Muthoot Microfin Ltd Directors Report

To the Members of Muthoot Microfin Limited,

Your directors are pleased to present the 33^rd Boards Report of Muthoot Microfin Limited ("The Company") together with the Audited Financial Statements for the financial year ended March 31,2025.

1. Financial Highlights

The Financial Statements have been prepared in accordance with the Indian Accounting Standards (‘Ind AS) as notified by Ministry of Corporate Affairs (‘MCA) under Section 133 of the Companies Act, 2013 (‘Act) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act, circulars, guidelines and directions issued by the Reserve Bank of India ("RBI") from time to time. The financial statements of the Company are presented as per Schedule III (Division III) of the Companies Act, 2013, applicable to NBFCs as notified by the Ministry of Corporate Affairs (MCA).

H in Millions

	March 31, 2025	March 31, 2024*
Revenue from operations	25,616.93	22,489.33
Other Income	27.47	63.46
Profit/(loss) before Depreciation, Finance Costs, Exceptional items and Tax Expense	6,840.38	14,833.21
Less: Depreciation/ Amortisation/ Impairment	428.37	354.37
Profit /(loss) before Finance Costs, Exceptional items and Tax Expenses	6,412.01	14,478.84
Less: Finance Costs	9,301.05	8,660.42
Profit /(loss) before Exceptional items and Tax Expenses	(2,889.04)	5,818.42
Add/(less): Exceptional items	-	-
Profit /(loss) before Tax Expenses	(2,889.04)	5,818.42
Less: Tax Expenses (Current & Deferred)	(663.81)	1,322.59
Profit /(loss) for the year (1)	(2,225.23)	4,495.83
Total Comprehensive Income/(loss) (2)	419.38	136.77
Total comprehensive income/(loss) for the year (1+2)	(1,805.85)	4,632.60
Add: Balance of profit /(loss) for earlier years	8,374.57	4,559.80
Add: Consolidation of ESOP Trust	56.28	81.34
Less: Transfer to Reserves	-	899.17
Balance carried forward	6,625.00	8,374.57

•Figures of March 31,2024 has been restated during the financial year

2. State of affairs of the Company

As of March 31, 2025, the Company had 3.43 million active customers spread across 1,699 branches, with a gross loan portfolio of H 1,23,567.18 million as compared to H 121,935.00 million as of March 31,2024.

The net worth of the Company as on March 31, 2025 was H 26,322.27 million and capital adequacy as on March 31, 2025 was 27.85% which is well in excess of the mandated 15%.

During the year, the Companys revenue from operations and other income was H 25,644.40 million and incurred a loss of H 2,225.23 million. The funding source for the Company was through private placement of Non-Convertible Debentures ("NCDs") and borrowings from banks/ financial institutions by way of Term Loans, PTCs and ECBs, Outstanding details as summarized below.

(H in Million)

Financial Year	2024-25	2023-24
Privately placed Non-Convertible Debenture	5,593.35	9,657.00
Term Loan	49,119.40	55,133.14
Pass-Through Certificate	11,344.08	14,246.42
External Commercial Borrowings	12,864.52	4,960.17
Total	78,921.35	83,996.73

Your Companys Operational Highlights for the financial year ended March 31, 2025 are as follows:

(H in Million)

Financial Year	March 31,2025	March 31, 2024
Number of Branches	1,699	1,508
Amount disbursed	88,724.83	106,616
Number of active loans	39,98,731	41,00,011
Total Assets under management including securitized and assigned portfolio (Gross Loan Portfolio)	1,23,567.18	121,935
BC Portfolio (Managed for Yes Bank)	9.7	9.8
BC Portfolio (Managed for SIDBI)	619.75	836.97
MSGB (Managed for MFL)	116.67	117.22

3. Share Capital

Authorized Share Capital:

During the year under review, the authorized share capital of the Company was H 250,00,00,000 (Rupees Two Hundred and Fifty crores only) divided into 20,00,00,000 (Twenty Crore) equity shares of H 10/- each aggregating to H 200,00,00,000 (Rupees Two Hundred Crore only) and 5,00,00,000 (Five Crore) preference shares of H10/- each aggregating to H 50,00,00,000/- (Rupees fifty Crore only).

Issued, Subscribed and Paid-up Share Capital:

As on March 31, 2025, the issued, subscribed and paid- up share capital of the Company was H 1,704.92 million comprising of fully paid-up equity shares of face value H 10/- each. During the year under review, there is no change on the issue, subscribed and paid-up share capital of the Company.

Type of share	Number of	Face	Aggregate
	shares	value (J)	value (J)
capital

Equity 17,04,92,176 10 1,70,49,21,760

shares

There was no re-classification or sub-division of the authorized share capital, reduction of share capital, buy-back of shares, change in the capital structure resulting from restructuring, or change in voting rights in respect of any class of the share capital of the company during the financial year.

As on March 31, 2025, none of the Directors of the Company holds instruments which were convertible into Equity Shares of the Company.

Further, Out of the Issued and Paid-up Capital of the Company, 28,94,636 Equity shares are held by MML Employee Welfare Trust set up by the Company for administration of Employee Stock option plans in compliance with SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021.

