in 2024-25 with an estimated real GDP growth of 6.5%, driven by strong momentum in the services sector, increase in consumption, infrastructure-led government expenditure and increase in private investments. The ndian Governments allocation of Rs. 11.21 Lac Crs in the Union Budget 2025-26 to infrastructure reaffirms its commitment to driving economic recovery and development. This investment will accelerate industrial expansion, improve logistics efficiency, and attract private investments, positioning infrastructure as a key catalyst for growth. Private final consumption expenditure (PFCE) increased by 7.3%in 2024-25, up from 4.0% in the previous financial year.This growth was supported by a revival in rural demand. It is expected to gain momentum further, driven by a stronger labour market, increased access to credit, and lower inflation.

(Source: Ey Report on Union Budget 2025-26, Economic Survey 2024-25, Press Information Bureau, February 2025)

Outlook

Indias remarkable economic trajectory reflects its commitment to inclusive growth and innovation-driven development. By implementing forward-thinking policies, fostering a robust infrastructure, and embracing digital transformation, the nation is redefining its global standing. As the fastest-growing large economy, with steady growth projected at 6.7% over the next two fiscal years, India continues to outpace global peers and cement its position as a leader in economic resilience and progress. From the Goods and Services Tax unifying the market to initiatives like Startup India and the Production-Linked Incentive (PLI) Scheme bolstering entrepreneurship and manufacturing, the nation is building a dynamic and robust economy. With this momentum, India is set to shape the future of the global economy, exemplifying the power of ambition, resilience, and strategic governance in achieving unparalleled progress.

(Source: Economic Survey2024-25)

CREDIT PENETRATION IN INDIA

The Indian financial landscape in 2025 is characterised by a dynamic convergence of credit expansion, persistent structural challenges in rural financial inclusion, and the evolving significance of non-banking financial companies (NBFCs). Banking credit is anticipated to witness a growth rate of 12.5% in 2024- 25, predominantly driven by the surge in retail lending, albeit tempered by macroeconomic headwinds like liquidity constraints and GDP deceleration. Retail credit, encompassing sectors such as housing finance, vehicle financing, gold loans, education loans, consumer durables, personal loans, credit cards, and microfinance amounted to Rs. 75 Tn as of Fiscal 2024, having experienced a robust compound annual growth rate (CAGR) of 15% from Fiscal 2019 to 2024. This increasing demand, coupled with prevailing positive market sentiment, offers an opportune moment for both banks and NBFCs to diversify and expand their investor base.

NBFCs continue to play a key role in closing the credit accessibility divide, particularly in underserved segments. With assets under management (AUM) projected to grow by 13-15%, the sector remains strong. Moreover, the accelerating adoption of digital lending, coupled with robust regulatory support and continuous financial innovation, is set to transform the landscape, fostering deeper financial inclusion and fortifying the overall credit ecosystem in India.

! CREDIT GROWTH IN THE NBFC SECTOR

The credit growth of NBFCs, whichhas historically trended above Indias GDP growth, is expected to grow at a faster pace. NBFCs have shown remarkable resilience and gained importance in the financial sector, growing from less than Rs. 2Tn AUM at the turn of the century to Rs. 41 Tn at the end of Fiscal 2024. During Fiscals 2019 to 2024, NBFC credit is estimated to have witnessed a CAGR of 11%. Rapid revival in the economy is expected to drive consumer demand in Fiscal 2025, leading to healthy growth in NBFCs. in the face of funding constraints, NBFCs continue to play a key role in closing the credit accessibility divide, particularly in underserved segments. Moreover, the accelerating adoption of digital lending, coupled with robust regulatory support and continuous financial innovation, is set to transform the landscape, fostering deeper financial inclusion and fortifying the overall credit ecosystem in India.

(Source: Crisil Report on Loans and Financial Services Industry in India, October 2024)

The strong credit demand presents a significant growth opportunity, and as liquidity conditions stabilise, NBFCs are well-positioned to bridge financing gaps and support Indias economic momentum.

