Poonawalla Fincorp Ltd Directors Report

To the Members,

Your directors have pleasure in presenting the Forty Fifth Annual Report, along with the Audited Financial Statements of the Company, for the financial year ended March . 31, 2025.

FINANCIAL HIGHLIGHTS (STANDALONE):

(Rs. in Crore)

Particulars	FY 2024-25	FY 2023-24
Total Income	4,222.84	3,151.82
Finance cost	1,515.09	955.10
Net income	2,707.75	2,196.72
Operating expenses	1,290.57	807.36
Pre-provisioning operating profit	1,417.18	1,389.36
Net loss on derecognition of financial instruments	94.41	-
Impairment on financial instruments	1,458.17	72.02
Profit/(loss) before exceptional item and tax	(135.40)	1,317.34
Exceptional items	-	1,221.20
Profit/(loss) before tax	(135.40)	2,538.54
Profit/(loss) after tax	(98.34)	2,055.96
Retained earnings as at the beginning of the year	1,721.55	383.59
Profit/(loss) after tax	(98.34)	2,055.96
Other comprehensive income on defined benefit plan	(1.47)	0.61
Retained earnings before appropriations	1,621.74	2,440.16
Appropriations
Transfer to reserve fund under Regulation 45-IC of Reserve Bank of India Act, 1934	-	(411.20)
Dividend paid	-	(307.41)
Retained earnings as at the end of the year	1,621.74	1,721.55

FINANCIAL PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS:

Total Income on a standalone basis increased to RS.4,222.84 Crore in FY 2024-25 from RS.3,151.82 Crore in FY 2023-24. Further, Net Income on a standalone basis increased to RS.2,707.75 Crore in FY 2024-25 from RS.2,196.72 Crore in FY 2023-24 due to increase in AUM.

The impairment on financial instruments increased to RS.1,458.17 Crore in FY 2024-25 from RS.72.02 Crore in FY 2023-24 largely on account of the erstwhile Small ticket personal loan book (STPL), this product was subsequently re-calibrated.

The Companys Profit/loss After Tax ("PAT") on a standalone basis decreased to H(98.34) Crore in FY 2024-25 from RS.2,055.96 Crore in FY 202324. PAT excluding exceptional items decreased to H(98.34) Crore in FY 2024-25 from RS.1,027.37 Crore in FY 2023 - 24, due to one-time Opex and accelerated provisioning on erstwhile STPL book in Q2FY25 and continued investment in the new businesses.

The Companys Net Interest Margin ("NIM") decreased to 9.6% in FY 2024-25 as compared to 11.2% in

FY 2023-24 primarily on account of higher secured book mix.

On a standalone basis, the Capital Risk Adequacy Ratio ("CRAR") as at March . 31, 2025, was 22.94% against the RBI stipulated norm of 15%.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis, as required in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), forms part of this Report.

CHANGE IN THE NATURE OF BUSINESS:

During the year, there was no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT:

There are no material changes and commitments which affected the financial position of your Company, which occurred between the end of the

financial year to which the financial statements relate and up to the date of this Report.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the requirements of Regulation 34 of SEBI Listing Regulations, your Company had prepared Consolidated Financial Statements in accordance with Ind AS -110 - ‘Consolidated Financial Statements and Ind AS- 27 - ‘Separate Financial Statements. The Consolidated Financial Statements forms part of this Report.

SUBSIDIARY AND JOINT VENTURE COMPANIES AND ITS PERFORMANCE HIGHLIGHTS:

The Company has one Joint Venture Company Jaguar Advisory Services Private Limited ("JASPL") and no Subsidiary as on March . 31, 2025.

JASPL, a Joint Venture with HDI Global SE is an advisory services Company domiciled in India. JASPL is a special purpose vehicle (SPV) of the Company. The Board of Directors and the Shareholders of the Company have approved divestment of 11,000 equity shares constituting 48.89% of the share capital held by the Company in JASPL, the said transaction is subject to requisite regulatory approvals. The Board reaffirmed the proposal to divest its shareholding in JASPL at its meeting held on April 25, 2025, and accordingly in line with the requirements of Ind - AS 105 "Non-Current Assets Held for Sale and Discontinued Operations", such investments have been classified as assets held for sale.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys joint venture in Form No. AOC-1 is provided in the financial statements of the Company.

TRANSFER TO RESERVE:

During the year under review, since there is no profit, the Company has not transferred amount to Reserve as required under Regulation 45-IC of the Reserve Bank of India Act, 1934.

DIVIDEND:

In view of the future growth of the Company, the Board of Directors has decided to conserve capital. Therefore, the Board has decided not to recommend any dividend for the FY 2024-25.

The Dividend Distribution Policy, in terms of Regulation 43A of the SEBI Listing Regulations and RBI regulations and as reviewed and adopted by

the Board of Directors of the Company, is available on the Companys website viz., URL: https://

poonawallafincorp.com/documents/20121/0/ Dividend-Distribution-Policy.pdf/f441908d-d562- 4e0b-9900-2cac67b11686

DEPOSITS:

Being a non-deposit taking Non-Banking Financial Company, your Company has not accepted any deposits from the public within the meaning of the provisions of the Master Direction Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and the provisions of the Act.

EMPLOYEE STOCK OPTION SCHEMES:

Equity based compensation is an integral part of employee compensation across sectors which enables alignment of personal goals of the employees with organizational objectives by participating in the ownership of the Company through share-based compensation scheme/plan. Your Company believes in rewarding its employees for their continuous hard work, dedication, and support, which have contributed to the Companys growth and success.

During the year, the Shareholders of the Company on May 13, 2024 had instituted Employee Stock Option Plan 2024 Scheme II (ESOP 2024 Scheme II). The options are to be granted to the eligible employees at the discretion of the Nomination and Remuneration Committee of the Company and at the fair market value. The options generally will vest in a graded manner and are exercisable which have contributed to the Companys growth and success.

The Employee Stock Option Schemes ("ESOS") granted to the employees of the Company currently operate under the following Schemes:

• Employee Stock Option Plan 2021 (ESOP- 2021)

• Employee Stock Option Plan 2024 Scheme II (ESOP 2024 Scheme II)

During the year under review, the Company has granted 40,000 options under ESOP 2021 and 1,80,52,000 options under ESOP 2024 Scheme II.

Further, the Board of Directors at its meeting held on April 25, 2025 has approved amendment in the ESOP 2024 Scheme II to increase the number of stock options in the Plan Pool allocated under ESOP 2024 Scheme II from 2,00,00,000 options to 3,25,00,000 options subject to approval of Shareholders.