4. Listing of Shares

The equity shares of the Company were listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The listing fee for the financial years 2024-25 and 2025-26 were paid to both the Stock Exchanges.

5. Dividend

The Board of Directors of your Company has not recommended any dividend for the financial year under review.

Pursuant to Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy, setting out the parameters for the declaration and distribution of dividend. The Policy is available on the website of the Company at: https://muthootmicrofin.com/policies/

6. Transfer to Investor Education and Protection Fund

During the period under review, the Company does not have any amount due to be credited to the Investor Education and Protection Fund as provided in the provisions of Section 125 of the Companies Act, 2013.

7. Amount transferred to Reserves

The Company has not transferred any amount to the reserves during the year.

8. Employee Stock Option Plan (ESOP)

Stock Options are granted to the eligible employees and KMPs of the Company pursuant to the Muthoot Microfin Employee Stock Option Plan 2016 ("ESOP 2016") and

Muthoot Microfin Limited Employee Stock Option Plan 2022 ("ESOP 2022"), as decided by the Nomination & Remuneration Committee. Company has not granted any option during the financial year 2024-25.

During the year under review, 1,10,250 options were cancelled due to separation of employees. The cancelled options were added to the respective plans and will form part of the future grants to be made.

The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is provided in Annexure- I which forms part of this Report.

9. Debentures, bonds or any non-convertible securities

Non-convertible Debentures: During the period under review, your Company has issued debentures (Listed, Secured, Nonconvertible Debentures) aggregating to H 664 million and Listed, Unsecured Bond for an amount of $ 15 million. The debentures outstanding H 5,593.35 million for Listed, Secured NCD and $ 15 million for Listed, Unsecured Bond as on March 31, 2025, are as follows:

	Series	MML-15	MML-16	MML-17
a.	Date of issue of the securities	25-05-2022	01-06-2022	09-06-2022
b.	Date of allotment of Securities	27-05-2022	03-06-2022	15-06-2022
c.	Number of securities	380	1120	932
d.	Whether the issue of the securities was by way of preferential allotment, private placement or public issue	Private Placement	Private Placement	Private Placement
e.	Brief details of the debt restructuring pursuant to which the securities are issued	NA	NA	NA
f.	Issue price	10,00,000	10,00,000	10,00,000
g.	Coupon rate	11.45%	11.55%	9.90%
h.	Maturity date	27-05-2027	03-06-2027	15-12-2025
i.	Amount raised (In H million)	380	1120	932
j.	Amount Outstanding (In H million)	380	1120	699

 

MML-22	MML-23	MML-24	MML-25	MML-26	MML-27
25-01-2023	02-02-2023	02-06-2023	06-07-2023	31-07-2023	02-08-2024
27-01-2023	09-02-2023	05-06-2023	07-07-2023	01-08-2023	06-08-2024
10,000	10,000	14985*	7500	7500	6640
Private Placement	Private Placement	Private Placement	Private Placement	Private Placement	Private Placement
NA	NA	NA	NA	NA	NA
1,00,000	1,00,000	1,00,000	1,00,000	1,00,000	1,00,000
11.00%	11.00%	11%	10.75%	10.75%	8.97%
27-01-2026	27-01-2026	05-06-2026	07-07-2026	01-08-2026	06-08-2028
1000	1000	1500	750	750	664
400	400	899.10	468.75	562.5	664

71

Note : *put option exercised for 15 debentures

Series	Bond-1	Bond-2
a. Date of issue of the securities	21-08-2024	22-10-2024
b. Date of allotment of Securities	26-08-2024	28-10-2024
c. Number of securities	1200	300
d. Whether the issue of the securities was by way of preferential allotment, private placement or public issue	Private Placement	Private Placement
e. Brief details of the debt restructuring pursuant to which the securities are issued	NA	NA
f. Issue price	10,000 USD	10,000 USD
g. Coupon rate	6 Months SOFR + 3.75%	6 Months SOFR + 3.75%
h. Maturity date	27-08-2029	26-10-2029
i. Amount raised (In H million)	12 Million USD	3 Million USD
j. Amount Outstanding (In H million)	12 Million USD	3 Million USD

10. Capital Adequacy

The Capital Adequacy Ratio was 27.85% as on March 31, 2025. The Net Owned Funds (NOF) as on that date was H 21,925.83 million. The minimum capital adequacy requirement stipulated for your Company by Reserve Bank of India is 15%.

11. Annual Return

Pursuant to Section 134 and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return is placed on the website of the Company.

The web-link is: https://muthootmicrofin.com/stakeholders- information/?tab=5.

12. Achievements

During the current Financial Year, your company has won several awards and accolades. Selected few awards/ recognitions are listed hereunder:

• Muthoot Microfin Limited has been recognised

among Indias top 50 Best Workplaces™ in Health and Wellness 2024 by Great Place To Work Institute.

• Muthoot Microfin Limited retained the Great Place To Work? certification for the 6^th time for its commitment to foster a culture of pride, trust, reliability, teamwork, and credibility amongst its employees.

• Muthoot Microfin receives the Corporate Agent

License from IRDAI.

• Muthoot Microfin Limited receives M1C1

Comprehensive Microfinance Grading by CRISIL.

