indostar capital finance ltd share price Directors report


Dear Members,

Your Directors pleased to present the 14th Annual Report on the affairs of your Company together with the audited financial statements for the financial year ended March 31, 2023.

FINANCIAL HIGHLIGHTS

The key highlights of the audited standalone financial statements of your Company for the financial year ended March 31, 2023 and comparison with the previous financial year ended March 31, 2022 are summarized below:

Particulars

For the year ended March 31, 2023 For the year ended March 31, 2022

Total income

973.25 1,053.55

Total expenditure

785.98 1,994.40

Profit/(loss) before taxation

187.27 (940.85)

Less: Provision for taxation

- Current tax

- -

- Deferred tax asset

- (171.66)

Net profit/(loss) after taxes

187.27 (769.19)

Other comprehensive income, net of tax

0.76 0.47

Total comprehensive income

188.03 (768.72)

Transfer to statutory reserve fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934

(37.45) -

Appropriation towards dividend and dividend distribution tax*

- (58.50)

Surplus in the statement of profit and loss

150.58 (827.22)

Balance brought forward from previous period

(530.28) 296.94

Balance carried to balance sheet

(379.70) (530.28)

Earnings per share (Face Value 10/- each)

Basic ()

13.76 (62.06)

Diluted ()

13.76 (62.06)

*includes dividend and dividend distribution tax aggregating to 58.50 crore towards interim dividend on compulsorily convertible preference shares ("CCPS") for the period from May 27, 2020 to May 26, 2021 paid on June 17, 2021 and final dividend for the period from May 27, 2021 to November 26, 2021 paid on November 26, 2021.

FINANCIAL PERFORMANCE AND COMPANYS STATE OF AFFAIRS

The financial highlights tabulated above are based on the requirement of the Reserve Bank of India ("RBI") Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, the circulars, directions, notifications issued by the RBI from time to time ("RBI Directions") and provisions of the Companies Act, 2013 (the "Act") read with Rules made thereunder. For details of Reserves and Surplus of the Company, please refer Note No. 21 of the audited standalone financial statements of the Company for the financial year ended March 31, 2023.

Details on performance of your Company has also been covered in the Management Discussion and Analysis Report which forms part of the Annual Report.

Conduct Review of commercial vehicles and SME businesses

As set out in the May 6, 2022 disclosure, the Audit Committee had initiated a separate review for undertaking a root cause analysis of deviations to policies and gaps in the internal financial controls and systems (including control gaps / control override and individuals involved) focusing on the Companys commercial vehicles and SME businesses and had appointed an external law firm along with an external agency in this regard ("Conduct Review"). The

final findings of this review were submitted to the Audit Committee.

The Company, under the guidance and supervision of the Audit Committee, has completed its review of the findings thereon, and has taken necessary remedial and accountability measures. Among others, the Company has initiated measures to strengthen controls and improve the process and control environment of the Company including by way of senior managerial level changes and appointments, improving entity level controls, policy related changes, process improvements and technological enhancements. The Company has also concluded that with respect to the findings in the Conduct Review Report, there is no further reporting requirement under the Act.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

In terms of the Dividend Distribution Policy of the Company, dividend shall be declared / recommended on the equity shares of the Company, keeping in view the Companys objective of meeting the long-term capital requirement for the business from internal cash accruals and appropriately rewarding shareholders. Details of the Dividend Distribution Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report and is also available on the website of the Company at https://www.indostarcapital.com/inves tors-corner#investor-services.

In terms of the Dividend Distribution Policy of the Company and the Guidelines issued by the Reserve Bank of India vide its circular no. RBI/2021-2022/59 DOR.ACC.REC.No.23/21.02.067/2021-22 dated June 24, 2021 on Declaration of dividends by NBFCs which is effective from financial year ended March 31, 2022 and onwards, your Company is not eligible to declare dividend for financial year 2022-23.

FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

In terms of Section 129 of the Act read with Rules framed thereunder, audited consolidated financial statements of the Company and its subsidiaries shall be laid before the ensuing Annual General Meeting of the Company along with the audited standalone financial statements of the Company for the financial year ended March 31, 2023.

The audited standalone and consolidated financial statements together with Auditors Report(s) thereon along with the salient features of the financial

statements of the subsidiaries of the Company in the prescribed Form AOC-1 forms part of the Annual Report and are also available on the website of the Company at https://www.indostarcapital.com/invest ors-corner#investor-relations.

SUBSIDIARY COMPANIES & THEIR FINANCIAL PERFORMANCE

Your Company has 2 (two) wholly-owned subsidiaries namely, IndoStar Home Finance Private Limited ("IHFPL") and IndoStar Asset Advisory Private Limited ("IAAPL"). Your Company does not have any joint venture(s) / associate company(ies) within the meaning of Section 2(6) of the Act.

During the year under review, there has been no change in the nature of business of the subsidiary companies and there were no additions / deletions in the number of subsidiaries of your Company.

The audited standalone financial statements of each of the subsidiaries are available on the website of the Company at https://www.indostarcapital.com/ investors-corner. Members interested in obtaining a copy of the audited standalone financial statements of the subsidiaries may write to the Company Secretary at the Registered & Corporate Office of the Company or at investor.relations@indostarcapital.com.

In terms of Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and Companys Policy for Determining Material Subsidiary, IHFPL continues to be a material subsidiary of your Company. Further, in terms of explanation to Regulation 24(1) of the Listing Regulations, the requirement of appointing an Independent Director of the Company on the board of directors of IHFPL is currently not applicable.