During the year, the Nomination and Remuneration Committee of the Company at its meeting held on June 01, 2024 cancelled ungranted stock options under the Employee Stock Option Plan-2021 ("ESOP - 2021") and that any stock option getting lapsed in future shall also not be reissued. Further the committee has recommended evaluation for cancellation of Employee Stock Option Plan-2024 through trust route and subsequent dissolution of the PFL Employee Welfare Trust subject to requisite approvals and compliances as per applicable law.

The Employee Stock Option Plan 2007 and Restricted Stock Option Plan 2014 have been terminated by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee. All the options granted under the respective plan have been exercised or have lapsed or ungranted options have been cancelled.

The aforesaid Schemes are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB&SE) Regulations, 2021"), to the extent applicable.

The Nomination and Remuneration Committee of the Company, inter alia, administers and monitors the Schemes in accordance with the SEBI (SBEB&SE) Regulations, 2021.

A statement giving complete details, as on March . 31, 2025, as required under the Act and Regulation 14 read with Part F of Schedule I of the SEBI (SBEB&SE) Regulations, 2021 is available on the website of the Company at https://poonawallafincorp. com/investor-governance. These details, along with the certificate from the Secretarial Auditor of the Company, as required under Regulation 13 of the SEBI (SBEB&SE) Regulations 2021, the ESOP Schemes have been implemented in accordance with the Regulations, would be placed and available for inspection by the Members during the Annual General Meeting ("AGM") of the Company.

Grant wise details of ESOP vested, exercised, allotted and cancelled are also provided in the notes to the standalone financial statements.

The Company has not issued any sweat equity shares or equity shares with differential voting rights during FY 2024 - 25.

CHANGES IN SHARE CAPITAL:

During the year, your Company allotted 34,63,738 equity shares arising out of the exercise of Employee Stock Options granted to eligible employees of your Company.

After the allotment of the aforesaid equity shares, the total issued, subscribed and paid-up share capital of the Company as of March . 31, 2025, stood at RS.155,60,28,800/- comprising 77,80,14,400 equity shares of RS.2/- each. The new equity shares issued shall rank pari-passu with the existing equity shares of the Company in all respects.

Further, PFL Employee Welfare Trust is holding 50,80,000 equity shares of the Company as on March . 31, 2025. The shareholding is disclosed as "non-promotor and non-public shareholding" in the Shareholding pattern of the Company.

FUND RAISING:

During the year under review, your Company continued with its diverse methods of sourcing funds including borrowing through Non Convertible Debentures (NCD), Commercial Paper, External Commercial Borrowings, Term Loan and Working Capital Facilities and maintained prudential Asset Liability match throughout the year. Your Company sourced funds by way of issuing debentures to and obtaining loans from banks and other institutions at competitive rates. Your Company continues to expand its borrowing profile by tapping new lenders.

During the year, the Company has raised fresh term loans RS.6,450 Crore and external commercial borrowings of RS.1,477 Crore from banks and other financial institutions for a door-to-door tenor ranging from 2 to 5.5 years. The Company also raised funds through Commercial Paper aggregating to RS. 17,115 Crore (peak outstanding of CP during the year was RS. 5,350 Crore) and Secured Non-Convertible Debentures of RS. 960 Crore during the year. The funds raised through Commercial Papers and NonConvertible Debentures for the purpose specified in the respective offer documents. As on March . 31, 2025, your Company does not have any listed green debt securities.

Further disclosure related to Perpetual Debt Instrument as per Reserve Bank of India (NonBanking Financial Company - Scale Based Regulation) Directions, 2023 ("RBI Scale Based Regulations") is provided in the standalone financial statements.

CREDIT RATING:

During the year under review, CRISIL Ratings reaffirmed the ratings assigned to bank facilities and debt instruments in August 2024. The ratings of longterm bank facilities, Non-Convertible Debentures and Subordinated Debt were reaffirmed as CRISIL AAA/ Stable. Further, the ratings of Commercial Papers and Short-Term Bank Facilities were reaffirmed as CRISIL

A1+ and Perpetual Debt Instruments were reaffirmed as CRISIL AA+/Stable.

In October 2024 and March . 2025, CARE Ratings reaffirmed the rating assigned to bank facilities and long-term debt instruments. Ratings of long-term Bank Facilities, Non-Convertible Debentures and Subordinated Debt were reaffirmed at CARE AAA; Stable, and the ratings of Market Linked Debentures were reaffirmed at CARE PP-MLD AAA; Stable. Ratings of Perpetual Debt were reaffirmed at CARE AA+ ; Stable. The ratings assigned to Short-Term Bank facilities and Commercial Paper were reaffirmed at ‘CARE A1+. Further in March . 2025, CARE Ratings has assigned CARE AAA; Stable ratings for the NonConvertible Debentures.

In November 2024, Acuite Ratings and Research Limited also reaffirmed the long-term rating assigned to Non-Convertible Debentures as ‘ACUITE AAA/ Stable.

In February 2025, Brickwork Ratings assigned and upgraded the ratings for the Non-Convertible Debentures to ‘BWR AAA/Stable. Further, the rating of Subordinated Debt was also upgraded to BWR AAA/Stable.

A summary of outstanding ratings as on March . 31, 2025, is presented below:

Rating Agency	Instrument/Facility	Outstanding Rating
CRISIL	Non-Convertible Debentures	CRISIL AAA / Stable
	Long Term Bank facilities	CRISIL AAA / Stable
	Subordinated Debt	CRISIL AAA / Stable
	Perpetual Debt	CRISIL AA+/Stable
	Commercial Paper / Short Term Bank Facilities	CRISIL A1 +
CARE Ratings	Non-Convertible Debentures	CARE AAA; Stable
	Long Term Bank facilities	CARE AAA; Stable
	Market Linked Debentures (MLD)	CARE PP-MLD AAA; Stable
	Subordinate Debt	CARE AAA; Stable
	Perpetual Debt	CARE AA+ ; Stable
	Commercial Paper/ Short Term Bank Facilities	CARE A1+
Acuite	Non-Convertible Debentures	ACUITE AAA / Stable
Brickwork Ratings	Non-Convertible Debentures	BWR AAA / Stable
	Sub Debt	BWR AAA / Stable

‘AAA rating indicates highest degree of safety regarding timely servicing of financial obligations and lowest credit risk. ‘AA+ rating indicates a high degree of safety regarding timely servicing of financial obligations and very low credit risk.

A status of ratings assigned by rating agencies and migration of ratings during the year are provided in notes to the standalone financial statements.

PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR:

The Company, being an NBFC registered with the 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 of the Act with respect to loans. Accordingly, the disclosures of the loans given as required under the aforesaid section have not been made in this Boards Report.

Particulars of loans and investments outstanding during the financial year are furnished in notes to the standalone financial statements of the Company.

Further, the Company has not provided any Loans to Directors, Senior Officers and Relatives of Directors as per Para 40 of RBI Scale Based Regulations.

RISK MANAGEMENT:

The Risk Management Committee presently comprises of Mr. Bontha Prasada Rao who serves as the Chairman of the Committee; and Mr. Arvind Kapil, Mr. Sunil Samdani, Mr. Sanjay Kumar, Mr. Rajeev Sardana and Ms. Sonal Modi, as its other members.

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 17(9) of the SEBI Listing Regulations. Managing risk is fundamental to financial services industry and it is key to ensure sustained profitability and stability. In a rapidly changing economic, geopolitical, regulatory and financial environment, your Company has continued to leverage on their strong risk management capabilities.

The Risk Management Committee functions in line with RBI Scale Based Regulations and SEBI Listing Regulations. The Risk Management Committee, met five (5) times during the year. Meeting details, terms of reference, and its functioning are set out in the Corporate Governance Report.

The Company understands that risk evaluation and risk mitigation is a function of the Board of the Company, and the Board of Directors are fully committed to developing a sound system for identification and mitigation of applicable risks viz., systemic, and non-systemic. Information on the development and implementation of a Risk Management Policy for the Company is given in the Management Discussion and Analysis. The Board is of the opinion that there are no elements of risk that may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL:

The Management has laid down a set of standards, processes and structure which enables it to implement internal financial controls across the organization with reference to financial statements and such controls are adequate and are operating effectively. Internal Finance control framework has been established in line with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the ‘Guidance Note).

During FY 2024-25, testing was conducted based on process walkthrough and review of samples as per documented controls in the Risk and Control matrix. Testing was done for each of the controls confirming the existence and operating effectiveness of controls over financial reporting. The review was performed on design, adequacy and operating effectiveness of the controls.

The internal financial control is supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements, its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses. The Audit Committee also monitors the implemented suggestions. The Company has, in all material respects, adequate internal financial control over financial reporting and such controls are operating effectively.

The Joint Statutory Auditors of the Company have also certified the existence and operating effectiveness of the internal financial controls relating to financial reporting as of March . 31, 2025. During the year

under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company promotes ethical behavior in all its business activities and is in line with the best governance practices. The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by the Board of Directors of the Company pursuant to Section 177(9) of the Act read with Regulation 4(2)(d)(iv) and 22 of the SEBI Listing Regulations and Regulation 9A(6) of the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has in place a vigil mechanism named ‘Breach of Integrity and Whistle Blower/Vigil Mechanism Policy to provide a formal mechanism to the directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Business Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail the mechanism and provides for direct access to the Chairman of the Audit Committee in appropriate and exceptional circumstances. A quarterly and annual report on the whistle-blower complaints, as received, is placed before the Audit Committee for its review.

The details of the said Policy is explained in the Corporate Governance Report and is available on the website of the Company at https://poonawallafincorp. com/documents/20121/0/Breach-of-Integ rity- and-Whistle-Blower-Vigil-Mechanism-Policy. pdf/9a6df317-9c89-59d2-b11c-64e10bd753cc

COMPLIANCE MANAGEMENT:

The Company has in place a comprehensive compliance management tool, which is devised to ensure compliance with all applicable laws. Automated alerts are sent to compliance owners to ensure compliance within stipulated timelines.

HUMAN RESOURCES:

Your Company firmly believes that employees are its greatest asset. By orchestrating successful change management initiatives aligned with the Companys Vision and Mission, the Human Resources (HR) department has been pivotal in driving organizational success through a series of transformative efforts. By prioritizing innovation and efficiency, HR integrated strategic automation and Artificial Intelligence (AI) into core functions. Key initiatives included the launch of the MDs Honour to celebrate exemplary contributions, the introduction of flexible work hours, and AI-driven hiring processes

that increased offer capacity. Additionally, continuous learning and leadership development programs, such as the "Prarambh" induction program and the "SkillUp" digital learning platform, have ensured that employees are well-equipped to meet future challenges. These efforts have collectively elevated the employee experience, built a robust, tech-enabled HR ecosystem, and positioned your Company as a leader in HR innovation and excellence.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a ‘Policy for Prevention of Sexual Harassment to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment, in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the rules thereunder ("POSH Act"). The Company has complied with the provisions relating to the constitution and composition of the Internal Committee under the POSH Act.

During the year under review, no case of sexual harassment was reported to the Internal Committee ("IC"). To build awareness and appreciation of this area, your Company has implemented an online knowledge module leveraging our learning management system. Your Company continue to strive harder with each passing year to ensure our organization succeed in bringing the best out of our people and enable the organization to create value for its Shareholders and Employees.

INFORMATION TECHNOLOGY:

The technological advancement in your Company has resulted in multi-fold growth in the digital led business. There is a significant growth in API based end-to-end digital lending through Mobile App, Digital DSAs partners.

Your Companys Information Technology guiding principles are:

(a) Offer Best-in-Class Customer Experience across channels

(b) Ensure "Robust & Scalable" Technology Infrastructure witRs. 24x7 availability

(c)Increase Productivity & Profit using Digital First, Technology-driven approach

Your Companys primary focus areas for Information Technology include superior customer experience, technology upgrade, new products/services, innovations, productivity/process improvements, digital acquisition, and data science/analytics with an overall focus on observability to ensure resilience.

Your Company has launched a web & mobile app with various features such as instant personal loan, loan servicing etc. Customers can now avail an instant personal loan in just 15 minutes by completing the end-to-end digital process. Business processes have been re-aligned as per industry-best practices thus enabling end-to-end automation of each process. Your Company has also launched instant personal loan on WhatsApp. Your Company also launched new website which enables efficient lead generation through search engine optimization, customer acquisition, user centric design and content management framework to enable faster feature launches on website.

Your Company launched the industry first straight through education loan, commercial vehicle loan, shopkeeper loan, gold loan, consumer durables, EMIC Personal Loan Top-up loan has been launched. Our digital stack has enabled us to launch personal loans through partners while we enabling us create a framework to launch more partners in the next quarter.

We are focused on adopting AI across the organization in different functions across HR and credit risk. Further used cases are being built across departments within the organizations.