• Muthoot Microfin secures $15 Million from Tripple Jump in non-convertible debentures.

• Muthoot Microfin received WASH awards for

bringing change in the sanitation and water access scenario of the underserved at Sa-Dhan Conclave24 and WASH Awards

• Muthoot Microfin wins Best Cyber Security Initiative Awards at the 4^th Edition Banking Frontiers DNA Awards 2024.

• Muthoot Microfin wins Innovative Customer Service Award from CX Excellence Award 2024

• SBI enters into a co-lending partnership with Muthoot Microfin Limited.

• Muthoot Micorifn recognised as Most Trusted Microfinance Brand of The Year at Brand Vision: India 2030 Leadership Conclave

• Muthoot Microfin Secures E-KYC License.

• Muthoot Microfin Limited has been honoured as a winner in ET NOW Awards as "Best Organisation for Women 2025"

• Muthoot Microfin won Gold in SKOCH Awards in the "Best Customer Application on Digital Financial Inclusion" category for its Mahila Mitra initiative (1.73 million downloads, 4.2-star average rating), and another Gold for "Best Insurance Scheme" for its Griha Suraksha Shield (2.66 million insured beneficiaries).

• Muthoot Microfin secured ESG score of 72.2 by SEBI-licenced ESG rating provider CareEdge Ratings Limited, outperforming Industry Medians across ESG Pillars.

13. Particulars of Loans, Guarantees or Investments

The Company, being an NBFC registered with RBI and engaged in the business of giving loans in the ordinary course of its business, is exempt from complying with the provisions of section 186 (2) of the Companies Act, 2013 with respect to loans, guarantees and investments. Accordingly, the Company is exempt from complying with the requirements to disclose in the financial statement the full particulars of the loans given, investment made or guarantee given or security provided.

The Company has duly complied with the provisions of Section 186 of the Companies Act, 2013 and Rules made thereunder. The details of Loans, Guarantees or Investments made by the Company are given below:

(H)

Name of Companies	Nature of Transactions	Investments
The Thinking Machine	Equity	4,50,000/-
Media Private Limited	investment

Details on the loans given and investments made under the provisions of this section are disclosed in the financial statements. The Company has not given any guarantees or security on behalf of a third party.

14. Change in Nature of Business, if any

There was no change in the nature of business of the Company during the financial year 2024-25.

15. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

There have been no material changes or commitments which affect the financial position of the company which has occurred between the end of the financial year to which the financial statements relate and the date of this Report.

16. Revision of financial statement or the Report

The Company has not revised its Financial Statement or Boards Report during the financial year.

17. Credit Rating

The credit rating awarded to various instruments of the Company as on March 31, 2025, were as follows:

Credit Rating Agency	Instrument	March 31,2025	March 31,2024
CRISIL	Organization grading	M1C1	M1C1
	Bank Lines	A+/ Stable	A+/ Stable
	Non-convertible debentures	A+ /Stable	A+ /Stable
	Commercial paper	Rating Withdrawn	A1 +
	Principal Protected Market Linked Debenture	Rating Withdrawn	PPMLD A+ / Stable

The Credit Rating of different instruments of the Company as on March 31, 2025, was mentioned under note 55 (xix) of the Financial Statements under RBI disclosures.

18. Directors and Key Managerial Personnel

I. Composition of the Board of Directors

As on March 31, 2025, the Board of your Company comprised of Ten Directors with one Executive Director, four Non-Executive Directors and five Independent Directors. The composition of the Board of Directors meets the requirement of provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.

Details of the Directors are as follows:

Category	Name of Director
Executive Director	Mr. Thomas Muthoot John
Non-Executive	Mr. Alok Prasad
Independent	Ms. Pushpy B Muricken
Directors	Mr. Thai Salas Vijayan
	Ms. Bhama Krishnamurthy
	Mr. Anil Sreedhar
Non-Executive	Mr. Thomas Muthoot
Directors	Mr. Thomas George Muthoot
	Mr. John Tyler Day
	Mr. Akshaya Prasad

A. Change in Composition of the Board of Directors

During the year under review, the following changes were on the composition of Board of Directors (‘Board):

Director and continued as the NonExecutive Director.

• Mr. Thomas Muthoot John, Executive Director, was inducted to the Board effective from December 19, 2024 and requisite approvals were received for his appointment from the shareholder by way of postal ballot.

• Inducted Mr. Anil Sreedhar, Independent Director, to the Board with effect from December 30, 2024 and requisite approvals were received for his appointment from the shareholder by way of postal ballot.

i. Directors retiring by rotation

At the 32^nd Annual General Meeting held on July 18, 2024, Mr. Thomas George Muthoot, Director (DIN 00011552) retired by rotation in compliance with the provisions of Section 152 of the Companies Act, 2013 and was reappointed.

Mr. Thomas Muthoot, Director (DIN: 00082099) is due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.

ii. Re-appointment of Independent Directors

• Mr. R Anand, Independent Director (DIN 00243485) has tendered his resignation on account of health-related matters and the Board considered the same with effect from December 2, 2024.

