Sakthi Finance Ltd Directors Report

To the Members,

Your Directors are pleased to present their Sixty Ninth Annual Report together with the audited financial statements of your Company for the year ended 31 March 2026.

1. FINANCIAL PERFORMANCE lakh)

particulars	2025-26	2024-25
Total Income (A)	21,089.53	21,520.41
Less : Finance Costs	12,601.99	11,984.00
other Expenditure	5,528.37	5,896.48
Depreciation, Amortization and } Impairment )	619.11	1,306.80
Total Expenses (B)	18,749.47	19,187.28
Profit before Exceptional Items and Taxes (A-B)	2,340.06	2,333.13
Exceptional Items	-	-
Profit before Tax	2,340.06	2,333.13
Less : Provision for Tax:
- Current Tax	402.62	748.81
- Deferred Tax	212.54	(80.83)
Profit after tax for the year	1,724.90	1,665.15
Balance of profit brought forward from earlier years	6,120.25	5,340.94
Profit available for Appropriation	7,845.15	7,006.09
Add : other Comprehensive Income / (Loss)	(24.49)	(35.16)
Appropriations:
- Dividend paid on Equity Shares (2025 & 2024)	517.65	517.65
- Transfer to Statutory Reserve	344.98	333.03
Balance carried forward to Balance Sheet	6,958.03	6,120.25

2. BUSINESS

During the financial year ended 31 March 2026, your company disbursed loans to the extent of 74,258 lakhs. The overall collection efficiency continues to be satisfactory. Your Directors hope to achieve better business disbursements and profitability during the current financial year.

3. change in nature of business, if any

During the year, there was no major change in the nature of business of your company.

4. Dividend

a. pREFERENCE SHARES

Your Directors have, at their meeting held on 10 March 2026, declared an interim dividend (including pro rata, wherever applicable) of 9 per share on 9 per cent Redeemable, Cumulative, Preference Shares of 100 each for the financial year ended 31 March 2026, amounting to 235.34 lakhs, after deduction of tax deducted at source of 6.09 lakhs.

b. EQUITY SHARES

Your Directors are pleased to recommend a dividend of 0.80 per equity share (8 per cent on the face value of equity shares of 10 each) for the year ended 31 March 2026 amounting to 517.65 lakh, subject to deduction of tax, wherever applicable. The Equity Dividend recommended by the Board of Directors for the financial year 2025-26, if approved by the members, will be recognized as a liability during the financial year 2026-27. The dividend recommended complies with the Reserve Bank of India (Non-Banking Financial Companies - Prudential Norms on Declaration of Dividends) Directions 2025, as amended.

c. As amended by the SEBI (Listing obligations and Disclosure Requirements) Regulations 2015, as amended ("Listing Regulations"), SEBI has dispensed with the provisions relating to issuance of payable-at- par warrants / cheques with effect from 19 November 2025. Accordingly, all the dividend payments shall be made only through electronic modes of payment approved by the Reserve Bank of India and no payment of dividends will be made through physical modes. The Members who have not registered or updated their bank account are requested to register / update their bank account details so that they receive the dividend amount in time. For further details, please refer to the Notes to Notice of the AGM.

d. TAX ON DIVIDEND

In accordance with the provisions of the Income-tax Act 2025 ("the IT Act"), the Company will make payment of dividend after deduction of tax at source ("TDS") as per the prescribed rates, to those shareholders whose names appear as beneficial owner/ member in the list of beneficial owners to be provided by National Securities Depository Limited / Central Depository Services (India) Limited in case of shares held in dematerialised form or in the Register of Members in case of shares held in physical form, as at the close of business hours on Saturday, 19 September 2026 (Record Date).

5. TRANSFER TO RESERVES

Your Company has transferred an amount of 344.98 lakhs to the Statutory Reserve, in compliance with Section 45-IC of the Reserve Bank of India ("RBI") Act 1934. Further, the Board of Directors of your Company has decided to retain the balance amount in the retained earnings of the Company.