(Source: Dam Capital, February 2025, Crisil MI&A)

. INDIAS HOUSING FINANCE SECTOR

Indias housing finance market is on a steady growth path, fuelled by rising homeownership aspirations, increasing loan sizes, and favourable policy interventions. While banks continue to be dominant players, Housing Finance Companies (HFCs) are carving a niche by catering to underserved segments and offering tailored financial solutions. This balanced expansion, supported by structural demand and regulatory initiatives, is expected to drive the sectors evolution over the coming years. Currently valued at approximately Rs. 33 Tn, the sector is projected to record a CAGR of 13-15% between 2024-25 and 2029-30.

(Source: Report on Housing Finance Market by Care Edge Ratings, March 2025)

However, this growth coexists with structural challenges, including a deepening shortage of affordable housing, regional disparities in supply, and evolving consumer preferences.The sectors dynamics are further shaped by government initiatives, technological advancements in loan processing, and a post-pandemic surge in homeownership demand.

(Source: Dam Capital, February 2025, Crisil MI&A)

Mortgage Penetration and GDP Linkage

While India has witnessed rapid growth in mortgage lending, its mortgage penetration remains relatively low at just 12.3% of GDP as of March 2023, a considerable disparity compared to advanced economies like the US (68%) and the UK (62%). This under penetration represents a substantial opportunity, particularly in Tier-2 and Tier-3 cities, where access to formal credit is still limited. As India is set to contribute the most to global population growth in the coming decade, the demand for affordable housing is expected to remain strong, particularly for loan amounts under Rs. 2.5 Mn, which account for nearly two-thirds of total disbursements. Moreover, only four states in India have a mortgage-to-GDP ratio above the national average, underscoring the considerable potential for growth within the housing finance sector.

(Source: ICRA)

Housing Shortage

The demand for housing in India has been largely structural, driven by a persistent shortage of housing units and a rapidly growing population. Indias potential demand for housing in 2022 was pegged at 100 Mn units.

The Low Income Group (LIG) and Economically Weaker Section (EWS) account for 95% of the housing shortage, while the Middle- Income Group (MIG) and higher-income categories make up the remaining 5%. The total financial demand to bridge this gap is estimated to be Rs. 149 Tn, with Rs. 58 Tn anticipated to come from housing loans.

(Source: Reserve Bank of Indias Report of the Committee on the Development of Housing Finance Securitisation Market in Sep-20i 9)

AFFORDABLE HOUSING FINANCE

Affordable Housing Finance Companies (AHFCs) Landscape

Indias affordable housing segment is witnessing sustained growth, propelled by the dual forces of urbanisation and rising incomes, alongside an increased desire for homeownership. Nearly 40% of residential real estate sales in 2023 took place in Tier-2 and Tier- 3 cities. This trend has been driven by improved connectivity through initiatives like smart city developments and large-scale infrastructural projects like Bharatmala and Sagarmala. Additionally, government-backed schemes such as the Pradhan Mantri Awas Yojana (PMAY) have proven indispensable in facilitating affordable housing, with home loan subsidies significantly easing access to homeownership for middle-income households.

(Source: Dam Capital Initiating Coverage, February 2025, Crisil MI&A)

The affordable housing finance market is undergoing a major shift, driven by rising homeownership aspirations and strong regulatory support. Affordable Housing Finance Companies (AHFCs) have shown steady growth in 2024-25, reaching Rs. 10.9 Tn by 2023-24, which makes up about approximately 33% of the overall housing finance market. With rising incomes and government incentives, the affordability and accessibility of housing are steadily improving. With a greater emphasis on underserved segments and innovations in business models, the sector is moving towards greater inclusivity. In order to balance rapid growth with sustainability, policymakers see the market playing a key role in addressing the housing challenges facing India.

Key Growth Factors Customer and Market Strategy

Successful companies build their strength by focussing on specific regions where they truly understand the local market before they expand. By offering tailored loan products to underserved groups, such as the Economically Weaker Sections (EWS) and Low-Income Groups (LIG), they not only help bring more people into the financial system but also ensure that the demand for affordable housing stays strong.

Operational Efficiency and Cost Management

The Phygital model, combined with digital tools, allows for effective outreach to rural and semi-urban areas while keeping

operations flexible and cost-efficient. System-driven credit assessments, digital onboarding, and automated collections help streamline processes, reduce defaults, and ensure a smooth borrowing experience.

Risk Management and Financial Performance

By adopting advanced techniques like cash flow analysis and using alternative data, we can better assess borrower risk, which ultimately strengthens the overall quality of our loan portfolio. A well-balanced approach to risk, particularly focussing on lower-riskTier-2 and Tier-3 markets, ensures steady long-term profits and helps keep non-performing assets (NPAs) under control.