The Audit Committee reviews the financial statements of subsidiaries of the Company, the investments made by its subsidiaries and the statement of all significant transactions and arrangements entered into by the subsidiaries, if any, in terms of the Listing Regulations. The minutes of board meetings of the unlisted subsidiary companies and detailed presentations on business performance of material subsidiary, are placed before the Board.

IndoStar Home Finance Private Limited ("IHFPL")

IHFPL is registered with the National Housing Bank to carry on the business as a housing finance institution without accepting public deposits and primarily focuses on providing affordable home finance. IHFPL commenced business operations in mid of 2017 and has built a quality and profitable portfolio of over 1,623 crore as on March 31, 2023. IHFPL operates in 10 states across India through various branches and

has an employee base of over 757 employees as on March 31, 2023.

During the year under review, the total income of IHFPL was 209.24 crore (previous year: 144.82 crore). The operations of IHFPL during the year under review has resulted in profit after tax of 37.78 crore (previous year: 34.31 crore). The other key performance indicators of IHFPL are: (a) Return on Assets: 2.6%; (b) Capital to Risk Weighted Assets Ratio: 80.5%; (c) Debt-Equity Ratio: 1.57x; (d) Assets Under Management: 1,623 crore which is 15% YoY growth; (e) Disbursements: 487 crore; (f) Gross Stage 3 assets: 1.3%; and (g) Cash & cash equivalent including undrawn lines: 206 crore.

IndoStar Asset Advisory Private Limited ("IAAPL")

IAAPL is enabled under its objects to carry on the business of inter-alia advising, managing, providing investment advisory services, financial advisory services, management and facilitation services. IAAPL acted as an investment manager to IndoStar Credit Fund and IndoStar Recurring Return Credit Fund, both, Category II Alternative Investment Funds registered with the Securities and Exchange Board of India ("SEBI") and has applied to SEBI for surrendering the registration of IndoStar Credit Fund and IndoStar Recurring Return Credit Fund and the applications are under process.

During the year under review, the total income of IAAPL was 0.16 crore (previous year: 0.03 crore) and the Profit after tax was 0.10 crore (previous year: loss after tax was 0.04 crore).

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the Listing Regulations and the RBI Directions, the Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report.

SHARE CAPITAL

Issued, Subscribed and Paid-up Share Capital

As on March 31, 2023 and as on the date of this report, the issued, subscribed and paid-up share capital of the Company stands at 1,36,07,92,950 divided into 13,60,79,295 equity shares of 10 each.

Your Company has not issued any sweat equity shares or equity shares with differential voting rights. None of the Directors on the Board of the Company as on March 31, 2023, holds any instruments convertible into Equity Shares of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At present, the Board of Directors of your Company comprises 8 (eight) Directors of which 3 (three) are

Non-Executive Independent Directors, 4 (four) are Non-Executive Non-Independent Directors and 1 (one) is an Executive Director. The Chairman of the Board of Directors is a Non-Executive Independent Director. The Board composition is in compliance with the requirements of the Act, the Listing Regulations and the RBI Directions. Detailed composition of the Board of Directors of the Company has been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

Appointment and Cessation:

All appointments of Directors are made in accordance with the relevant provisions of the Act, the Listing Regulations, the RBI Directions and other laws, rules, guidelines as may be applicable to the Company. The Nomination & Remuneration Committee ("NRC") exercises due diligence inter-alia to ascertain the fit and proper person status of the person who is proposed to be appointed on the Board of Directors of the Company, and if deemed fit, recommends their candidature to the Board of Directors for consideration.

During the year under review, Mr. Deep Jaggi (DIN:09412860) resigned from his position as Whole-Time Director & Chief Executive Officer with effect from February 14, 2023, and in line with succession planning for the Company and considering the knowledge, relevant expertise and experience of Mr. Karthikeyan Srinivasan in the retail business and on recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its meeting held on March 30, 2023 and the Members of the Company by means of special resolution passed on April 30, 2023, vide Postal Ballot conducted through remote voting mode, approved the appointment of Mr. Karthikeyan Srinivasan (DIN: 10056556) as a Whole Time Director on the Board of Directors of the Company designated as Chief Executive Officer, to hold office for a term of 5 (five) consecutive years commencing from March 30, 2023 to March 29, 2028.

Director(s) Retiring by Rotation

In terms of Section 152(6) of the Act read with the Articles of Association of the Company, Mr. Munish Dayal (DIN: 01683836) and Mr. Vibhor Kumar Talreja (DIN: 08768297), shall retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing Annual General Meeting of the Company. Brief profiles of Mr. Munish Dayal and Mr. Vibhor Kumar Talreja have been included in the notice convening the ensuing Annual General Meeting.

Re-appointment of Independent Directors

The NRC after considering, (1) performance evaluation of Mr. Hemant Kaul (DIN: 00551588) and Ms. Naina Krishna Murthy (DIN: 01216114) as a Member of the Board/Committees, (2) their contribution in Board/ Committee deliberations during their tenure as an

Independent Director and (3) their skills, background and experience, recommended to the Board their re-appointment as Independent Director for a second term of five years in terms of Section 149(10) of the Act. The Board unanimously endorsed the view of the NRC and recommended to the Shareholders of the Company, the re-appointment of Mr. Hemant Kaul and Ms. Naina Krishna Murthy as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of five years, effective February 5, 2023 through February 4, 2028. On April 30, 2023, the Shareholders of the Company, by way of a special resolution passed through Postal Ballot conducted through remote e-voting mode, approved the re-appointment of Mr. Hemant Kaul and Ms. Naina Krishna Murthy as Independent Directors of the Company for the above-mentioned tenure.