We continue to build on our secure API stack with a future proof strategy exposing the APIs for easy consumption by our systems and external partners. Our Data Lake architecture enables detailed journey tracking, one customer view, efficient reporting.

Your Company has invested in various new technologies like Digital Experience Platform, AI based customer engagement and communications, personalization, Digital Collections Platform, etc. Your Company has also set up an IT Command Center for 24x7 monitoring of IT Infrastructure, Applications and Digital Services. Your Company is also implementing Enterprise Data Lake platform, which will enable use of multiple AI based algorithm for generating various kinds of reports, MIS, and Dashboards. Use of analytics will enhance customer penetration through digital platform by providing various insights at data level.

CORPORATE IMAGE BUILDING & ENGAGING TARGET AUDIENCE:

Some of the key initiatives undertaken by the Company during the year are:

Public Relations and External Communication:

Your Company has effectively leveraged Public Relations (PR) to build awareness and strengthen its positive image among the stakeholders. Through PR, the Company has communicated its commitment to simplifying lending, creating customer delight, and enhancing experiences, which remain its top priorities. PR initiatives were designed to deliver messages that reflect these values and reinforce the companys governance-first, risk-first, and customer- first approach.

Building on this foundation, PR has also played an important role in communicating the journey towards becoming the smartest Company, emphasizing technologys role in creating a competitive edge. Key differentiators of the Company such as leveraging AI, building digital journeys, and using risk analytics were highlighted through focused media outreach, including announcements on the four-year collaboration with I IT for AI initiatives, the launch of 24/7 digital journey for salaried professionals, Al-powered HR and underwriting solutions. These developments were strategically communicated through press release dissemination and high-impact media engagements with top-tier media outlets.

In addition to showcasing the technological transformation, strategic PR efforts were undertaken through extensive media outreach to enhance awareness and increase visibility for your companys six groundbreaking product launches, announced in March and April 2025: PL Prime Digital 24x7, Education Loan, Commercial Vehicle Loan, Shopkeeper Loan, Gold Loan, and Consumer Durable Loan.

Press releases issued for these launches delivered key messages across targeted markets, emphasizing digital innovation, portfolio expansion, geographic expansion, governance-first and risk-first approach, transparency, and cross-selling potential across various products. These developments received strong media coverage, with stories appearing in top- tier English and regional media outlets.

AWARDS AND RECOGNITIONS:

Your Company received accolades in the following field during the year under reviewAwards & Campaign Performance Highlights - FY 2024-25:

CORPORATE EXCELLENCE:

Outstanding Contribution to Financial Inclusion ASSOCHAM India Fintech & BFSI Summit 2025:

This honour was conferred in recognition of our efforts to deepen credit access in underserved Tier-2/Tier- 3 markets through a balanced phygital distribution model and AI driven onboarding.

Most Impactful NBFCs 2025:

Awarded at the NBFC Transformation Conclave by VERINT. Recognised for excellence in digital transformation and commitment to enabling financial dreams.

Express BFSI Technology Award 2025:

Awarded for PL Prime 24x7 -Customer Experience. Tech-enabled loan servicing platform for personalised journeys.

GOVERNANCE AND RISK MANAGEMENT:

Leadership in Governance Excellence Governance Now Awards 2025

Awarded for our strong governance practices, board diversity, transparent disclosures, and alignment with stakeholder expectations.

Best Risk Management Framework - NBFC Sector

Indian Risk Management Awards 2025

Acknowledging our implementation of robust, technology-enabled risk monitoring tools and our proactive approach to managing credit, fraud, and operational risks.

TECHNOLOGY AND INNOVATION:

Innovation in AI and Data Analytics FinTech India Innovation Awards 2025

Awarded for our use of advanced analytics, predictive modelling, and machine learning algorithms to improve customer profiling, underwriting precision, and collections efficiency.

MARKETING:

DIGIXX Summit Awards -Adgully

Awarded for Best Festive Marketing DVC Recognised for the multi-platform festive campaign - Sapno Ka Celebration.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has a comprehensive Corporate Social Responsibility ("CSR") Policy outlining programs, projects and activities that your Company undertakes to create a significant positive impact on disadvantaged section of the society. All these programs fall within the purview of Section 135 read with Schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"). Your Company has undertaken socially impactful CSR Projects during the year under review. Your Company has partnered with implementing agencies to implement projects in the CSR focus area viz., Healthcare, Education and Sports.

During the financial year 2024-25, your Company was required to spend RS.10.46 Crore under CSR as enumerated in Section 135(5) of the Act. Your Company has spent an amount of RS.10.51 Crore on CSR activities. The Annual Report on CSR activities covering details pertaining to CSR Policy developed and implemented by the Company, CSR Projects undertaken during the year, CSR committee and meeting details is annexed herewith and marked as Annexure-1. Further, in terms of the CSR Rules, the Chief Financial Officer has certified that the funds disbursed have been utilized for the purpose and in the manner approved by the CSR Committee and the Board of Directors of your Company.

CUSTOMER RELATIONSHIP MANAGEMENT:

Aligned with our vision to become the most trusted financial services brand and our philosophy of customer first approach, customer service remains central to our operations and receives significant attention from management. The Company upholds values of ethics, integrity, good governance, professionalism, transparency, and customer satisfaction. Special focus has been on the quality and consistency of service delivery.

Your Company is committed to gauge customer feedback as a true reflection of its service levels. Valuable customer insights at each stage of relationship with the Company has been the guiding factor to continuously improve and digitize its processes and service delivery. Our Net Promoter Score (NPS) - a key indicator of customer perception and brand loyalty is used to gauge customer feedback on our product, processes & service level. Introducing Digital NPS through link based survey trigger allowed us to increase the coverage to gather timely feedback and make necessary improvements. Your Company is actively addresses customer insights and identified opportunities for process improvement as part of our ongoing commitment to continuous enhancement.

Our customers have multiple options like dedicated toll-free number, dedicated email ids, branches, social media accounts to reach us for their query, requests or grievances.

Your Company has enabled robust self-service platforms like mobile application, WhatsApp Bot, Web-bot and Smart IVR for instant servicing, which is available 24x7, enhancing customer convenience.

The following key initiatives were undertaken to enhance Customer Service and Experience in FY 2024-25:

1) To streamline customer interactions and improve efficiency, your Company has launched the Email Bot & Voice Bot.

•Email BOT enables quick response to customer queries on email through instant categorization, prioritization and draft response templates.

•Voice BOT now proactively engages with customers, providing important loan details through welcome call. The BOT is also being used for other service campaigns to reach out to our customers.