• On December 19, 2024, Mr. Thomas John Muthoot, Non-Executive Director has resigned from the Board due to preoccupation. Also, Mr. Thomas Muthoot relinquished form the position of Managing

During the current financial year 2024-25, there were no re-appointment of Independent Directors.

iii. Approval of the Members will be sought at the forthcoming Annual General Meeting to the following appointments.

There is no approval of the members sought with respect to the Composition of Board of Directors at the forthcoming Annual General Meeting of the Company.

iv. Cessations

During the year under review, Mr. R Anand (DIN 00243485) (Non-Executive Independent Director) and Mr. Thomas John Muthoot (DIN 00011618) (NonExecutive Director) resigned from the Board of Directors of the Company effective from December 2, 2024 and December 19, 2024 respectively.

B. Change in the composition of the Board of Directors after the end of the financial year and up to the date of this Report

There were no changes in the composition of the Board of Directors after the end of the financial year and up to the date of this Report.

II. Key Managerial Persons

The Key Managerial Persons of the Company in accordance with Regulation 2(1)(bb) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations and Section 2(51) of the Companies Act, 2013 are as follows:

Name Designation

Mr. Thomas Executive Director

Muthoot John

Mr. Sadaf Sayeed Chief Executive Officer

Mr. Praveen T Chief Financial Officer

Ms. Neethu Ajay Chief Compliance Officer and

Company Secretary

III. Woman Director

In terms of the provisions of Section 149 of the Act and Regulation 17(1 )(a) of Listing Regulations, the Company is required have at least one-woman director on the Board.

The Company has Ms. Bhama Krishnamurthy (DIN: 02196839) and Ms. Pushpy B Muricken (DIN: 03431198) as Independent Woman Directors on the Board.

IV. Declaration by Independent Directors and statement on compliance with the code of conduct

The Company has received necessary declarations with respect to independence from all the independent directors in compliance of Section 149 (7) of the Companies Act, 2013.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and the Code of Conduct for Directors and senior management personnel formulated by the Company.

V. Nomination & Remuneration Policy

The Nomination and Remuneration Committee has formulated the Nomination and Remuneration

Policy which sets out the criteria for determining qualifications, positive attributes and independence of Directors. It also lays down criteria for determining qualifications, positive attributes of KMPs and senior management and other matters provided under Section 178(3) of the Act and Listing Regulations. The Nomination and Remuneration Policy of the Company as approved and adopted by the Board is available on the website of the Company at: https:// muthootmicrofin.com/policies/

The policy is in compliance with the provisions of Section 178 of the Companies Act, 2013, SEBI (LODR) regulations and guidelines of the Reserve Bank of India on Corporate Governance Norms for NBFCs. The policy covers the following:

1. Objectives, composition and responsibilities of the Nomination and Remuneration Committee

2. Guidelines for NRC on appointment and removal of directors/KMP and senior management

3. Fit and proper criteria to determine the suitability of the person for appointment / continuing to hold appointment as a Director on the Board of the Company.

4. Criteria for independence - for directors to be appointed as independent directors on board of the company.

5. Criteria to be considered while appointing KMP, senior management personnel

6. Removal of a director, KMP or senior management

7. Remuneration of directors, key managerial personnel and senior management

8. Evaluation of performance of the Directors and the overall Board broadly on the basis of the laid-out criteria.

9. Criteria for review of the policy due to change in regulations or as may be felt appropriate by the Committee subject to the approval of the Board of Directors.

19. Board Meeting

During the financial year 2024-25, our Board has met eleven (11) times, and the meetings were held on May 06, 2024, May 11, 2024, June 08, 2024, June 27, 2024, August 09, 2024, August 30, 2024, November 05, 2024, December 19, 2024, December 30, 2024, February 06, 2025, and March 20, 2025.

The requisite quorum was present for all the Meetings. The intervening gap between the Meetings was within the period prescribed under the Act and Listing Regulations.

The Company provides all the Board Members with the facility to participate in the meetings of Board and its committee through Video Conferencing or Other AudioVisual Means. The details of the meetings have been enclosed in the Corporate Governance Report, which forms part of this report.

Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on March 29, 2025, and the Directors reviewed the matters enumerated under Schedule IV(VIl)(3) to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directors attended the said meeting.

20. Committees of Board

The Company has various Committees which have been constituted as part of good corporate governance practices and the same follow the requirements of the relevant provisions of applicable laws and statutes.

The Committees of the Board are the Audit Committee, the Nomination and Remuneration Committee, the Borrowing Committee, the Corporate Social Responsibility Committee, the Stakeholders Relationship Committee, the IT Strategy Committee, the Asset Liability Management Committee, Debenture Issue and Allotment Committee and the Risk Management Committee.

The details with respect to the composition, powers, roles, terms of reference, meetings held and attendance of the directors at such meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

21. Recommendations of the Audit Committee

There was no instance during the year where the Board has not accepted the recommendations of the Audit Committee requiring disclosure pursuant to Section 177(8) of the Companies Act, 2013.

22. Companys policy on Directors appointment and remuneration

The Company, pursuant to the provisions of Section 178 of the Companies Act, 2013, has formulated and adopted a policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 which is available on the website of the Company at : https:// muthootmicrofin.com/policies/

23. Annual Evaluation of Board, Committees, and Individual Directors

The meeting of the Board of Directors held on March 20,

, 2025, conducted an evaluation of its own performance

, and that of its committees and individual directors.