Resignation of Independent Director(s)

During the year under review, none of the Independent Director(s) on the Board of Directors of the Company had resigned before the expiry of their respective tenure(s).

Director(s) Declaration and Disclosures

Based on the declarations and confirmations received in terms of the provisions of the Act, the Listing Regulations and the RBI Directions, none of the Directors on the Board of your Company are disqualified from being appointed / continuing as Directors.

A certificate from H Choudhary & Associates, Practicing Company Secretary, confirming that none of the Directors on the Board of the Company as on March 31, 2023 have been debarred or disqualified from being appointed or continuing as Director on the Board of the Company by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any such statutory authority, forms part of the Governance Report which is annexed to and forms an integral part of this Boards Report.

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names

in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

Key Managerial Personnel ("KMP")

During the year under review, (i) Mr. Kapish Jain was appointed as Chief Financial Officer of the Company with effect from May 27, 2022. Mr. Jain resigned with effect from close of business hours on July 19, 2022; (ii) Mr. Vinodkumar Panicker was appointed as Chief Financial Officer of the Company with effect from December 26, 2022; (iii) Mr. Deep Jaggi resigned from the office of Chief Executive Officer (CEO) of the Company with effect from February 14, 2023; and (iv) Mr. Karthikeyan Srinivasan was appointed as CEO of the Company with effect from February 14, 2023.

Subsequent to the year under review, Mr. Jitendra Bhati resigned as Company Secretary and Compliance officer of the Company with effect from close of business hours of April 17, 2023 and Ms. Shikha Jain was appointed as Company Secretary and Compliance officer of the Company with effect from April 18, 2023.

Following are the KMPs of the Company as on date of this Boards Report:

1. Mr. Karthikeyan Srinivasan Chief Executive Officer

2. Mr. Vinodkumar Panicker Chief Financial Officer

3. Ms. Shikha Jain

Company Secretary & Compliance Officer RBI DIRECTIONS

Your Company endeavors to comply with the direction(s), circular(s), notification(s) and guideline(s) issued by the Reserve Bank of India as applicable to your Company as a systemically important non-deposit taking non-banking financial company ("NBFC").

Your Company has complied with the provisions of the extant circulars, regulations and guidelines related to foreign investment in India, with respect to the downstream investments.

COMPLIANCE WITH SECRETARIAL STANDARDS

In terms of provisions of Section 118 of the Act, your Company is in compliance with Secretarial Standards on Meetings of the Board of Directors and Secretarial Standards on General Meeting issued by the Institute of Company Secretaries of India.

DEPOSITS

Your Company has not accepted any public deposits during the year under review and shall not accept any deposits from the public without obtaining prior approval of the RBI. Further, your Company being an

NBFC, the disclosure requirements under Chapter V of the Act read with Rule 8(5)(v) and 8(5)(vi) of the Companies (Accounts) Rules, 2014 are not applicable to your Company.

RESOURCES AND LIQUIDITY

Your Company has diversified funding sources including public sector banks, private sector banks, mutual funds, insurance companies and financial institutions. Funds were raised through various modes including bank borrowings, issuance of non-convertible debentures on private placement basis, issue of commercial paper and sale / assignment / securitisation of loan assets of the Company etc.

During the year under review, your Company has raised additional funds from inter-alia, following sources (i) 2,255.00 crore as bank borrowings (outstanding as on March 31, 2023: 2,588.51 crore); (ii) 900.00

crore through issuance of non-convertible debentures (outstanding as on March 31, 2023: 1,108.87 crore); and (iii) 876.98 crore by securitization of loan assets of the Company. Subsequent to year under review, the Company raised 300.00 crore through issue of commercial paper (outstanding as on March 31, 2023: Nil). Funds raised through private placement of debentures were utilized for the purpose mentioned in the respective offer documents. Till the pending utilization of funds for stated purpose, the funds were temporarily invested in mutual funds/Banks FDs/ maintained a balance in current accounts.

Your Company continues to be adequately capitalized and is in compliance with capital adequacy norms prescribed by the Reserve Bank of India. Your Company has sufficient liquidity to satisfy its short-term and long-term liabilities.

CREDIT RATING(S)

Credit Ratings assigned to the Company as on March 31, 2023 is summarized below:

Particulars / Rating Agencies

Rating Remarks

Long Term:

Debt Programme

CARE Ratings Limited

CARE A+" Securities with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.

CRISIL Ratings Limited

CRISIL AA-" Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.

Market Linked Debentures

CARE Ratings Limited

CARE PP- MLD A+" Securities with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.

Short Term Debt Programme / Commercial Paper:

CRISIL Ratings Limited

CRISIL A1+" Securities with this rating are considered to have very

CARE Ratings Limited

CARE A1+" strong degree of safety regarding timely servicing of

ICRA Limited

[ICRA] A1+" financial obligations. Such securities carry very lowest credit risk.

During the year under review, CARE Ratings Limited revised the long-term rating to "CARE A+"; re-affirmed short-term rating at "CARE A1+" and it placed the rating under Rating Watch with Negative Implications. By the end of the year, Care Rating Limited removed the Rating Watch with Negative Implications and revised it to "Stable" outlook.

During the year under review, while CRISIL did not revise the long-term or short term rating and retained them at CRISIL AA- and CRISIL A1+ respectively; it placed the rating under Rating Watch with Negative Implications.

DEBT EQUITY RATIO

Your Companys Debt Equity ratio as on March 31, 2023 stood at 1.6x.

CAPITAL ADEQUACY RATIO

Your Company is well capitalised to provide adequate capital for its continued growth. As on March 31, 2023, the Capital to Risk Assets Ratio ("CRAR") of your Company stood at 31.5%, well above the regulatory limit of 15% as prescribed by the RBI for NBFCs.