6. CAPITAL ADEQUACY

The Capital to Risk Assets Ratio ("CRAR") of your Company as on 31 March 2026 stood at 20.45 per cent, which is well above the minimum regulatory requirement of 15 per cent cRAR prescribed by the Reserve Bank of India. Out of the above cRAR, Tier i and Tier ii capital stood at 16.73 per cent and 3.72 per cent respectively.

7. credit rating

The details of credit ratings obtained from the credit rating agency, ICRA Limited, are given in the Corporate Governance Report (Refer Annexure 3) which forms part of the Boards Report.

8. change in the capital

During the year, your company allotted 7,66,250 9 per cent Redeemable, cumulative, Preference Shares ("RCPS") of 100 each on 25 august 2025, consequently, the total paid-up share capital has increased from 8,625.74 Lakhs to 9,391.99 Lakhs consisting of 6,47,05,882 equity shares of 10 each and 29,21,400, 9 per cent RcPS of 100 each.

9. management discussion and analysis report

As required under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("Listing Regulations"), a report on Management Discussion and Analysis, which forms part of this report, is set out in Annexure 1.

10. rbi compliances

a. RBI Directions applicable to NBFCs

RBI has, on 28 November 2025, amended and issued several Master Directions ("MDs") applicable to NBFcs. Based on the Reserve Bank of India (Non-Banking Financial companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions 2025, your company has been classified as "NBFc-Middle Layer" ("ML"). Your company has complied with the various requirements specified under the NBFC Directions within the prescribed timelines.

b. Nomination and Remuneration Policy

During the financial year 2025-26, Nomination and Remuneration ("NR") policy was amended to be in conformity with RBIs current regulatory requirements. The Companys policy on Directors appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the companies Act 2013 ("the Act") are covered in the corporate Governance Report which forms part of the Boards Report. The amended NR Policy is available on the website of the company at https://sakthifinance.com/wp-content/ uploads/2026/08/SFL_NRC-Charter-and- Remuneration-Policy-August-2026.pdf. the policy on remuneration is given in Annexure 2.

11. PUBLIC ISSUE / REDEMPTION OF NON-CONVERTIBLE

debentures

a. Public Issue of Secured, Redeemable, Non-Convertible Debentures for 15,000 lakh

During the financial year 2025-26, your company made a further Public Issue of Secured, Redeemable, Non-convertible Debentures ("NCDs") of 1,000 each for an amount not exceeding 7,500 lakh, with an option to retain over-subscription for an amount not exceeding 7,500 lakh, aggregating 15,000 lakhs. The NcD issue opened on 8 August 2025 and closed on 22 August 2025. Your company received a valid subscription of 15,472.26 lakh and allotted 15,00,000 NcDs aggregating 15,000 lakh to the eligible allottees on 29 August 2025. The NcDs were listed and admitted for trading with BSE Limited with effect from 2 September 2025. The proceeds of the NcD issue were fully utilized in accordance with the objects stated in the prospectus and there are no deviations in the utilisation of the NcD issue proceeds.

11. b. Redemption of Secured, Redeemable, Non-Convertible Debentures ("NCDs")

The following Public Issue NcDs were redeemed during the year and up to the date of this report, the details of which are given below: (? lakh)

Sl No	Prospectus Date	Option(s)	Redemption Amount		Total amount redeemed	Date of redemption
			Principal	Interest
1	25 June 2021	V	3,566.23	27.36	3,593.59	29 August 2025
2	25 June 2021	VI	2,106.90	1,047.13	3,154.03	29 August 2025
3	30 January 2024	I	1,101.82	7.06	1,108.88	27 February 2026
4	30 January 2024	II	1,412.80	275.26	1,688.06	27 February 2026
5	5 April 2022	V	227.64	1.57	229.21	29 April 2026
6	5 April 2022	VI	126.30	54.01	180.31	29 April 2026
7	10 April 2023	III	656.18	1.16	657.34	8 May 2026
8	10 April 2023	IV	1,540.08	486.14	2,026.22	8 May 2026
9	13 June 2024	I	884.28	1.74	886.02	9 July 2026
10	13 June 2024	II	805.95	157.02	962.97	9 July 2026

12. DEPOSITS

The total deposits held by company as at 31 March 2026 stood at 20,872.26 lakhs as compared to 18,336.79 lakhs as at the end of the previous financial year.