2) We have launched our new SMART IVR (Interactive Voice Response) system with improved customer experience. With automated authentication, critical loan details are now voiced out upfront to the customers. The IVR now provides menu options for instant servicing via an automated process along with efficient call routing to agents.

3) Mobile APP is enhanced with service stack to include Chat Bot for interactive assistance to customers. Straight through journeys have been enabled on the App for instant servicing.

Transparency

• Effective communications on confirmation of repayment mandate registration.

• Ensure recorded interactions with customers for future reference and adequate quality checks.

• Proactive issuance of NOC/NDC (No-Object Certificate/No-Due Certificate) to customers.

• Enabled payment via QR code for branch walk in customers for real time payment updates.

Handling Grievances effectively

• Proactive acknowledgment to customers via auto E-mail and SMS trigger upon receipt of any complaint.

• A detailed Root Cause Analysis (RCA) carried out for each complaint.

•All critical cases including regulatory escalation are reviewed by Principal Nodal Officer and Chief Compliance Officer.

•Close looping feedback mechanism ensures customers are out called at the time of closure of the Service Request for customer concurrence on the resolution being provided and upon closure in system the same is backed by an SMS trigger for customers reference.

•All Partially/Wholly Rejected complaints (subject to exclusions as per Regulatory Circular) are reviewed by the Internal Ombudsman of the Company and the final decision is communicated to the customer within the regulatory timelines.

•Necessary governance mechanism is in place for any case of violation of code of conduct while dealing with customer.

•Regular trainings for frontline officials and agents are conducted for upkeep of customer experience.

•Post analysis of complaint trends and gap identification, different initiatives are taken to ensure preventive actions leading to seamless experience.

DIRECTORS AND KEY MANAGERIAL

PERSONNEL:

a.Board Composition

The composition of the Board of Directors of the Company is governed by the Act and Regulation 17 of the SEBI Listing Regulations and is in conformity with the same. As on the date of this Report, the Board of Directors comprised a combination of Ten Directors viz. Mr. Adar Cyrus Poonawalla, Chairman, Non-Executive Director, Mr. Arvind Kapil, Managing Director and Chief Executive Officer, Mr. Sunil Samdani, Executive Director, Ms. Sonal Modi, Non-Executive Director, and Mr. Bontha Prasada Rao, Mr. Prabhakar Dalal, Mr. Sanjay Kumar, Ms. Kemisha Soni, Mr. Kewal Handa and Mr. Rajeev Sardana are Non-Executive Independent Directors. The Board mix provides a combination of professionalism, knowledge and experience required in the NBFC sector. The details of skills possessed by each director have been provided in detail in the Corporate Governance report.

b.Change in composition of the Board during the year

Appointment/Re-appointment:

During the year, the Board of Directors ("Board") of the Company had approved the appointment of Mr. Arvind Kapil (DIN: 10429289) as a Managing Director & Chief Executive Officer of the Company, for a period of 5 (Five) years effective from June 10, 2024 and thereafter the Members of the Company approved his appointment in the Annual General Meeting held on July 23, 2024.

Ms. Sonal Modi (DIN: 03403571) was appointed as a Non-Executive, Non-Independent Director of the Company, liable to retire by rotation, effective from August 16, 2024, thereafter, the Members of the Company approved her appointment by way of Postal Ballot on November 04, 2024.

Mr. Kewal Handa (DIN : 00056826 ) was appointed as a Non-Executive Independent Director of the Company, for a period of 3 (Three) years effective from October 01, 2024, thereafter, the Members of the Company approved his appointment by way of Postal Ballot dated November 04, 2024. In the opinion of the Board, Mr. Kewal Handa is independent of the management of the Company and fulfils the conditions specified in the Act and SEBI Listing Regulations, RBI Scale Based Regulations for appointment as a NonExecutive Independent Director and possess the requisite skills and capabilities and hold highest standards of integrity. The Board is of the view that Mr. Kewal Handas continuation on the Board of the Company as an Independent Director even after attaining the age of 75 years as on August 22, 2027 will be in the interest of the Company.

The Board of Directors, at its meeting held on December 18, 2024, approved

the re-appointment of Mr. Sanjay Kumar (DIN: 09466542) as a Non-Executive Independent Director of the Company for a period of three years, effective from January 15, 2025. Thereafter, the Members of the Company approved his re-appointment at the Extraordinary General Meeting held on January 09, 2025.

The Board of Directors on December 18, 2024 has approved the appointment of Mr. Rajeev Sardana (DIN: 06648276) as a Non-Executive Independent Director of the Company, for a period of 3 (Three) years effective from December 18, 2024, thereafter, the Members of the Company approved his appointment in the Extraordinary General Meeting held on January 09, 2025. In the opinion of the Board, Mr. Rajeev Sardana is independent of the management of the Company and fulfils the conditions specified in the Act and SEBI Listing Regulations, RBI Scale Based Regulations for appointment as a Non-

Executive Independent Director and possess the requisite skills and capabilities and hold highest standards of integrity.

The terms and conditions of appointment of Independent Directors are available on the website of the Company at https:// poonawallafincorp.com/investor-governance.

Cessation:

During the year under review Mr. Sajid Fazalbhoy (DIN: 00022760), Non-Executive Director, stepped down from the Board with effect from June 01, 2024 due to other professional commitments.

Mr. Abhay Bhutada (DIN: 03330542), took early retirement as Managing Director of the Company w.e.f. June 09, 2024 and continued as Non-Executive Director thereafter. He also, took retirement as Non Executive Director due to preoccupation at strategic level with Cyrus Poonawalla Group w. e. f. August 03, 2024.

Mr. Amar Deshpande (DIN:07425556) has tendered his resignation as a Non-Executive Director of the Company, with effect from August 30, 2024, due to his pre-occupation and other professional commitments.

Mr. Atul Kumar Gupta (DIN: 01052730),

Independent Director, has stepped down from close of business hours on December 09, 2024 due to various pre-occupation.