The evaluation process is carried out by collecting feedback from each of the Directors /committee members about the Board/committees performance and feedback about each of the other directors.

The feedback was collected through structured questionnaires. The Board then evaluated all the feedback ¹ received and expressed their satisfaction.

Aspects covered in the feedback inter alia are:

a. Composition of Board/committees.

b. Appropriateness of its size, experience and expertise.

c. Effective participation, integrity and credibility.

d. Ability to handle conflict collectively, Interpersonal skills, and willingness to address issues proactively.

e. Performance against set goals.

f. Adequacy of terms of reference to serve the purpose.

The Board of Directors has conducted these evaluations through electronic mode by distributing electronic evaluation forms to the Directors.

24. Compliance

The Company is registered with the Reserve Bank of India ("the RBI") as a NBFC-MFI. As per the Framework for Scale Based Regulation for Non-Banking Financial Companies issued by the RBI vide circular dated October 22, 2021 (‘SBR Framework), the Non-Banking Finance Companies are categorised into four layers, NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer (NBFC-ML), NBFC - Upper Layer (NBFC-UL) and NBFC - Top Layer (NBFC-TL) based on size, activity, and risk perceived. According to the said regulation, the Company has been categorised as NBFC - ML.

The Company has listed its equity shares in the BSE Limited and the National Stock Exchange of India Limited and has various Non- Convertible Debt Instruments listed in the BSE Limited.

The Company has complied with and continues to comply with all applicable Laws, Rules, Circulars, Regulations, etc. including Directions of RBI for NBFC-MFIs and various SEBI Listing Regulations, and does not carry on any activities other than those specifically permitted by RBI for NBFC-MFIs.

i

25. Code of Conduct for Board and Senior Management

In compliance with Regulation 26(3) of the Listing Regulations and the Act, the Company has framed and adopted a Code of Conduct for Directors and Senior Management ("the Code"), which provides guidance on ethical conduct of business and compliance with laws and regulations.

All members of the Board and Senior Management personnel have affirmed their compliance with the Code as of March 31, 2025. A declaration to this effect, signed by the Managing Director/Executive Director in terms of the Listing Regulations, is given in the Report of Corporate Governance forming part of this Annual Report. The Code is made available on the Companys website at https:// muthootmicrofin.com/stakeholders-information/?tab=1

26. Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information

The Board has formulated the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (Fair Disclosure Code), for the fair disclosure of events and occurrences that could impact the price discovery in the market for the Companys securities. The Fair Disclosure Code also provides for maintaining uniformity, transparency and fairness in dealings with all stakeholders and ensuring adherence to applicable laws and regulations. The same is available on the website of the Company at https://muthootmicrofin.com/policies/

27. Prevention of Insider Trading

The Board of Directors of the Company has formulated and adopted a Code of Conduct to regulate, monitor and report the trading of shares by insiders. This code lays down the guidelines and procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them of the consequences of non-compliance. The same is available on the website of the Company at https://muthootmicrofin.com/policies/

28. Subsidiary Company, Joint Ventures and Associate Companies

The Company does not have any subsidiary, Joint venture or Associate Company.

29. Deposit

During the financial year, your Company has not accepted any deposits from the public within the meaning of provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 or any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

Therefore, the disclosures required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014 and Rule 2(1 )(c) of Companies (Acceptance of Deposits) Rules, 2014 are not applicable.

30. Remuneration Details of Directors, KMPs and Employees

Details of managerial remuneration pursuant to Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned below:

Sl No.	Particulars	Details
1	The ratio of the remuneration of each director to the median remuneration of the	Executive Director- 18.3 : 1
	employees of the Company for the financial year	Other than remuneration to Executive Director, Company only pays sitting fees to Independent Director.
2	*The percentage increase in remuneration of: a) Managing Director / Executive Director	NA
	b) Chief Executive Officer	15%
	c) Chief Financial Officer	41%
	d) Chief Compliance Officer & Company Secretary	75%
3	Percentage increase in the median remuneration of employees in the financial year	4.99%
Sl No.	Particulars	Details
4	Number of permanent employees on the rolls of the Company	10,646
5	The Company has a remuneration policy, and the remuneration is as per the remuneration policy of the company	Yes
6	Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration	Employees - 5.17% Managerial Personnels - 10.39%

Note:

Post employment benefits are included in the remuneration.

* The percentage increase in the remuneration of the CEO, CFO, and CCO & CS has been calculated based on their base salary, as the ESOP component varies depending on individual exercise by each employee.