As at the end of the financial year 2025-26, 82 number ol public deposits aggregating 91.90 lakhs (Principal) were due for repayment but remained unclaimed. The company has been regularly reminding the depositors about the maturity and out of the said deposits, 35 number o deposits amounting to 44.86 lakhs have since beer claimed and paid / renewed as per their instructions.

13. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND ("IEpF")

During the financial year 2025-26, your Company ha; transferred unclaimed dividend, unclaimed maturec deposits, debentures and subordinated bonds, including interest, amounting to 23.32 lakhs to IEPF. Further, the Company has also transferred 34,472 equity shares ol 10 each in respect of which dividend has remained unclaimed for seven consecutive years to IEPF.

In accordance with the IEPF Rules, the Company has sern individual notices and also advertised in the newspaper; seeking action from the shareholders who have no claimed their dividends for seven consecutive years oi more. Based on this, your Company has transferred al such unpaid or unclaimed dividends to IEPF, the details ol which are given below:

Dividend and Amount transferred Date of transfer the Year to IEpF (?) to IEpF

Equity Dividend 6 November

2017-18 2025

Further, your Company transferred 34,472 equity share; to the demat account of IEPF during the year undei review.

The shareholders / claimants whose shares or dividend that were transferred to the IEPF, may reclaim the shares or apply for refund from the IEPF Authority, by following the prescribed procedure in the IEPF Rules The shareholders may request the Company for the issue of an Entitlement Letter by submitting all the required documents, before making an application to the IEPF Authority.

During the financial year 2026-27, the Company wil transfer following unclaimed dividend and the underlying shares to IEPF, within statutory timelines:

Dividend Due date for transfer to IEPF Dividend for the year ended 2019: 30 October 2026 The shareholders are requested to ensure that they claim the dividends and equity shares referred to above, before they are transferred to the said Fund. The details of the other unclaimed dividends that are due to be transferred to IEpF in coming years are provided in the Corporate Governance Report.

Since 1955

The Company has appointed a Nodal Officer under the provisions of the Rules, the details of which are available on the website at https://sakthifinance.com/contact- information/. Details of shares in respect of which dividend has not been claimed are uploaded on the website of the Company at https://sakthifinance.com/ investor-education-and-protection-fund/.

The shareholders are encouraged to verify their records and claim their dividends of all the earlier seven years, if not claimed.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Retirement by rotation

In accordance with the provisions of Section 152(6) of the Act, Dr Mahalingam Manickam, (DIN: 00102233), Chairman and Non-Executive Director of the Company will retire by rotation at the ensuing AGM of the Company and being eligible, offers himself for re-appointment. Based on the recommendation of the Nomination and Remuneration Committee, the Board has also recommended his re-appointment to the members.

b. Retirement of Independent Directors

Smt. Priya Bhansali (DIN: 00195848) and Sri Kollengode Padmanabhan Ramakrishnan (DIN: 07029959),

Independent Directors, completed their second term of office as Independent Directors of the Company on 27 September 2025 and hence ceased to be Independent Directors of the Company and also the Committees in which they served as Chairman / Members with effect from that date. The Board of Directors placed on record their sincere appreciation for the valuable guidance and contribution rendered by them, during their long association as Independent Directors of the Company.

c. Appointment of Independent Directors Independent Director

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company have, at their meeting held on 27 September 2025, approved the appointment of Sri Saurabh Jain (DIN: 02322422) as an Independent Director (Additional) of the Company for a period of five years with effect from 27 September 2025 to 26 September 2030, both days inclusive, subject to the approval of Members of the Company. The members approved his appointment as an Independent Director of the Company for the term as mentioned above by passing a Special Resolution through postal Ballot on 4 November 2025.

d. Number of Meetings of the Board

Nine (9) meetings of the Board of Directors of the Company were held during the year. For details of the meetings, please refer to the Corporate Governance Report (Page No.37), which forms part of this Report. The intervening gap between any two meetings of the Board is well within the period of 120 days as per the Act and the Listing Regulations.

e. Key Managerial Personnel ("KMPs")

In terms of Section 203 of the Act, Sri Balasubramaniam Mahalingam (DiN: 00377053), Vice chairman and Managing Director, Sri. K Sundaramurthy, chief Financial Officer and Sri S Venkatesh, Company Secretary and Chief Compliance Officer are the Key Managerial Personnel (KMPs") of the Company.