Regulatory Alignment and Strategic Initiatives

Utilising government initiatives and interest subsidies enhances the affordability of housing, thereby broadening access to loans. Strategic co-lending collaborations between banks and NBFCs, supported by strict adherence to regulatory guidelines, allow for optimal capital allocation and minimise financial risks.

Government Support and Initiatives

SWAMIH {Special Window for Affordable and Mid-Income Housing) Fund 2

As part of the Union Budget 2025-26, the government introduced SWAMIH Fund 2, an initiative to enhance accessibility to cost- effective housing. This blended finance model will draw on contributions from the government, banks, and private investors, with an outlay of Rs. 15,000 Crs. The funds objective is to facilitate the timely completion of 100,000 housing units, thereby providing a substantial boost to the affordable and mid-income housing markets.

Pradhan Mantri Awas Yojana (PMAY)

The PMAY is a flagship initiative of the Indian government, dedicated to addressing the countrys housing shortages through the promotion of low-cost housing projects. In 2025-26, the Indian Government has allocated Rs. 19,794 Crs towards the original iteration of PMAY, reaffirming its commitment to making housing more affordable and accessible.

PMAY-Urban (PMAY-U) 2.0

PMAY-LJ plays an essential role in providing permanent, all-weather homes to urban families in need. As of now, Rs. 1.18 Crs houses have been sanctioned, with over 85.5 Lac homes already built and delivered. To take this further, the Government has launched PMAY-Urban 2.0, setting aside Rs. 3,500 Crs for 2025-26, a sharp rise from the revised Rs. 1,500 Crs in 2024-25.

Loans Against Property (LAP)

LAP has emerged as a significant contributor to the growth of AHFCs, providing much-needed liquidity to small businesses and individuals. Exhibiting a strong CAGR of -32% over the past three years, LAP has gained traction due to improved underwriting standards, rising demand from micro, small, and medium enterprises (MSMEs), and greater access to financial data. While growth is expected to normalise to 22-23% in the coming years, the segment remains resilient, supported by structural demand drivers and evolving financial ecosystems.

COMPANY OVERVIEW

India Shelter Finance Corporation Limited (referred to as India Shelter, Our Company or We) is a technology-driven housing finance company specialising in affordable housing solutions and I APs. We focus on serving self-employed individuals and first-time homebuyers, especially in low- and middle-income segments across Tier-land Tier-3 cities. Established in 2010, we have built a strong presence across 15 states with 266 branches, leveraging a mix of both physical and digital models to enhance customer outreach.

With a scalable technological infrastructure, our Company employs an end-to-end in-house approach to manage all critical aspects of the lending process, ensuring comprehensive control over the entire customer lifecycle, minimising turnaround times and transaction costs. Our focus remains on effective risk management and using advanced tools to assess credit to maintain a stable and healthy loan portfolio. Backed by trusted investors and a strong capital base, we continue to grow our presence in the market while staying committed to sound financial management and responsible governance.

SWOT Analysis

S - Strengths

Extensive footprint across 15 states to serve a large customer base effectively.

Adoption of digital lending platforms improving loan processing efficiency.

Well-established risk management and underwriting processes, ensuring stable asset quality.

Positive Asset-Liability Management (ALM) and strong investor support reinforce financial stability. Diversified funding sources and strong credit ratings to raise capital efficiently and sustain long-term growth.

W - Weaknesses

• Ability to raise funds at competitive rates is susceptible to market fluctuations.

O-Opportunities

• Urbanisation and rising middle-class aspirations continue to drive housing demand.

• Government policies like PMAY and reduced GST rates on affordable housing create significant growth potential.

• Rising adoption of formal financial channels among self-employed individuals opens new customer segments.

• Growing demand for LAPs from small businesses and self-employed individuals.

• Increasing focus on financial inclusion, bringing more underserved borrowers into the formal credit system.

T -Threats

• Global events such as economic slowdowns, geopolitical conflicts, or pandemics could impact business growth.

• Long-term interest rate fluctuations may affect affordability and credit demand.

• Policy adjustments in the housing finance sector could impact lending operations.