(Information as per Rule 5 of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

Top 10 employees in terms of remuneration drawn during the year

Employee name	Designation	Remuneration in FY 2024-25 (in J Million)	Nature of employment, whether contractual or otherwise;	Educational Qualification & Experience	Date of Joining	Age	Last employment before joining the company;	Whether relative of any Director or Manager
Sadaf	Chief	56.04	Permanent	MBA	26-08-2015	44	Satin Credit Care	No
Sayeed	Executive Officer						Network Ltd.
Praveen T	Chief	13.42	Permanent	CA	26-01-2016	39	Ark Power Controls	No
	Financial Officer						Pvt Ltd.
Subhransu	Chief	13.06	Permanent	MBA	26-08-2015	47	ICICI Bank Limited	No
Pattnayak	Human Resource Officer
Udeesh	Chief	12.12	Permanent	MBA	26-02-2016	42	Fullerton India	No
Ullas	Operating						Credit Company
	Officer						Ltd.
Dileep	Chief	11.11	Permanent	MBA	26-01-2016	42	Satin Credit Care	No
Kumar	Internal						Network Ltd
Pathak	Auditor
Paras	Deputy	9.60	Permanent	MA	24-07-2019	44	Asirvad	No
Kumar Wasnik	COO						Microfinance Ltd
Linson C	Chief	7.97	Permanent	MBA-MSC	21-07-2022	50	Joy Alukkas	No
Paul	Technology Officer						India Limited
Nitin	Deputy	7.73	Permanent	MBA	24-09-2018	42	Bharat Financial	No
Sadashiv	Vice						Inclusion Ltd
Awati	President
Jinsu	Chief Risk	7.15	Permanent	CA	26-10-2016	45	Tamilnad	No
Joseph	Officer						Mercantile Bank
Srinivas	Senior Vice	7.07	Permanent	B.sc	26-10-2016	45	Share Microfin Ltd	No
Vadla	President

Employees who are employed throughout the financial year and was in receipt of remuneration for the FY 2024-25, in the aggregate, was not less than J 1,02,00,000/- (One crore and two lakh rupees)

Employee name		Remuneration	Nature of employment,	Educational	Date of		Last employment	Whether relative
	Designation	in FY 2024-25 (in J Million)	whether contractual or otherwise;	Qualification & Experience	Joining	Age	before joining the company;	of any Director or Manager
Sadaf	Chief	56.04	Permanent	MBA	26-08-2015	44	Satin Credit Care	No
Sayeed	Executive Officer						Network Ltd.
Praveen T	Chief	13.42	Permanent	CA	26-01-2016	39	Ark Power Controls	No
	Financial Officer						Pvt Ltd.
Subhransu	Chief	13.06	Permanent	MBA	26-08-2015	47	ICICI Bank	No
Pattnayak	Human Resource Officer						Limited
Udeesh	Chief	12.12	Permanent	MBA	26-02-2016	42	Fullerton India	No
Ullas	Operating						Credit Company
	Officer						Ltd.
Dileep	Chief	11.11	Permanent	MBA	26-01-2016	42	Satin Credit Care	No
Kumar	Internal						Network Ltd
Pathak	Auditor
Employees who are employed for a part of the FY 2024-25 and was in receipt of remuneration for any part of that year at a rate which, in the aggregate, was not less than J 8,50,000/- (Eight lakh and fifty thousand rupees) per month
Employee name	Designation	Remuneration in FY 2024-25	Nature of employment, whether contractual or otherwise;	Educational Qualification & Experience	Date of Joining	Age	Last employment before joining the company;	Whether relative of any Director or Manager
				NIL

Note: Post employment benefits are included in the remuneration.

Employed throughout the financial year or part thereof, was in receipt of remuneration in the year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company. : NIL

31. Criteria for making payments to Non-Executive Directors

Apart from the sitting fee paid to the Independent Directors, expenses incurred by the Company on behalf of the Directors for their travel and accommodation and reimbursement of expenses incurred by the Directors during and for the purpose of attending Board and Committee meetings, the Company has made no other payment to its Non-Executive Directors.

32. Directors Responsibility Statement

In terms of Section 134 (5) of the Companies Act 2013, the Directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards had been

followed along with proper explanation relating to material departure;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025, and of the profit and loss of the Company for that period;

iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a going concern basis;

v) 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

vi) The Directors has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

33. Adequacy of Internal Audit and Financial Controls

The Company has adequate internal controls and processes in place with respect to its operations, which provide reasonable assurance regarding the reliability of the financial statements and financial reporting as also functioning of other operations. These controls and processes are driven through various policies and procedures.

During the year, the review of Internal Financial Controls was done, and the report was placed before the Audit Committee. As per the report the Controls are effective and there are no major concerns. The internal financial controls are adequate and operating effectively to ensure orderly and efficient conduct of business operations.

34. Fair Practices Code

The RBI had been issuing revised Fair Practices Code guidelines from time to time and your Company has adhered to all of them without any compromise. The Fair Practices Code, Code of Conduct, and Grievance Redressal Mechanism have been displayed prominently in all the branches of the Company.

35. Statutory Auditors

M/s. Suresh Surana & Associates LLP Indian member of RSM International, Chartered Accountants, (Firm Registration No. 121750W/W-100010), having a valid Peer review Certificate issued by the Peer Review Board of ICAI, in accordance with Section 139 of the Companies Act, 2013 read with RBI Circular No. DoS. CO.ARG/SEC.01/08.91.001/2021-22, were appointed as the Statutory Auditor of the Company for a term of three consecutive years, at the 32^nd Annual General Meeting held on July 18, 2024.