Further, the Board of Directors have, at their meeting held on 6 December 2025, appointed Sri B Senthilnathan as Chief Operating Officer ("COO") of the Company in place of Sri K S Venkitasubramanian, who has taken other responsibilities within the group. Sri B Senthilnathan has also been designated as one of the KMPs of the Company with effect from that date under Sections 2(51) and 203 of the Act.

f. Fit and Proper criteria and Non-Disqualification Declarations by Directors

In compliance of RBIs (NBFC- Governance) Directions dated 28 November 2025, as amended, all the Directors of the Company have confirmed that they satisfy the prescribed "Fit and Proper" criteria and that they are not disqualified from being appointed / continuing as Directors in terms of Section 164(1) and (2) of the Act.

g. Payment of Commission to Dr Sundaraswamy

Veluswamy (DIN: 05314999), Non-Executive,

Non-Independent Director of the company

Dr Sundaraswamy Veluswamy (DIN: 05314999), Non-Executive, Non-Independent Director has been associated with our Company since November 1990. His oversight role directly impacts the Companys solvency and growth, particularly, in formulating capital adequacy frameworks, portfolio diversification strategies and the optimization of long-term debt structures, etc.

Considering his long and very eventful tenure spanning for more than three decades in various capacities held by him, the time devoted by him, his participation in strategic decision making, timely guidance provided by him to the Board on important policy matters, performance of the company and industry practices and in appreciation of it, the Board of Directors, have, subject to the approval of members and based on the recommendations of the Nomination and Remuneration Committee, Audit Committee, approved payment of commission of one (1) per cent on the net profits of the Company computed in the manner referred to in Section 198 of the Act, payable in such form, manner or proportions for the financial year 2025-26, i.e. from 1st April 2025 to 31st March 2026.

The members also approved the Special Resolution for payment of commission to Dr Sundaraswamy Veluswamy through Postal Ballot on 20 March 2026.

h. Statement of declaration given by the Independent Directors

Sri. Advait Kurlekar, Chairman of Nomination and Remuneration Committee, Sri Korukkai Visweswaran

Ramachandran, Chairman of Audit Committee, Smt. Balakrishnan Susheela, Sri Shivram Sethuraman and Sri Saurabh Jain are the Independent Directors of the Company as on the date of this report.

Based on the declarations received from the Independent Directors, the Board of Directors are of the opinion that they meet the independence criteria as prescribed under Section 149(6) of the Act read with the rules made under it and Regulation 16(1)(b) of the Listing Regulations and are Independent of the Management of the Company.

Further, in terms of Regulation 25(8) of the Listing Regulations, they have also confirmed that they are not aware of any circumstance or situation which exist or may reasonably be anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI Order or any other such authority.

Your Board of Directors of the Company, after reviewing and assessing the veracity of the declarations / disclosures submitted by all the Independent Directors concluded that in the opinion of the Board, the Independent Directors of the Company possess the requisite skills, qualifications, expertise and experience (including proficiency) in terms of Section 150(1) of the Act and applicable rules made thereunder in the field of Information Technology, Banking and Finance, Finance and Accounting, Capital Market, Human Resources etc. to qualify and continue as Independent Directors and they also hold highest standards of integrity.

The Independent Directors of the Company have also complied with the Code for Independent Directors prescribed under Schedule IV to the Act.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ("IICA") and the said registration is active as on the date of this report.

All the Independent Directors of the Company are either exempted from the requirement to undertake the on-line proficiency self-assessment test conducted by IICA or have passed the on-line proficiency self-assessment test, as applicable.