Outlook and Future Strategy

Indias housing finance sector continues to grow, fuelled by rising homeownership aspirations and the increasing need for accessible credit. We remain focussed on expanding our reach through branch-led growth, direct customer engagement, and digital-first solutions. By leveraging system-driven automation, risk-intelligent lending, and operational excellence, we are strengthening our market leadership while ensuring financial stability. Our commitment to innovation, governance, and customer empowerment enables us to unlock new opportunities, drive responsible growth, and create a lasting impact.

INDIA SHELTERS PERFORMANCE DURING 2024-25

Operational Performance Assets Under Management (AUM)

As of 31 March, 2025, our AUM increased to Rs. 8,189.2 Crs, compared to Rs. 6,084.0 Crs in the previous financial year, reflecting a growth of 35%.

Disbursements

As of 31 March, 2025, our total disbursements rose to Rs. 3,355.1 Crs, compared to Rs. 2,646.0 Crs in the previous financial year, marking a growth of 27%.

Financial Performance

We delivered strong financial performance in 2024-25. Total income saw a 37% year-on-year (Y-o-Y) growth, rising to Rs. 1,175.9 Crs in 2024-25 from Rs. 861.4 Crs in 2023-24. Finance costs increased by 23% Y-o-Y, reaching Rs. 353.4 Crs in 2024-25 from Rs. 287.0 Crs in 2023-24. Additionally, net total income witnessed a 43% Y-o-Y increase, climbing to Rs. 822.5 Crs in 2024-25 from Rs. 574.4 Crs in 2023-24.

Operating expenses grew to Rs. 306.9 Crs in 2024-25 from Rs. 236.0 Crs in 2023-24, driven by our strategic focus on expanding the Branch Network, workforce, investing in technology, and enhancing brand visibility amid strong business momentum. Pre-provisioning operating profit increased 52% Y-o-Y, reaching Rs. 515.6 Crs in 2024-25 from Rs. 338.4 Crs in 2023-24. Asset quality improvements helped contain credit costs at Rs. 26.4 Crs in 2024-25 compared to Rs. 19.2 Crs in 2023-24.

Profit before Tax stood at Rs. 489.2 Crs. After accounting for income tax of Rs. 111.3 Crs, the Profit after Tax (PAT) increased 53% Y-o-Y, reaching Rs. 377.9 Crs in 2024-25, up from Rs. 247.6 Crs in the previous year.

Balance Sheet

		(Rs. in Crs)
Particulars	2024-25	2023-24
Sources of Funds
Share Capital	53.9	53.5
Reserves and Surplus	2,654.8	2,245.1
Borrowings	4,969.1	3,415.1
Other Liabilities and Provisions	69.7	80.4
Total	7,747.5	5,794.2
Application of Funds
Loan Assets	6,859.5	5,062.4
Investments	315.3	157.8
Fixed Assets	29.4	29.8
Cash and Bank Balance	343.4	377.7
Other Assets	200.0	166.5
Total	7,747.5	5,794.2

P&L Summary ( Rs. in Crs)

Particulars	2024-25	2023-24
Total Income	1,175.9	861.4
Finance Cost	353.4	287.0
Operating Expense	306.9	236.0
Pre-Provisioning Operating Profit	515.6	338.4
Credit Cost	26.4	19.2
Profit before Tax	489.2	319.2
Tax Expense	111.3	71.6
Profit after Tax	377.9	247.6
Basic EPS	35.2	26.3
Diluted EPS	33.9	25.2

Kev Ratios

Particulars	2024-25	2023-24
Total Revenue to Average Total Assets	17.4%	17.1%
Finance Cost to Average Total Assets	5.2%	5.7%
Spread to Average Total Assets	12.1%	11.4%
Operating Expenses to Average Total Assets	4.5%	4.7%
Credit Cost to Average Total Assets	0.4%	0.4%
PBT to Average Total Assets	7.2%	6.3%
ROA (PAT to Average Total Assets)	5.6%	4.9%
Leverage (AverageTotal Assets to Average Net Worth)	2.7	2.9
ROE (PAT to Average Net Worth)	15.1%	14.0%
Cost-to-lncome	37.3%	41.1%
Operating Expenses/AUM	4.3%	4.5%
CRAR	60.6%	70.9%
Book Value per Share	251.1	214.7

: RESOURCE MOBILISATION

Net Worth

As of 31 March, 2025, the net worth of India Shelter stood at Rs. 2,709 Crs.