The Board of Directors of your Company placed on record their appreciation for the contribution made by Mr. Sajid Fazalbhoy, Mr. Abhay Bhutada, Mr. Amar Deshpande and Mr. Atul Kumar Gupta during their tenure as directors on the Board of the Company.

c. Retirement by Rotation:

I n accordance with the provisions of Section 152 of the Act read with Articles of Association of the Company, Mr. Sunil Samdani (DIN: 10301175), Executive Director retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. The Board of Directors of your Company recommends the re-appointment of the Director liable to retire by rotation at the ensuing AGM. Appropriate resolution seeking your approval for the aforesaid re-appointment along with brief profile of the said Director is forming part of the Notice convening the 45th AGM of your Company.

d. Declaration from Directors

The Company has, inter alia, received the following declarations from all the Independent Directors confirming that:

a. they meet the criteria of independence as prescribed under the provisions of the Act, read with Schedule IV and Rules issued thereunder, and the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company;

b. they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and

c. they have registered themselves with the Independent Directors Database maintained by the Indian Institute of Corporate Affairs and have qualified the online proficiency selfassessment test or are exempted from passing the test as required in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

The Board of Directors of the Company has taken on record the declaration and confirmation submitted by the Independent Directors.

All members of the Board of Directors and Senior Management have affirmed compliance with the Code of Conduct for Board and Senior Management for the FY 2024-25.

None of the Director of the Company are disqualified from being appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) or are debarred or disqualified by the Securities and Exchange Board of India ("SEBI"), Ministry of Corporate Affairs ("MCA") or any other such statutory authority.

In the opinion of the Board, the Independent Directors possess the requisite integrity, experience, expertise, and proficiency required under applicable laws and the policies of the Company.

During the year under review, a separate meeting of the Independent Directors was held on January 24, 2025.

During the year under review, the Non-Executive relationship or transactions with the Company, other than sitting fees and commission, as applicable, received by them.

The Company had obtained certificates from Practicing Company Secretaries confirming that:

• None of the Directors on the Board of the Company has been debarred or disqualified from being appointed and/or continuing as Directors by the SEBI/MCA or any other such statutory authority.

e. Fit and Proper Policy:

The Company adheres to the process and methodology prescribed by the RBI in respect of the ‘Fit & Proper criteria as applicable to NBFCs, signing of Deeds of Covenants which re-affirms that the directors are required to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible for being appointed/re-appointed as a director of the Company.

All the Directors of the Company have confirmed that they satisfy the "fit and proper" criteria as prescribed in Chapter XI of RBI Scale Based Regulations and that they are not disqualified from being appointed/continuing as directors in terms of Section 164(2) of the Act. The prescribed declarations/undertakings given by the Directors were placed before the Nomination and Remuneration Committee for its review and noting.

f. Familiarization Program for Independent Directors:

In compliance with the requirement of Regulation 25 of SEBI Listing Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them about the Company and their roles, rights, responsibilities in the Company. The details of the familiarization program along with the number of hours spent by each of the Independent Directors during the FY2024-25 are explained in the Corporate Governance Report. The same is also available on the website of the Company at https:// poonawallafincorp.com/documents/20121/0/ Draft-Familiarization-program-FY24-25- upload-ve rsion.pdf/4e4f7bb0-a682-9f19-7655- a9643e22b4b2.

g. Performance Evaluation:

The Board conducted the performance evaluation of the individual Directors, Board Committees, Board as a whole and the Chairman of the Board in accordance with the provisions of the Act and the SEBI Listing Regulations, including the Guidance Note on Board Evaluation issued by SEBI.

The Board evaluated the effectiveness of its functioning and that of the Committees and of individual Directors by seeking their inputs on various aspects of Board/Committee Governance through structured questionnaire. Also, the Nomination and Remuneration Committee has carried out evaluation of every directors performance and reviewed the self-evaluation report submitted by the respective directors. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the director being evaluated.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfilment of directors obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings. Also, the Nomination and Remuneration Committee has carried out an evaluation of every Directors performance and reviewed the self-evaluation submitted by the respective Directors. These meetings were intended to obtain Directors inputs on the effectiveness of Board/Committee processes.

The evaluations are carried out in a confidential manner and the Directors provide their feedback by rating based on various metrics.

The Board considered and discussed the input received from the Directors. Further, the Independent Directors at their meeting reviewed the performance and role of NonIndependent Directors and the Board as a whole and Chairperson of the Company and had also assessed the quality, quantity, and timeliness of flow of information between the Company management and the Board that was necessary for the Board to perform their duties effectively and reasonably.

h. Outcome of evaluation process:

Based on inputs received from the board members, it emerged that the overall performance evaluation of the Board, composition, and quality, understanding the business including risks, process and procedures, oversight of financial reporting process including internal controls and audit functions, ethics and compliances and monitoring activities, has been found to be reasonably good. Similarly, the effectiveness of the Board Committees has been rated high. The Committees of the Board function effectively. Sufficient time is allotted for discussion of the agendas. Contrary views were also encouraged and the same were viewed in the right perspective. The performance of the Chairman of the Company has been found to be Excellent and was rated 5 within the overall rating scale of 1 to 5. Overall, the Board is functioning very well in a cohesive and interactive manner. Last year the recommendations of Independent Directors and Board on Performance Evaluation were largely implemented.

i. Remuneration Policy:

The Remuneration Policy for Directors, Key Managerial Personnel ("KMP"), Senior Management Personnel and all other employees is aligned to the philosophy on the commitment of fostering a culture of leadership with trust. The Remuneration Policy aims to ensure that the level and composition of the remuneration of the Directors, KMPs, SMPs and all other employees is reasonable and sufficient to attract, retain and motivate them to successfully run the Company. The salient features of the Remuneration Policy are stated in the Corporate Governance Report. The Remuneration Policy of the Company is available on the Companys website at https://poonawallafincorp.com/ documents/20121/0/PFL-Remuneration-Policv- Version-No-8.0.pdf/0b67101a-0143-22da-31ae- 597eb8e47056.

The Remuneration details of Directors and KMP are provided in the Corporate Governance Report.

j. Code of Conduct for Directors and Employees:

The Company has adopted a Code of Conduct for its Directors and employees including a Code of Conduct for Independent Directors which suitably incorporates the duties of Independent Directors as laid down in the Act. The said Codes can be accessed on the Companys website at https:// poonawallafincorp.com/documents/20121/0/ PFL-Code-for-Independent-Directors. pdf/532e85bb-fac8-a77a-36ed-065de305659c.

In terms of the SEBI Listing Regulations, all directors and Senior Management Personnel

have affirmed compliance with their respective codes. The Managing Director and Chief Executive Officer has also confirmed and certified the same, for which certification is provided at the end of the Report on Corporate Governance.

k. Key Managerial Personnel:

In terms of Section 203 of the Act, the following are the Key Managerial Personnel ("KMP") of the Company as on the date of this report:

1. Mr. Arvind Kapil, Managing Director & Chief Executive Officer;

2. Mr. Sunil Samdani, Executive Director;

3. Mr. Sanjay Miranka, Chief Financial Officer; and

4. Ms. Shabnum Zaman, Company Secretary.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of our knowledge and belief, your directors make the following statements in terms of Section 134 (5) of the Act:

a. that in the preparation of the annual accounts for the year ended March . 31, 2025, the applicable Ind AS have been followed along with proper explanation relating to material departures, if any;

b. t hat such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgement and estimates have been made that are 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 loss of the Company for the year ended on that date;

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

d. that the annual accounts have been prepared on a going concern basis;

e. that proper internal financial controls are in place and that the financial controls are adequate and are operating effectively; and

f. that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively.