The details of familiarization programmes for the Independent Directors are given separately in the Corporate Governance Report.

Sri. Shanmugasundaram Chandrasekhar

(DIN: 00011901) ceased to be an Independent Director of the Company with effect from 1 September 2025

and he continues on the Board as a Non-Executive, Non-Independent Director of the Company.

i. Code of Conduct for Directors and Senior Management

All the Directors and members of the Senior Management have confirmed compliance with the code of conduct of the company. a declaration to this effect has been signed by Vice chairman and Managing Director and forms part of the Annual Report.

j. Inter se relationship amongst Directors

Except Dr Mahalingam Manickam, Chairman, Sri Balasubramaniam Mahalingam, Vice Chairman and Managing Director and Sri Srinivaasan Mahalingam, Director, who are related to each other as brothers, none of the other Directors is related to each other within the meaning of the term "relative" as per Section 2(77) of the Act read with the Listing Regulations.

k. Annual Performance Evaluation

In terms of the requirements of the Act and Listing Regulations, the Board has carried out an annual performance evaluation of the individual Directors, committees of the Board and the Board as a whole.

The evaluation was carried out based on a structured questionnaire which includes performance criteria such as performance of duties and obligations, independence of judgment, level of engagement and participation, contribution in increasing the Boards overall effectiveness etc. Your directors have expressed their complete satisfaction on the functioning and performance of Individual Directors, Board and its committees.

15. BOARD AND ITS COMMITTEES

a. Board

Your companys Board is well diversified and the Directors have rich experience and expertise in Information Technology, Banking and Finance, Accounting, Marketing, Human Resources, Strategy, capital Market etc.

As on 31 March 2026, the Boards strength of your company is ten (10) Directors consisting of one (1) Non-Executive chairman, one (1) Executive Director, three (3) Non-Executive, Non-Independent Directors and five (5) Independent Directors of which, one is a Woman Director.

b. Committees constituted by the Board of Directors

the Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The details of the Board committees along with their composition, powers, terms of reference, etc. are given in the corporate Governance Report which forms part of this Annual Report. During the year, all the recommendations of the committees were accepted by the Board.

c. Audit Committee

During the year, the Audit committee was reconstituted. The present Audit committee has four non-executive directors as members, of which three are Independent Directors.

The composition of the committee is given below:

a. Sri Bhaskar Madhanagopal, chairman*

b. Sri Korukkai Visweswaran Ramachandran, chairman**

c. Sri Kollengode Padmanabhan Ramakrishnan, Member***

d. Smt Priya Bhansali, Member***

e. Sri Srinivaasan Mahalingam, Member

f. Smt Balakrishnan Susheela, Member****

g. Sri Shivram Sethuraman, Member ****

* Up to 21 May 2025

** With effect from 4 July 2025 *** Up to 27 September 2025 **** With effect from 27 September 2025 the Audit Committees composition has complied with the minimum requirements prescribed under the Act, Listing Regulations, as amended and the Reserve Bank of India (Non-Banking Financial company - Governance) Directions 2025 of having a minimum of two-thirds of independent directors, including the chairperson. All members of the committee are non-executive directors possessing financial literacy and expertise in accounting or financial management related matters. During the year under review, six (6) Audit committee Meetings were held. During the year, all the recommendations of the Audit committee were approved and accepted by the Board.

16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financial year 2025-26, the company has not given / provided any loans, guarantee and securities to parties mentioned in Section 185 of the Act. Hence the provisions of Section 186 of the Act is not applicable to the company.

17. Related pARTY TRANSACTIONS

the Company has entered into contracts or arrangements with the related parties in the ordinary course of business and these are on arms length basis only and has complied with the applicable provisions of the Act read with the rules made thereunder and Listing Regulations. there are no contract or arrangement entered into with Related Party(ies) during the year which requires to be disclosed in Form AOc-2 under Sections 188(1) and 134(h) of the Act for the financial year 2025-26 and hence does not form part of the Boards Report.