The auditors have submitted their Report on the accounts of the Company for the Financial Year ended March 31,2025, to the Board of Directors. The Board has duly examined the Statutory Auditors Report which is self-explanatory. The Report does not contain any qualifications, reservations or adverse remarks.

36. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. SEP Associates, Company Secretaries, Kochi to conduct the Secretarial Audit of the Company for the Financial Year 2024-25. The Secretarial Audit Report for the financial year ended March 31, 2025, is annexed to this report as Annexure II.

The Secretarial Audit Report for the financial year 202425 does not contain any qualification, reservation, adverse remark or disclaimer except in respect of the matter mentioned in Annexure II to this report along with the Management response provided in clause 38 herein.

37. Internal Auditor

The Company has an independent internal audit department headed by Chief Internal Auditor, Mr. Dileep Kumar Pathak. The internal audit department broadly assesses and contribute the overall improvement of the organizations governance, risk management, and control processes using a systematic and disciplined approach. The internal audit team follows Risk Based Internal Audit which helps the organization to identify the risks and address them accordingly based on the risk priority and direction provided by the board of directors. The Internal audit reports are presented to the Audit Committee of the Board on a quarterly basis. Based on the reports of the internal audit team, the process owners undertake corrective action in their respective areas.

Pursuant to the provisions of Section 138 of the Act, the Board of Directors, on the recommendation of the Audit Committee appointed M/s. Ernst & Young (E&Y) India LLP, as the Internal Auditor of the Company for a period of two years from financial year 2024-25 to 2025-2026 for providing co-sourced internal audit services.

38. Explanation or Comments on Qualifications, Reservations or Adverse Remarks or Disclaimers made by the Statutory Auditor / Secretarial Auditor in their Reports

The Statutory Auditors have given their report ‘with an unmodified opinion, on the Financial Statements of the Company for Financial Year 2024-25.

There has been no qualification, reservation, adverse remark or disclaimer made by the Statutory Auditor in their Report for the year under review.

With respect to the remark made by the Secretarial Auditors in their report, the Company was imposed fine on two instances reasoning delay in submission of prior intimation/ non submission of intimation about the meeting of Board of Directors in accordance with Regulation 29(2)/29(3) and regulation 50 (1)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, on

receipt of communication from the stock exchanges, the Company has promptly provided the details of meeting along with prior intimation acknowledgments. As a good governance practice, the Company has honored the payment and made representation for waiver of fines imposed. Company is awaiting response from the stock exchanges.

39. Compliance with Secretarial Standards

During the Financial year, the Company has complied with the provisions of applicable Secretarial Standards viz. Secretarial Standard on meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2).

40. Corporate Social Responsibility

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 the Company has established the Corporate Social Responsibility Committee (CSR Committee) in the year 2015 and the composition and function thereof are mentioned in the Corporate Governance Report.

The Board has adopted the CSR Policy, formulated and recommended by the CSR Committee, and the same is available on the website of the Company at: https:// muthootmicrofin.com/policies/

Companys CSR initiatives are mainly implemented through the Muthoot Pappachan Foundation (MPF), a Public Charitable Trust - the CSR arm of Muthoot Pappachan Group (MPG). MPF tackles issues affecting the communities in which our businesses operate.

The CSR initiatives of MPG revolve around the theme ‘HEEL, covering ‘Health, Education, Environment and Livelihood. Detailed information report on the CSR policy and the CSR initiatives undertaken during the Financial Year 2024-25 is given in the Annexure MI-‘Annual Report on CSR activities.

41. Business Responsibility and Sustainability Report

42. Management Discussion and Analysis Report

Pursuant to Regulation 34(2)(e) of the Listing Regulations, a detailed Management Discussion and Analysis Report for the Financial Year under review is presented in a separate section, forming part of the Annual Report.

The state of the affairs of the business along with the financial and operational developments has been discussed in detail in the Management Discussion and Analysis Report.

43. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI.

The Report on Corporate Governance as required under Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Report.

Further, as required under Regulation 17(8) of the Listing Regulations, a certificate from the Chief Executive Officer and Chief Financial Officer is annexed with the Annual Report.

A certificate from CS Lakshmi Pradeep and Associates, Practicing Company Secretary, confirming the compliance of the Company with the conditions of Corporate Governance, as stipulated under the Listing Regulations, is attached to the Report of Corporate Governance

44. Details of the auctions of Gold conducted during the financial year.

Details of auctions of Gold conducted during the financial year is as follows:

(H in million)

Instrument	March 31, 2025	March 31,2024
Number of loan accounts	1539	1063
Outstanding amounts	103.01	37.69
Value fetched	111.54	40.62
Whether any sister concerns participated in the auction	No	Yes

In accordance with Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR), covering disclosures on the Companys performance on Environment, Social and Governance parameters for the reporting period, which forms part of this Annual Report as Annexure IV.

The BRSR provides a comprehensive account of the Companys business performance and impacts, and it is aligned with the NGRBC (National Guidelines on Responsible Business Conduct) on Social, Environmental and Economic Responsibilities of Business, issued by the Ministry of Corporate Affairs.

45. Related Party Transaction

All contracts/arrangements/transactions entered by the Company during the Financial Year with related parties were in the ordinary course of business and on an arms length basis.