MEETINGS:

During the year under review, 10 (Ten) Board Meetings and 6 (Six) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act and the SEBI Listing Regulations.

COMMITTEES OF THE BOARD OF DIRECTORS:

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The Board Committees have been constituted to deal with specific areas/ activities as mandated by applicable laws, rules and regulations or as delegated by the Board, which need a closer review.

Audit Committee

The Audit Committee presently comprises of Mr. Kewal Handa who serves as the Chairman of the Committee and Ms. Sonal Modi, Mr. Prabhakar Dalal, Mr. Sanjay Kumar, and Ms. Kemisha Soni as other members. The terms of reference for the Audit Committee have been furnished in the Corporate Governance Report. All the recommendations made by the Audit Committee during the year were accepted by the Board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee ("NRC") presently comprises of Mr. Prabhakar Dalal who serves as the Chairman of the Committee, Mr. Kewal Handa, Mr. Rajeev Sardana, and Ms. Sonal Modi as other members. The terms of reference of the Nomination and Remuneration Committee and details of NRC Meetings and attendance thereof have been furnished in the Corporate Governance Report.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee presently comprises of Mr. Prabhakar Dalal who serves as the Chairman of the Committee, Mr. Sunil Samdani, Ms. Sonal Modi, and Mr. Sanjay Kumar as other members. The terms of reference of the Stakeholders Relationship Committee have been furnished in the Corporate Governance Report.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee presently comprises of Ms. Kemisha Soni who serves as the Chairperson of the Committee and Mr. Sunil Samdani, Ms. Sonal Modi, and Mr. Prabhakar Dalal, as other members.

The other Committees of the Board are the Asset Liability Management Committee, Risk Management Committee, IT Strategy Committee, Review Committee, Customer Service Committee and the Management Committee. The details of composition, terms of reference and number of meetings held for the respective Committees have been furnished in the Corporate Governance Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has in place a Policy on Related Party Transactions and the same can be accessed on the Companys website at https://poonawallafincorp.com/documents/20121/0/ Policv+on+Related+Partv+Transaction.pdf/dcabc2aa- 14da-673a-b8af-bcb22ccfdc97. All transactions with Related Parties are placed before the Audit Committee for approval. All related party transactions that were entered into during the financial year were on an arms length basis and in the ordinary course of business, the particulars of such transactions are disclosed in the notes to the financial statements. During the year under review there were no materially significant related party transactions. Disclosures of related party transactions of the Company with the promoter/promoter group, which holds 10% or more shareholding in the Company, if any, is given in note to the standalone financial statements.

None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2024-25. Form No. AOC-2 is attached with this Report as Annexure-2.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

During the year under review there were no significant material orders passed by the Regulators/Courts/ Tribunals against the Company which would impact the going concern status or its future operations.

STATUTORY AUDITORS:

Based on the recommendation of the Audit Committee and the Board, the Members of the Company, at the 44th AGM held on July 23, 2024, approved the appointment of M S K A & Associates, Chartered Accountants, (Firm Registration No. 105047W), as Joint Statutory Auditors of the Company, to hold office from the conclusion of the 44th AGM until the conclusion of the 47th AGM of the Company.

Based on the recommendation of the Audit Committee and the Board, the Members of the Company, at the 43rd AGM held on July 25, 2023, approved the appointment of Kirtane & Pandit LLP, Chartered Accountants, (Firm Registration No.105215W/W100057), as Joint Statutory Auditors of the Company, to hold office from the conclusion of the 43rd AGM until the conclusion of the 46th AGM of the Company.

In terms of the RBI Circular No. RBI/2021-22/25 Ref. No. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 on Guidelines for Appointment of Statutory Central Auditors ("SCAs")/Statutory Auditors ("SAs") of Commercial Banks (excluding Regional Rural Banks), Urban Co-operative Banks ("UCBs") and Non-Banking Financial Companies ("NBFCs") (including Housing Finance Companies) ("RBI Guidelines"), the statutory audit of the entities having asset size of RS.15,000 crore and above as at the end of previous year, should be conducted under the joint audit of a minimum of two audit firms. and in accordance with the requirements of Section 139 of the Act, read with Rules made thereunder, M S K A & Associates, Chartered Accountants and Kirtane & Pandit LLP, Chartered Accountants, act as the Joint Statutory Auditors of the Company.

As required under Regulation 33(1)(d) of the SEBI Listing Regulations, the Joint Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India ("ICAI") and that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Standalone and the Consolidated Financial Statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind - AS) notified under Section 133 of the Act. The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments.

There are no qualifications, reservations or adverse remarks or disclaimers made by and M S K A & Associates, Chartered Accountants, and Kirtane & Pandit LLP, Chartered Accountants, Joint Statutory Auditors, in their Reports dated April 25, 2025 on the Financial Statements of the Company for FY 2024-25.

SECRETARIAL AUDITOR:

Pursuant to the provision of Section 204(1) of the Act & Rule 9 of the Companies (Appointment and Remuneration of Personnel) Rules, 2014 and other applicable provisions, if any of the Act and Regulation 24A of the SEBI Listing Regulations read with circulars issued thereunder to the extent applicable, other applicable regulations framed by the Securities and Exchange Board of India in this regard, the Secretarial auditor needs to be appointed for a period of 5 (Five) years.

In view of the above, the Board of Directors have appointed SIUT & Co LLP, Company Secretaries (Firm Registration No.: L2021MRS.011500) as Secretarial Auditor of the Company for a period of five (5) years

i.e. from FY 2025-26 to FY 2029-30 subject to the approval of Members at the ensuing AGM of the Company, to undertake secretarial audit as required under the Act and SEBI Listing Regulations and issue the necessary secretarial audit report for the aforesaid period.