18. INTERNAL CONTROL

The information about internal controls is set out in the Management Discussion and Analysis Report which forms part of this Report.

19. RISK MANAGEMENT

The Risk Management is overseen by the Risk Management Committee of the Company. The Committee oversees the Companys processes and policies for determining risk tolerance against established levels. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis Report which forms part of the Boards Report.

20. VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The company has formulated a Vigil Mechanism (Whistle Blower Policy) for Directors and employees to report their genuine concerns or grievances. The Vigil Mechanism (Whistle Blower Policy) is uploaded on the website of our Company at https://sakthifinance.com/wp-content/ uploads/2026/08/SFL_Vigil-Mechanism-Whistle- Blower-Policy_August-2026.pdf.

During the year, no concerns or grievances has been received in this regard.

21. subsidiaries, associates and joint venture companies

The Company does not have any subsidiary, associate or joint venture company. There was no company which has become or ceased to be Companys subsidiary, joint venture or associate company during the financial year ended 31 March 2026.

22. corporate governance report

As required under regulation 34(3) read with Schedule V to the Listing regulations, a report on corporate Governance Report and a certificate from the Statutory Auditors of the company regarding compliance of the conditions of corporate Governance form part of the annual report and is set out in Annexure 3.

23. disclosure as per the sexual harassment of women at workplace (prevention, prohibition and

REDREssAL) ACT 2013

the Company has put in place a Sexual Harassment Prevention Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) act 2013. An Internal Compliance Committee ("ICC") has been formed to redress complaints received regarding sexual harassment. ah employees are covered under this Policy. During the calendar year 2025, no complaints were received in this regard by the icc, the details of which are given below:

si. No particulars	Details
1 Number of complaints of sexual harassment received during the financial year.	nil
2 Number of complaints disposed of during the year.	nil
3 Number of cases pending for more than 90 days.	nil
4 Number of complaints outstanding as at the end of the year	nil

24. Disclosures of MATERNITY benefits UNDER social security code 2020

! During the financial year 2025-26, your company has

c complied with applicable provisions of the Maternity

1 Benefits under Social Security code 2020.

25. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE To THE FINANCIAL sTATEMENTs

The company has put in place necessary internal financial controls which are adequate and are operating effectively. s The controls are adequate for ensuring the orderly and efficient conduct of its business, completeness ofaccounting records and timely preparation of reliable f financial information, besides adherence to the companyspolicies, safeguarding of assets, prevention and detectionof frauds and errors, accuracy, etc.

The Statutory Auditors of the company,

M/s. P N Raghavendra Rao & co, chartered Accountants,have also examined the internal financial controls of the : company and have submitted an unmodified opinion onthe adequacy and operating effectiveness of the internal r financial controls over financial reporting as on 31 March 2026.

, 26. directors responsibility statement

As required under Section 134(5) of the Act, your Directorsconfirm, to the best of their knowledge and belief, that: a. in the preparation of the annual accounts,the applicable accounting standards have been f followed and that there are no material departures;

b. they have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to : give a true and fair view of the state of affairs of the( company at the end of the financial year and of theprofit of the company for the financial year; t c. they have taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Act for . safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

e. they have laid down internal financial controls tobe followed by the company and that such internal financial controls are adequate and operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27. corporate social responsibility ("CsR")

The cSR Policy of the company and the details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules 2014 have been disclosed in Annexure 4. Further, details regarding composition of corporate Social

Responsibility ("CSR") Committee and other particulars are provided in the Corporate Governance Report which forms part of this report.

As the Companys CSR spending has exceeded 50 lakhs of the average net profits of the last preceding three years, your company held a cSR committee Meeting on 10 March 2026 and the required cSR spending has been considered and approved by the committee.

During the financial year 2025-26, your company is required to spend 50.52 lakhs towards cSR expenses. Your Company has spent 50.68 lakhs during the financial year 2025-26 (including set-off of an amount of 0.40 lakhs excess spent during the financial year 2024-25).