ESOP Allotment

During the year, we issued and allotted 8,44,151 equity shares under our Employee Stock Option Plan (ESOP), following the exercise of stock options by eligible employees.

Term Loans from Banks and Financial Institutions

In 2024-25, we raised Rs. 2,047 Crs in funding from banks and financial institutions, with a weighted average tenure of more than five years. As of 31 March, 2025, the undrawn sanctioned amount stood at Rs. 570 Crs.Term loans from banks and financial institutions constituted 54% of total borrowings.

Refinance from National Housing Bank (NHB)

Under the NHB refinance scheme, India Shelter received a fresh sanction of Rs. 450 Crs in 2024-25. During the financial year, Rs. 459 Crs was availed, including disbursements of Rs.210 Crs from the previous years sanction. As of 31 March, 2025, the outstanding NHB refinance stood at 15% of total borrowings, with an undrawn sanctioned amount of Rs. 201 Crs as of 31 March, 2025.

Non-Convertible Debentures (NCDs)

In 2024-25, we have issued Rs. 50 Crs Non-Convertible Debentures (NCD) to bank. As of 31 March, 2025, the outstanding proportion of Non-Convertible Debentures (NCDs) was 1% of total borrowings.

External Commercial Borrowings (ECB)

India Shelter has an External Commercial Borrowing (ECB) line of USD 30 Mn from the U.S. International Development Finance Corporation (DFC). The total outstanding foreign currency loan exposure in ECBs to 4% of total borrowings. This exposure is fully hedged through cross-currency swaps.

Co-Lending

Through strategic partnerships with two well-established banks, we have utilised their distribution networks and diversified our funding channels. In the reporting period, Rs. 286 Crs was disbursed under these co-lending initiatives, with partner banks retaining 80% of the disbursed amount in their own portfolios. Portfolio under Co-Lending constitutes around 4% of the total AUM.

Direct Assignment (DA) from Banks and Financial Institutions

During 2024-25, we received a purchase consideration of Rs. 570 Crs through the Direct Assignment (DA) of Loan Against Property (LAP) assets to banks and financial institutions. These transactions were executed in compliance with RBI guidelines on the Transfer of Loan Exposure of Standard Assets, ensuring the assigned assets were de-recognised from our books. DA as a % of AUM, stood at 15.0%.

HUMAN RESOURCES

Our people are fundamental to our success, and we are committed to fostering a work environment that promotes growth, collaboration, and a pursuit of excellence. By prioritising professional development, employee well-being, and inclusivity, we empower our employees to excel and progress in their careers. Our emphasis on continuous learning, recognising outstanding performance, and fostering workplace engagement ensures that our team remains motivated and high-performing. As of 31 March, 2025, we have a strong workforce of 3,818 employees and remain dedicated to building a dynamic, future-ready organisation that drives meaningful impact.

For more detailed information, please refer to Page 50.

INFORMATION TECHNOLOGY

The financial ecosystem is rapidly evolving with the emergence of tech-driven and branchless lending models. Our technology framework is designed to enhance operational efficiency and elevate the customer experience. By integrating Ai, automation, and digital infrastructure, we have transformed traditional processes into seamless, technology-driven workflows. From machine learning-powered credit assessment to robotic process automation (RPA) for operational efficiency, IT enables us to make faster, data-driven decisions while enhancing security and compliance. Our proprietary platforms, such as iTrust for digital loan origination, iServe for customer service, and iCollect for collections, ensure a frictionless experience for customers and employees alike. Additionally, cloud-native architecture, cybersecurity frameworks, and predictive analytics help us stay ahead of emerging risks, ensuring a secure, scalable, and future- ready business model. As we continue to innovate, our IT strategy remains focussed on building a smarter, more connected, and resilient financial ecosystem.

For more information, refer to Page 42.

RISK MANAGEMENT

A strong and dynamic risk management framework is essential for ensuring financial soundness, maintaining regulatory compliance, and fostering sustainable growth. Our integrated three-tiered defense structure consisting of operational management, risk oversight, and audit governance facilitates an all-encompassing, real-time risk monitoring system. As the regulatory framework evolves, our firm commitment to strong governance, state-of-the-art digital risk controls, and continuous optimisation of operational processes ensures lasting resilience, superior operational efficiency, and long-term trust among our stakeholders.