SIUT & Co LLP have confirmed that their appointment, if made, will comply with the eligibility criteria in terms of SEBI Listing Regulations. Further, the Secretarial Auditor has confirmed that they have subjected themselves to Peer Review process by the Institute of Company Secretaries of India ("ICSI") and hold valid certificate issued by the Peer Review Board of ICSI.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed SIUT & Co LLP, Company Secretaries (Firm Registration No. L2021MRS.011500) to conduct the Secretarial Audit for the FY 2024-25. The Secretarial Audit Report does not contain any qualification, reservation and adverse remark. The Secretarial Audit Report in Form MR-3 for the financial year ended March . 31, 2025, is annexed herewith and marked as Annexure-3.

COST AUDITORS:

Being an NBFC, maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable in respect of the business activities carried out by the Company.

SECRETARIAL STANDARDS:

TThe mandatorily applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings respectively, have been duly complied by your Company.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Environment, Social and Governance Practices ("ESG") is a critical area of focus. Your Company has constituted ESG Committee and adopted the Environmental and Social Governance Policy & Governance Framework. As a responsible organization your Company takes various measures to mitigate our negative impact on the environment, ensure our conduct is responsible towards our internal and external stakeholders and invest in good governance practices. Our various efforts towards responding to the stakeholder needs and concerns are addressed in the business responsibility and sustainability report ("BRSR"), covering the nine principles of National Guidelines on Responsible Business Conduct (NGRBC).

The BRSR provides an avenue for disclosing an overview of the entitys material ESG risks and opportunities, goals and targets related to sustainability and performance against them. As per Regulation 34 of the SEBI Listing Regulations, BRSR for FY 2024-25 forms part of this Report.

RBI GUIDELINES:

The Company continues to fulfil all the norms and standards laid down by RBI pertaining to nonperforming assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norm of 15%, On a standalone basis, the Capital Risk Adequacy Ratio ("CRAR") as of March . 31, 2025, was 22.94% against the RBI stipulated norm of 15%. In line with the RBI guidelines for Asset Liability Management (ALM) system for NBFCs, the Company has an Asset Liability Management Committee, which meets quarterly to review its ALM risks and opportunities.

The Company continues to be in compliance with the RBI Scale Based Regulations.

CORPORATE GOVERNANCE:

The Company is committed to achieving and adhering to the highest standard of Corporate Governance. It believes in and practices good corporate governance. The Company maintains transparency and also enhances corporate accountability. In terms of Regulation 34 of SEBI Listing Regulations read with Schedule V, the following forms part of this Report and as required under the RBI Scale Based Regulations, forms part of this Annual Report. Further, the additional disclosure requirements for NBFCs in accordance with the aforesaid RBI Directions forms part of the Corporate Governance Report.:

a. Declaration signed by the Managing Director & Chief Executive Officer regarding compliance to Code of Conduct by the Board Members and Senior Management Personnel;

b. A certificate from a Practicing Company Secretary that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of Companies by the Board/Ministry of Corporate Affairs or any such statutory authority;

c. Report on the Corporate Governance; and

d. Practicing Company Secretarys certificate regarding compliance of conditions of Corporate Governance.

Conservation of Energy

The operations of the Company are not energy intensive. The Company implements various energy conservation measures across all its functions, which are highlighted in the Business Responsibility and Sustainability Report.

Technology Absorption

The details pertaining to technology absorption at the Company (usage of digital and data analytics to build sustainable competitive advantage) have been explained in this Report. Considering the nature of services and businesses, no specific amount of expenditure is earmarked for Research and Development. However, the Company on an ongoing basis strives for various improvements in the products, platforms, and processes.

Foreign Exchange Earnings and Outgo

During FY 25, there were no foreign exchange earnings (previous year: NIL) and the foreign exchange outgo in terms of actual outflow amounted to RS.3.71 Crore (Rupees Three Crore Seventy One Lakh) (previous year: RS.0.64 Crore).

OTHER DISCLOSURES:

a. During the year, there was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) and any one-time settlement with any Bank or Financial Institution during the year under review and hence the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof are not applicable.

b. The Company has not defaulted in repayment of loans from Banks and Financial Institutions;

c. There were no delays or defaults in payment of interest/principle of any of its debt securities;

d. Disclosures pursuant to RBI Scale Based Regulations, unless provided in the Boards Report, form part of the notes to the standalone financial statements;

e. There was no raising of funds through Preferential Allotment, Rights Issues or Qualified Institutional Placements, etc.

f. The Company has not entered into any agreements as required to be disclosed under clause 5A of paragraph A of Part A of Schedule III of SEBI Listing Regulations.

ANNUAL RETURN:

Pursuant to Sections 92 and 134(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended, the Annual Return is available at the website of the Company at https://poonawallafincorp.com/investor-financials.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is disclosed in this report as an Annexure 4.

In terms of the proviso to Section 136(1) of the Act, the Report is being sent to all Members, excluding the statement with respect to employees employed throughout the year and employees employed for part of the year who were in receipt of remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. It is to be noted that the Boards Report is abridged to that extent and all other information as required under applicable law form part of this Report. The statement is available for inspection by any Member on request. Any Member interested in obtaining a copy of the said statement, may write an email to the Company Secretary at secretarial@poonawallafincorp.com

TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to Section 124(5) of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,

2016, (as amended from time to time) ("IEPF Rules") relevant amount, which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund ("IEPF"). During the year under review, your Company has transferred RS.609,579/- (Rupees Six Lakh Nine Thousand Five Hundred and Seventy Nine.) to IEPF Authority.

Pursuant to Section 124 (6) of the Act and read with Rule 6 of IEPF Rules all the underlying shares in respect of which dividends are not claimed/paid for the last seven consecutive years or more are liable to get transferred to the IEPF Authority. Accordingly, during the year under review 23,365 equity shares of face value of RS.2/- each, were transferred to IEPF Authority.

The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company and also the details of equity shares transferred to IEPF Authority on the Companys website (www. poonawallafincorp.com) and also on the Ministry of Corporate Affairs website (www.mca.gov.in).

FRAUD REPORTING:

During the year under review, neither the Joint Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee under Section 143 (12) of Act, any instances of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Boards Report.

APPRECIATION:

Your directors would like to record their appreciation of the hard work and commitment of the Companys employees and warmly acknowledge the unstinting support extended by its banks & financial institutions, shareholders and other stakeholders in contributing to the results. Your directors also express their gratitude for the guidance received from RBI, SEBI and other regulatory agencies.

For and on behalf of the Board
Arvind Kapil	Sunil Samdani
Managing Director and	Executive Director
Chief Executive Officer	DIN: 10301175
DIN: 10429289
Place: Mumbai	Place: Mumbai
Date: April 25, 2025	Date: April 25, 2025