NET OWNED FUNDS

The Net Owned Funds of your Company as on March 31, 2023 stood at 1,865.64 crore.

COMPLIANCE WITH MINIMUM PUBLIC SHAREHOLDING

Subsequent to the year under review, Indostar Capital and Everstone Capital Partners II LLC, members of the promoter and promoter group of the Company, have sold the 1,93,40,000 equity shares of the Company

representing 14.21% of the total paid-up equity share capital through offer for sale by way of stock exchange mechanism and the public shareholding in the Company has now increased upto 25% and accordingly the Company is in compliance with the minimum public shareholding norms with effect from May 5, 2023, as required under Regulation 38 of the Listing Regulations.

SHIFTING OF REGISTERED OFFICE OF THE COMPANY

During the year under review, the Company shifted its registered office from "One World Centre, 20th Floor, Tower 2A, Jupiter Mills Compound, Senapati Bapat Marg, Mumbai - 400013" to "Unit No. 505, 5th Floor, Wing 2/E, Corporate Avenue, Andheri - Ghatkopar Link Road, Chakala, Andheri (East), Mumbai - 400099 with effect from December 30, 2022.

AUDITORS

Statutory Auditors & their Report

In terms of provisions of the Act, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, having ICAI Firm Registration No. 117366W/W-100018, were appointed as the Statutory Auditors of the Company at the 11th Annual General Meeting of the Company held on September 24, 2020 for a term of five years to hold office till the conclusion of the 16th Annual General Meeting of the Company.

In terms of the guidelines issued by RBI on April 27, 2021 for appointment of statutory auditors for NBFCs, which was applicable from second half of financial year 2021-22 inter-alia mandates tenure of statutory auditors to be for a continuous period of a maximum of three years subject to satisfying the eligibility criteria each year, the term of Statutory Auditors stands revised from 5 years to 3 years i.e., to hold office till conclusion of 14th Annual General Meeting of the Company. Accordingly, Deloitte Haskins & Sells LLP shall cease to hold office of Statutory Auditors of the Company from the conclusion of the 14th Annual General Meeting of the Company.

In terms of Section 139 of the Act read with rules made thereunder and guidelines issued by RBI on April 27, 2021, the Audit Committee of the Board, after assessing the qualifications and experience of M S K A & Associates, Chartered Accountants, having ICAI Firm Registration No. 105047W recommended their appointment as Statutory Auditors of the Company for a term of three years to the Board of Directors of the Company. Upon recommendation of the Audit Committee, the Board of Directors has approved appointment of M S K A & Associates, as Statutory Auditors of the Company to hold office for a period of three years i.e. from the conclusion of the 14th Annual General Meeting of the Company till

the conclusion of the 17th Annual General Meeting of the Company.

Your Directors recommend to the members of the Company the appointment of M S K A & Associates, Chartered Accountants, as Statutory Auditors of the Company to hold office for a term of three years

i.e. from the conclusion of the 14th Annual General Meeting of the Company till the conclusion of the 17th Annual General Meeting of the Company.

M S K A & Associates, being eligible for appointment as Statutory Auditors have consented and confirmed that their appointment, if made, shall be in compliance with the requirements of Section 139 read with Section 141 of the Act read with rules made thereunder and guidelines issued by RBI on April 27, 2021.

M/s. Deloitte Haskins & Sells LLP, Statutory Auditors of the Company have, in their report(s) on the audited standalone and consolidated financial statements of your Company for the financial year ended March 31, 2023 submitted following qualifications:

Qualified Opinion

We have audited the accompanying standalone financial statements of IndoStar Capital Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects on the corresponding figures of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

The Company had recorded a charge on account of impairment (net of recoveries) of 115,077 lakh for the year ended March 31, 2022 (including 48,075 lakh against loans for Commercial Vehicles ("CV"), 782 lakh against loans to Small and Medium Enterprises

("SME"), 14,533 lakh against investment in Security Receipts, 1,351 lakh against additional liability on financial guarantee contracts consequent to impairment of the underlying loan assets and a loss of 57,764 lakh on write off of loan assets during the previous year).

The Company had concluded that it was impracticable to determine the prior period-specific effects, if any, of the charge to the Statement of Profit and Loss on account of impairment allowance, loan assets written off and changes in fair value of financial-guarantee contracts recorded during the year ended March 31, 2022 in respect of certain account balances as explained by the Company in Note 41.2 of the Statement. As a result, we were unable to determine whether any adjustments were required for prior period(s) relating to the impairment recorded for the year ended March 31, 2022 and consequently, adjustments to income from interest, fees and commission on the corresponding assets and related disclosures.

Our opinion on the standalone financial statements for the year ended March 31, 2022 was modified accordingly. Our opinion on the financial statements for the year ended March 31, 2023 ("current period") is also modified because of the possible effect of this matter on the comparability of the current periods figures and the corresponding figures.

Comments in Report on Other Legal and Regulatory Requirements section of the Audit Report

1(a) We have sought and except for the matter described in the Basis for Qualified Opinion section above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

1(d) Except for the possible effects of this matter on the comparability of the current years figures and the corresponding figures of the previous year, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

Comments in Annexure B to the Auditors Report

(xvii) The Company has not incurred cash losses in the financial year covered by our audit. Considering the standalone financial statements of the Company as at and for the year ended March 31, 2022 (immediately preceding financial year), and the matter of audit qualification as reported by us in Basis for Qualified Opinion section of our Audit Report (dated August 5, 2022) on those financial statements, the effect of which

we are unable to determine, we are unable to state if the Company has incurred cash losses during the immediately preceding financial year.