Risk Type	Description	Risk Mitigation Measures
Credit Risk	The risk of asset value loss due to borrowers inability to repay loans.	Comprehensive credit risk framework, borrower evaluation (credit history, demographics, income), rigorous credit sanction process, and continuous post-disbursement monitoring.
Operational Risk	Risk arising from failed internal processes, people, systems, or external events.	Robust internal control systems, clear demarcation of duties, access, authorisation, reconciliation procedures, regular monitoring, staff education, internal audits, risk containment units, and digitisation to reduce manual errors.
Market Risk	Risk due to market fluctuations affecting liabilities and asset values.	Regular assessment of maturity profile, and stress testing to ensure sufficient mitigation.
Interest Rate Risk	Risk of financial loss due to changes in interest rates.	Interest rate sensitivity gap evaluation, portfolio tests, mix of fixed and floating rate instruments, diversified funding sources, and close monitoring of interest rate trends.
Forex Risk	Risk of loss due to foreign currency exposure and international interest rate fluctuations.	External Commercial Borrowing (ECB) line of USD 30 Mn is fully hedged via cross-currency swaps.
Liquidity Risk	Risk of shortfall in cash assets to meet urgent cash needs.	Sufficient cash reserves, Asset-Liability Policy to ensure adeguate cash flow and unused credit facilities.
Reputation Risk	Risk of indirect losses due to negative public perception.	Corporate governance and compliance framework integrated into business operations.
Technology Risk	Risk of system breakdowns leading to losses.	Governance framework, including IT risk management practices.
Regulatory Risk	Risk of economic or reputation loss due to non-compliance with legal reguirements.	Strict adherence to rules and regulations to prevent violations.
Information Security Risk	Risk of unauthorised access, data breaches, or compromise of confidentiality, integrity, or availability of information assets.	Implementation of an enterprise-wide Information Security Management System (ISMS) aligned with ISO 27001, regular vulnerability assessments, role-based access controls (RBAC), multi-factor authentication (MFA), robust data classification and encryption protocols, and a secure software development lifecycle (SDLC).
Cybersecurity Risk	Risk of financial and reputational losses due to cyberattacks, malware, ransomware, or exploitation of system vulnerabilities.	Deployment of a dedicated Security Operations Center (SOC), real-time threat intelligence and monitoring, cyber incident response plan, periodic Vulnerability assessment, penetration testing, multi-factor authentication (MFA), endpoint detection and response (EDR) tools, and Board-level oversight of cyber risks.

INTERNAL CONTROL SYSTEMS ANDTHEIR ADEQUACY

We have established a comprehensive internal control framework that aligns with the size, scale, and complexity of our business operations. The Internal Audit Department carries out audits across various functional sectors to ensure strict adherence to internal policies, regulatory guidelines, and operational procedures. Audit findings, along with follow-up actions, are presented to the Audit Committee on a quarterly basis, which is tasked with assessing the adequacy and efficiency of our internal control system. The Committee also oversees the implementation of audit recommendations to enhance governance structures and operational excellence. The Board of Directors is committed to maintaining an effective internal control system, which ensures a reasonable level of assurance regarding the integrity of financial reporting, the efficiency of operational processes, and the mitigation of regulatory risks.

Throughout the review period, no material breaches in controls, procedures, or systems were detected, and no significant developments occurred that could impact the internal financial controls adversely.

CORPORATE SOCIAL RESPONSIBILITY

Our goal is to leave a meaningful, transformative mark on society, enhancing the quality of life through purposeful and impactful community involvement. The CSR programmes we champion are built with a focus on long-term sustainability, ensuring a lasting contribution to societal well-being. Our primary CSR goals include driving the development of affordable housing, promoting financial inclusion, supporting the growth of local communities, and addressing critical societal issues such as hunger, poverty, healthcare, and rural advancement.

For more information, refer to Page 53.

CAUTIONARY STATEMENT

This document contains forward-looking statements and information. Such statements are based on our current expectations and certain assumptions. Therefore, they are subject to specific risks and uncertainties. Should one or more of these risks or uncertainties materialise, or if underlying assumptions prove incorrect, actual results may differ. Our Company does not intend to assume any obligation to update or revise these forward-looking statements in response to developments that differ from those anticipated.