During the year under review, your Company had not entered into any contract/arrangement/transaction with Related Parties which could be considered material in

accordance with the Policy on Related Party Transactions. Further, there were no materially significant related party transactions entered by the Company with Promoters, Directors, KMP or other persons which may have potential conflicts with the interests of the Company.

The particular of contracts or arrangements made with related parties pursuant to Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure V which forms part of this report. Details of Related Party Transactions as required under Indian Accounting Standard (Ind AS-24) are reported in Note no. 36 forming part of the Financial Statements.

Disclosure on Related Party Transactions, in compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable accounting standards, are made in the financial statements. Also, the Company has adopted the policy on Materiality and Dealing with Related Party Transaction which is available on the website of the Company at: https://muthootmicrofin.com/policies/

Disclosures of transactions of the listed entity with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for annual results is provided in the financial statements.

46. Details of Frauds reported by Auditors

Pursuant to sub-section 12 of Section 143 of the Act, the Statutory Auditors and the Secretarial Auditors of the Company have not reported any instances of material frauds committed in the Company by its officers or employees, except few instances of cheating, forgery, misappropriation and criminal breach of trust, which are duly identified by the Company and are disclosed as Note 55 (xxvi) to the Financial Statements.

47. Risk Management

As a NBFC- MFI focusing on unorganized and under serviced sector, risk management is an integral part of our business. Your Company has a Board approved comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework, established system and adequate controls for identification, assessment, measurement, reporting, mitigation and/or managing of risks. The processes, policies and procedures are periodically reviewed by the Risk Management Committee and the Board of Directors. Regular review, stress testing and scenario analysis of portfolios, self-assessments of controls and monitoring of key risk indicators enhances the effectiveness of

risk management framework in your Company. Risk Management Committee evaluates and monitors Credit, Operational, IT, Financial, Regulatory, Market and Reputational risks and its all-associated risks.

Your Companys internal control systems, organizational structure, processes, policies, and code of conduct together form a robust mechanism of internal controls that govern efficient functioning of the business, and the existing risk management measures are being regularly upgraded to ensure risk avoidance and risk mitigation. There are no risks which in the opinion of the Board threaten the existence of your Company.

48. Technology Absorption, Conservation of Energy, Foreign Exchange Earnings and Outgo

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Company. However, your Company has been taking steps at all times for the conservation of energy.

Foreign Exchange Earnings & Outgo Foreign Exchange Earnings - H 1.59 million Foreign Exchange Outgo - H 2,021.91 million

49. Vigil Mechanism

Your Company is committed to the highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013. All Directors, employees and stakeholders can raise their concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against your Company. As per the Whistle Blower Policy implemented by the Company, Employees, Directors, customers, dealers, vendors, suppliers, or any stakeholders associated with the Company are free to report illegal or unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Corporate Governance Policies or any improper activity, to the Chairman of the Audit Committee or Chief Compliance Officer and Company Secretary or Chief Executive Officer of the Company. The policy provides for adequate safeguard against victimization.

Any incidents reported are investigated and suitable actions are taken in line with the whistle blower policy. The Whistle Blower Policy is also available on your Companys website at: https://muthootmicrofin.com/policies/

50. Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operations in future

There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in the future.

51. Corporate Insolvency Resolution Process initiated under The Insolvency and Bankruptcy Code, 2016 (IBC)

There were no applications filed for corporate insolvency resolution process, by any financial or operational creditor of the Company or by the company itself, under the IBC before the NCLT.

52. Disclosure as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The company has in place a Policy for prevention of Sexual Harassment at the Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.The Company has constituted the Prevention of Sexual Harassment Committee to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual

harassment complaints received and disposed of during the period under review:

(a) Number of complaints pending at the beginning of the year: Nil

(b) Number of complaints received during the year: Nil

(c) Number of complaints disposed off during the year: Nil

(d) Number of cases pending at the end of the year: Nil

53. Details of Debenture Trustee

During the financial year, the following debenture trustees are associated with the Company:

Catalyst Trusteeship Vardhman Trusteeship

Limited Pvt Ltd.

901,9^th Floor, Tower-B, The Capital, A Wing, 412A, Peninsula Business Park, Bandra Kurla Complex,

Senapati Bapat Marg, Bandra (East)

Lower Parel (W) - 400013 Mumbai 400 051.

Tel +91(022)4922 0555 Tel: 022-42648335

54. Acknowledgment

Your Directors wish to place on record their appreciation for the assistance, co-operation and guidance received by the Company from the Customers, Shareholders, Debenture Holders, the Central Government, the State Government, the Reserve Bank of India, the Registrar of Companies, Mumbai, the Securities and Exchange Board of India, the BSE Limited, the National Stock Exchange of India Limited, Debenture Trustees, Depositories, Registrar and Share Transfer Agent, Credit Rating agencies and other Regulatory Authorities and Bankers during the year under review and look forward to their continued support. Your directors also wish to place on record their deep sense of appreciation for the committed services of the Employees of the Company.

	For and on behalf of the Board of Directors
	Thomas Muthoot John	Thomas Muthoot
Kochi	Executive Director	Director
08.05.2025	(DIN 07557585)	(DIN 00082099)