Directors response to comments of the Statutory Auditors in the Audit Report

With respect to the qualification of the Statutory Auditors, the qualification pertains to comparability of the current year figures with that of previous year as explained in note 41.2 of the Standalone financial statements. There is no impact of the audit qualification on the figures for the current year i.e. year ended March 31, 2023.

As explained in note 41.2 of the financial statements, for the previous year ended March 31, 2022, the Company had made incremental provision for expected credit loss (ECL) allowances on account of certain deficiencies in the Companys internal controls that were identified during period ended March 31, 2022. Considering that these control deficiencies have since been remediated during the current year and the findings of the Conduct Review have been adequately evaluated (refer note 41.1 of the Standalone financial statements), no incremental provisioning is considered necessary during the year ended March 31, 2023.

Although the possibility that the control deficiencies that were identified during previous year could potentially have had an impact on the financial statements for periods ending prior to April 1, 2021, the Company had concluded that it was impracticable to determine the prior period - specific effects, if any, in respect of the charge to the Statement of Profit and Loss for the previous year ended March 31, 2022 when it finalised its financial statements for the year ended March 31, 2022 because significant judgements had been applied in determining the staging of the loan assets and the related impairment allowance for events and conditions which existed as on March 31, 2022. The Company believes it is not practicable to apply the same judgement without hindsight for the prior period(s).

Consequent to the above, in respect of such account balances, related income and the related disclosures, the figures for the year ended March 31, 2023 may not be strictly comparable with the figures for the year ended March 31, 2022.

Secretarial Auditors & their Report

In terms of Section 204 of the Act and Regulation 24A (1) of the Listing Regulations, Secretarial Audit Report from M Siroya and Company, Practicing Company Secretary in the prescribed format for the financial year ended March 31, 2023 is enclosed herewith at Annexure I to this Boards Report.

M Siroya and Company, Practicing Company Secretary, in their report on the secretarial audit of your Company for the financial year ended March 31, 2023 have submitted following remarks/qualifications:

1. Non-maintenance of minimum public shareholding ("MPS") of at least 25% as required pursuant to Rule 19(2) and 19A of the Securities Contract (Regulations) Rules, 1957 read with Regulation 38 of the Listing Regulations;

2. Delay in submission of audited financial results (standalone and consolidated) of the Company for the 4th quarter and financial year ended March 31, 2022 and other Company updates

3. Delay in disclosure of line items prescribed under Regulation 52(4) along with the half yearly / annual financial results

4. Delay in disclosure of extent and nature of security created and maintained with respect to secured listed NCDs in the financial statements;

5. Delay in submission of statement indicating the utilization of issue proceeds/ material deviation in the use of proceeds of non-convertible debentures

6. There were several instances of delayed filings of requisite eForms with the Registrar of Companies, viz, DIR-12, MGT-14, AOC-4 CFS, AOC 5, PAS 3 and CHG-1 etc.

7. There were instances of delayed filing of periodical returns required to be filed with the Mumbai Regional Office of the Reserve Bank of India during the year under review.

Directors Response to the remarks/qualification in Secretarial Audit Report

Subsequent to the year under review, the Company has complied with the provisions of the the minimum public shareholding norms with effect from May 5, 2023, as required under Regulation 38 of the Listing Regulations.

With respect to the delay in submission of audited financial results (standalone and consolidated) of the Company for the 4th quarter and financial year ended March 31, 2022 and other Company updates, due to then ongoing conduct review by external agency appointed by the Company and in order to disclose its impact in financial results for the quarter and year ended March 31, 2022, there was delay in compliance with submission of financial results (standalone and consolidated) of the Company for the 4th quarter and financial year ended March 31, 2022 in terms of Regulation 33 and submission of other disclosures required to be submitted along with financial results. Post the completion of review by the external agency and confirmation by the statutory auditors on the

same, the Company on August 5, 2022 adopted and submitted financial results (standalone and consolidated) of the Company for the 4th quarter and financial year ended March 31, 2022 in terms of Regulation 33 and submission of other disclosures required to be submitted along with financial results.

With respect to the delays in other disclosures with stock exchanges, the same was inadvertently delayed, however, the Company has since been working to put in place adequate systems and automation tools to strengthen its governance and to ensure no such instances were repeated in future. The Company would be more cautious and ensure timely submission of return.

With respect to the delay in filing of forms with Ministry of Corporate Affairs, the Company would like to submit that the delay was due to technical glitch on website of MCA and despite the Companys continuous and rigorous efforts, the forms could not be uploaded on time. As soon as the glitch was resolved, the Company filed all the forms immediately.

The delay in filing of returns with Reserve Bank of India was due to system errors while submitting the returns, The Company has since been working on resolving those errors by improving its systems and also liasoning with officials of Reserve Bank of India to ensure timely submissions of all returns.

In terms of Regulation 24 A(2) of the Listing Regulations, Annual Secretarial Compliance Report with respect to all applicable compliances under regulations and circulars / guidelines issued by the Securities and Exchange Board of India from M Siroya and Company, Practicing Company Secretary in prescribed format for the financial year ended March 31, 2023 has been submitted to the stock exchanges.

Secretarial Audit Report of Material Unlisted Indian Subsidiary

In terms of Section 204 of the Act and Regulation 24A of the Listing Regulations, Secretarial Audit Report for IndoStar Home Finance Private Limited, a material subsidiary of the Company obtained from H Choudhary & Associates, Practicing Company Secretary in the prescribed format for the financial year ended March 31, 2023 is enclosed herewith at Annexure II to this Boards Report.

H Choudhary & Associates, Practicing Company Secretary, in their report on the secretarial audit of IndoStar Home Finance Private Limited for the financial year ended March 31, 2023 have not submitted any qualifications, reservations, adverse remarks or disclaimers except with respect to appointment of woman director on the Board of the Company.

During the year under review, the secretarial auditor of the Company and IHFPL have not reported any instances of fraud in the Company and IHFPL committed by officers or employees of the Company to the Audit Committee.

REPORT ON CORPORATE GOVERNANCE

The Corporate Governance Report for the year under review, including disclosures as stipulated under Regulation 34 read with Schedule V of the Listing Regulations and the RBI Directions is annexed to and forms an integral part of this Boards Report.

A certificate from H Choudhary & Associates, Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance as prescribed under the Listing Regulations is annexed to the Corporate Governance Report.

MEETINGS

The Board and Committees meet at regular intervals inter-alia to discuss, review and consider various matters including business performance, strategies, policies and regulatory updates and impact. During the year under review, the Board met 9 (nine) times and several meetings of Committees including the Audit Committee were held. Details with respect to the meetings of the Board of Directors and Committees held during the year under review, including attendance by Directors / Members at such meetings have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

BOARD COMMITTEES

The Board of Directors, in compliance with the requirements of various laws applicable to the Company, as part of good corporate governance practices and for operational convenience, has constituted several committees to deal with specific matters and has delegated powers for different functional areas to different committees.

The Board of Directors has amongst others, constituted Audit Committee, Credit Committee, Asset Liability Management Committee, Risk Management Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Debenture Committee, Internal Complaints Committee(s), Banking Committee, Investment Committee, Grievances Redressal Committee, ESG Working Review Committee and Disciplinary Committee.

Details with respect to the composition, terms of reference, number of meeting(s) held and attended by respective member(s), roles, powers and responsibilities of the Committee(s) have been provided in the Corporate Governance Report which

is annexed to and forms an integral part of this Boards Report.

PERFORMANCE EVALUATION

In terms of the provisions of the Act and the Listing Regulations, the Board of Directors adopted a Board Performance Evaluation Policy to set out a formal mechanism for evaluating performance of the Board, that of its Committee(s) and individual Directors including the Chairperson. Additionally, in order to outline detailed process and criteria to be considered for performance evaluation, the Nomination & Remuneration Committee has put in place the Performance Evaluation Process - Board, Committees and Directors, which forms an integral part of the Board Performance Evaluation Policy.

In terms of the requirement of Schedule IV of the Act and Regulation 25 of the Listing Regulations, a separate meeting of the Independent Directors was held on March 22, 2023 to review the performance of the Non-Independent Directors including the Chairman and the Board, as a collective entity.

Subsequent to the year under review, the Board of Directors evaluated the performance of the Directors including Independent Directors, Committee(s) of the Board and the Board as a collective entity, during the year under review.

A statement indicating the manner in which formal evaluation of the performance of the Board, Committee(s) of the Board, individual Directors including the Chairman during the year under review was carried out, is provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In compliance with the requirements of the Listing Regulations, the Company has adopted and put in place a Familiarisation Programme for Independent Directors to familiarize Independent Directors inter-alia with the industry in which your Company and its subsidiaries operate, the Companys business model and its operations in order to give them an insight into the Companys business and its functioning. A formal letter of appointment is given to Independent Directors at the time of their appointment which lays down the fiduciary duties, roles and responsibilities of an Independent Director. The terms and conditions of appointment of Independent Directors is available on the website of the Company at https://www.indostarcapital.com/investors-corner #investor-services.

In terms of Regulation 46 of the Listing Regulations, the details of familiarisation programmes imparted

to the Independent Directors during the year under review including details of number of programmes and number of hours spent by each Independent Director are available on the website of the Company at https://www.indostarcapital.com/investors-corner #investor-services.

POLICY ON APPOINTMENT OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

In terms of Section 178 (2) of the Act, the Listing Regulations and the RBI Directions, the Board of Directors adopted a Policy on Selection Criteria / "Fit & Proper" Person Criteria inter-alia setting out parameters to be considered for appointment of Directors and Senior Management Personnel of the Company.

Details of the Policy on Selection Criteria / "Fit & Proper" Person Criteria have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report and is also available on the website of the Company at https://www.indostarcapital.com/investors-corner#i nvestor-services.

REMUNERATION POLICY, DISCLOSURE OF REMUNERATION & PARTICULARS OF EMPLOYEES Remuneration Policy

In terms of Section 178 of the Act and the Listing Regulations, the Board of Directors adopted a Remuneration Policy inter-alia setting out the criteria for determining remuneration of Executive Directors, Non-Executive Directors, Senior Management and other employees of the Company.

Details of the Remuneration Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report. The Remuneration Policy is also available on the website of the Company at https://www.indostarcapital.com/ investors-corner#investor-services.

Employee Remuneration

In terms of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures with respect to the remuneration of Directors, Key Managerial Personnel and employees of the Company have been provided at Annexure III to this Boards Report.

Statement containing details of employees as required in terms of Section 197 of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the Registered & Corporate Office of the Company during working hours for a period of 21 days before the date of

the ensuing Annual General Meeting. A copy of the statement may be obtained by shareholders by writing to the Company Secretary at the Registered & Corporate Office of the Company or at investor. relations@indostarcapital.com.

The Board of Directors confirm that remuneration paid to the Directors was as per the Remuneration Policy of the Company.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In terms of Section 177(9) and Section 177(10) of the Act and the Listing Regulations, the Board of Directors adopted a Whistle Blower Policy / Vigil Mechanism, inter-alia to provide a mechanism for Directors and employees of the Company to approach the Audit Committee of the Company and to report genuine concerns related to the Company. The Whistle Blower Policy / Vigil Mechanism provides for adequate safeguards against victimization of Director(s) or employee(s) who report genuine concerns under the mechanism.

Details of the Whistle Blower Policy / Vigil Mechanism have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and in light of your Companys philosophy of being a responsible corporate citizen, the Board of Directors adopted a CSR Policy which lays down the principles and mechanism for undertaking various projects / programs as part of Companys CSR activities. During the year under review, the Company was not required to spend any amount towards CSR activities as required under Section 135 of the Act and hence, disclosure pursuant to Section 134(3)(o) of the Act is not applicable to the Company.

Details of the composition of the CSR Committee and the CSR Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

RISK MANAGEMENT FRAMEWORK

Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks associated with the business of the Company. Major risks identified by the business and functions, if any, are systematically addressed through mitigating actions on a continuing basis. The Board of Directors have adopted a Risk Management Framework and Policy which inter-alia integrates various elements of risk management into a unified enterprise-wide policy.

The Risk Management Committee of the Company has not identified any elements of risk which in their opinion may threaten the existence of your Company. Details of the risks and concerns relevant to the Company are discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report. As part of the Portfolio Review Findings, certain deficiencies were identified with respect to the Risk Management Framework and Policy during the year ended March 31, 2022. The Company under the guidance of the Audit Committee and the Board have gone into depth on all the matters and have remediated the issues by a combination of change in the policies and processes and also by automating the processes and escalating the deviations on an immediate basis. These have been checked for accuracy by the Auditors and the Assurance team and are seen to be working well.

In terms of the RBI Directions and in order to further strengthen the risk management framework, during the year under review, the Company appointed Chief Risk Officer ("CRO") and adopted a policy on Independence of the CRO. In order to ensure that the Company maintains high standards of risk management practices, the CRO functions independently with no relationship with business verticals of the Company and reports to the Risk Management Committee. The CRO is inter-alia entrusted with the responsibility of identifying, measuring and mitigating risks which may affect the Company and putting in place and monitoring the risk management policies and practices of the Company.

Subsequent to the year under review, the Board of Directors through resolution passed through circulation, on recommendation of Nomination & Remuneration Committee and Risk Management Committee, appointed Mr. Nitin Gyanchandani as Chief Risk Officer of the Company with effect from July 17, 2023 for the period of 5 years.

Details of the Risk Management Framework and Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Companys well-defined organizational structure, documented policies, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal system / policies and applicable laws. The internal control system / policies of your Company are supplemented with internal audits, regular reviews by the management and checks by external auditors. The Audit Committee

and the Board of Directors monitor the internal controls system / policies of your Company. The Risk Management Committee and the Audit Committee periodically review various risks associated with the business of the Company along with risk mitigants and ensure that they have an integrated view of risks faced by the Company. The Board of Directors is of a view that your Companys internal control systems are commensurate with the nature of its business, size and complexity of operations.

During the year under review, the Statutory Auditors have not reported any instances of fraud in the Company committed by officers or employees of the Company to the Audit Committee under Section 143(12) of the Act.

The Statutory Auditors have, in their report on Internal Financial Control over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Act, have provided an Qualified Opinion as under.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the Companys internal financial controls with reference to standalone financial statements as at March 31, 2023:

The Company had concluded that it was impracticable to determine the prior period-specific effects, if any, of the charge to the Statement of Profit and Loss on account of impairment allowance, loan assets written off and changes in fair value of financial-guarantee contracts recorded during the year ended March 31, 2022 in respect of account balances identified and explained by the Company in Note 41.2 of the standalone financial statements. As a result, we were unable to determine whether any adjustments were required for prior period(s) relating to the impairment charge recorded for the year ended March 31, 2022 and consequently, adjustments to income from interest, fees and commission on the corresponding assets and related disclosures.

Because of the deficiency in financial closing and reporting process, in respect of comparative information as aforesaid, we were unable to assess whether or not the current years figures are comparable to those of the previous year.

A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial control with reference to standalone financial statements, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion:

In our opinion, to the best of our information and according to the explanations given to us, except for the possible effects of the material weakness described in the Basis for Qualified Opinion paragraph above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, an adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2023, based on the criteria for internal financial control with reference to standalone financial statements established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone Ind AS financial statements of the Company for the year ended March 31, 2023, and the material weakness does not affect our opinion on the said standalone Ind AS financial statements of the Company.

Directors response to comments above of the Statutory Auditors in the report on Internal Financial Control over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Act:

With respect to the Qualified Opinion above, the qualification pertains to comparability of the current year figures with that of previous year as explained in note 41.2 of the Standalone financial statements. There is no impact of the audit qualification on the figures for the current year i.e. year ended March 31, 2023. As explained in note 41.2 of the Standalone financial statements for the current year the figures for the year ended March 31, 2023 may not be strictly comparable with the figures for the year ended March 31, 2022.

CEO & CFO CERTIFICATE

Compliance Certificate in terms of Regulation 17(8) of the Listing Regulations on the audited financial statements and other matters prescribed therein, submitted to the Board of Directors by the CEO and CFO of the Company, for financial year ended March 31, 2023, is enclosed herewith at Annexure IV to this Boards Report.

BUSINESS RESPONSIBILITY AND

SUSTAINABILITY REPORT

In terms of Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) of your Company detailing initiatives undertaken by the Company on environmental, social and governance front during the

year under review, forms part of this Annual Report and has been provided at Annexure V to this Boards Report and is also available on the website of the Company at https://www.indostarcapital.com/inves tors-corner#investor-relations.

CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES AND RELATED PARTY TRANSACTION POLICY

In terms of the provisions of the Act, the Listing Regulations and the RBI Directions, the Board of Directors adopted Related Party Transaction Policy to ensure obtaining of proper approvals and reporting of transactions with related parties.

In terms of Section 177 of the Act and Regulation 23 of the Listing Regulations read with the Related Party Transaction Policy of the Company, transactions with related parties were placed before the Audit Committee for its approval and omnibus approval of the Audit Committee was obtained for related party transactions of repetitive nature, within the limits prescribed by the Board of Directors. The Audit Committee is periodically updated with respect to related party transactions executed under omnibus approval. Further, as per the applicable provisions of the SEBI Listing Regulations, necessary approvals of the members of the Company were also sought for the material related party transactions proposed to be entered with the related parties.

Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the details of related party transaction entered under Section 188(1) of the Act, in Form AOC-2 is enclosed herewith at Annexure VI to this Boards Report.

Disclosure of the related party transactions as required under IndAS - 24 are reported in Note 32 of the audited standalone financial statements of the Company for the financial year ended March 31, 2023.

Details of the Related Party Transaction Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Boards Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

In terms of Section 186(11) of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014, the provisions of Section 186 in respect of loans made, guarantees given or securities provided or any investment made by the Company are not applicable to the Company.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made

by the Company are given in the Notes to the financial statements.

ANNUAL RETURN

In terms of Section 134(3)(a) and Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return as at financial year ended March 31, 2023 in prescribed form No. MGT-7 is available on the website of the Company at https://www.indostarcapital.com/investors-corner #investor-services.

EMPLOYEE STOCK OPTION PLANS ("ESOP PLANS")

Your Company believes that its success and ability to achieve its objectives is largely determined by the quality of its workforce and recognises that not only good employment opportunities but also additional motivating mechanisms are needed to incentivize employees and aligning their interest with the interest of the Company. In recognition of the said objective, the Company adopted and implemented IndoStar ESOP Plan 2012 ("ESOP 2012"), IndoStar ESOP Plan 2016 ("ESOP 2016"), IndoStar ESOP Plan 2016-II ("ESOP 2016-II"), IndoStar ESOP Plan 2017 ("ESOP 2017") and IndoStar ESOP Plan 2018 ("ESOP 2018") (collectively referred to as "ESOP Plans") to attract, retain, motivate and incentivise employees of the Company and its holding / subsidiary companies.

The ESOP Plans of the Company are implemented and administered by the Nomination & Remuneration Committee.

The Board of Directors confirms that the ESOP Plans are in compliance with the provisions of the Act and Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended ("SBEB & SE Regulations").

Disclosures in terms of Regulation 14 of the SBEB & SE Regulations read with SEBI Circular No. CIR/ CFD/POLICY CELL/2/2015 dated June 16, 2015, are available on the website of the Company at https://www.indostarcapital.com/investors-corner#i nvestor-services.

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

Your Company is committed to create an environment in which all individuals are treated with respect and dignity and promote a gender sensitive and safe work environment. Accordingly, the Board of Directors adopted a Care & Dignity Policy and also constituted an Internal Complaints Committee, in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Considering geographic diversification across the country and increase in number of employees, the Board of Directors have constituted Regional Internal Complaints Committees for North, West, East and South regions.

During the year under review, no complaints related to sexual harassment were received by the Internal Complaints Committee and the Regional Internal Complaints Committees.

GENERAL DISCLOSURE

During the year under review, there has been no change in the nature of business of your Company.

No material changes and commitments affecting the financial position of your Company have occurred between the end of year under review and date of this Boards Report.

Your Company is not required to maintain cost records in terms of Section 148(1) of the Act.

During the year under review, no orders have been passed against your Company by any regulator(s) or court(s) or tribunal(s) which would impact the going concern status and / or the future operations of your Company.

During the year under review, your Company, in the capacity of a financial creditor, has not filed petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being corporate debtors.

During the year under review, there has been no instance of one-time settlement with any Bank(s) or Financial Institution(s).

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

Since your Company is engaged in financial services activities, its operations are not energy intensive nor does it require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is not provided in this Boards Report. Your Company is vigilant on the need for conservation of energy.

During the year under review, your Company did not have any foreign exchange earnings and incurred foreign currency expenditure of 0.23 crore (Previous year foreign exchange expenditure: 0.23 crore).

DIRECTORS RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by

us, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

c) they have taken proper and sufficient care 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;

d) they have prepared the annual accounts on a going concern basis;

e) except for the deficiencies identified in the comparability of previous year figures with current year figures as explained in Note 41.2 of the financial statements in the matters referenced in the Qualified Opinion made by the statutory auditors of the Company on the Internal Financial Controls over Financial Reporting under Clause (i)

of Sub-section 3 of Section 143 of the Companies Act, 2013, the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are required to be strengthened.

APPRECIATION AND ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation to all stakeholders of the Company including the Reserve Bank of India, the National Housing Bank, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Government of India and other Regulatory Authorities, the BSE Limited, the National Stock Exchange of India Limited, the Depositories, Bankers, Financial Institutions, Debenture Trustee, Credit Rating Agencies, Members, Employees and Customers of the Company for their continued support and trust.

By the Order of the Board of Directors

For IndoStar Capital Finance Limited

Bobby Parikh

Chairman

DIN:00019437

Place: Mumbai

Date: August 21, 2023