28. AUDITORS

a. Appointment of Statutory Auditors

Members of the company had, at the 67th Annual General Meeting ("AGM") of the company held on 10 September 2024, appointed M/s P N Raghavendra Rao & Co, Chartered Accountants as Statutory Auditors of the company to hold office from the conclusion of the 67th AgM till the conclusion of the 70th AGM. The Statutory Auditors hold a valid peer review certificate as prescribed under the Listing Regulations. The Statutory Auditors have given a confirmation on their eligibility and non-disqualification.

The Statutory Auditors of the company have issued an unmodified Audit Report on the Audited Financial Statements for the financial year ended 31 March 2026. the Audit Committee periodically assesses the independence and objectiveness of the Statutory Auditors and the effectiveness of the Audit process.

The Statutory Auditors attended the AGM of the company.

b. Adoption of Policy for appointment of Statutory Auditors

In compliance with the RBI Guidelines, your company has adopted a Policy for appointment of Statutory Auditors of the company, which has been hosted on the website of the company, https://www.sakthifinance. com/wp-content/uploads/2021/08/SFL_AuditorAppt Policy_14August2021.pdf.

c. Secretarial Auditor

In terms of Regulation 24A of the Listing Regulations, at the 68th Annual General Meeting of the company held on 27 September 2025, the members have appointed Sri R Dhanasekaran (IcSI Membership No. FcS 7070), company Secretary in Practice (having certificate of Practice No. 7745 and Peer Review No. 6739/2025) as the Secretarial Auditor of the company to hold office for a period of 5 (Five) consecutive years from the conclusion of the 68th AGM till the conclusion of the 72nd AGM of the company. the Secretarial Auditor has issued the Secretarial Audit Report for the financial year 2026 which is set out in Annexure 5.

The Secretarial Auditor was present at the last AGM of the company held on 27 September 2025.

d. Cost Records and Cost Audit

Maintenance of cost records and requirements of cost audit as prescribed under the provisions of Section 148(1) of the Act is not applicable for the business activities carried out by the company.

e. Independent Auditors Certificate on Corporate Governance and Secretarial Auditors Report

With reference to the observation made by the Statutory Auditor in the corporate Governance compliance certificate and by the Secretarial Auditor in the Secretarial Audit Report regarding the delay in obtaining prior shareholder approval under Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") for the appointment of Smt. Susheela Balakrishnan (DIN: 07140637) as a Non-Executive Independent Director, the Board wishes to provide the following clarification:

Smt. Susheela Balakrishnan (DIN: 07140637) was appointed by the Board as an Additional Independent Director on 14th August 2025 and the company has subsequently regularized her appointment by passing a Special Resolution at last AGM held on 27th September 2025 within the time line prescribed under Regulation 17(1c). The delay in obtaining prior shareholder approval by Special Resolution occurred due to an overlap in interpreting the timelines between Regulation 17(1A) (prior approval for appointment of any person as Non-Executive Director aged more than 75 years) and Regulation 17(1c) (3-month window to approve the appointment of a person on the Board of Directors). This delay was purely technical and procedural, with no impact on corporate governance or the interests of shareholders.

However, the Management has taken note of the existing compliance framework and reaffirmed the companys commitment to strong corporate governance practices.

29. INDEPENDENT AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT

There are no disqualifications, reservations, adverse remarks or disclaimers in the Independent Auditors Report and Secretarial Auditors Report. The Statutory Auditors of the company have not reported any fraud as specified under the second proviso of Section 143(12) of the Act (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

30. PARTICULARS REQUIRED UNDER SECTION 134 OF THE ACT

Particulars as required under Section 134(3)(m) of the Act read with companies (Accounts) Rules 2014 are given below:

a. The company has no activity involving conservation of energy or technology absorption;

b. (i) The Foreign Exchange Earnings : Nil (ii) Foreign Exchange Outgo : 2.43 lakh

31. particulars of employees and remuneration

The Company had 659 permanent employees on its rolls as on 31 March 2026.

The Information required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in Annexure 6 to this report.

The statement containing the names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the act read with rule 5(2) and (3) of the above rules forms integral part of this report. However, in terms of the proviso to Section 136(1) of the act, the annual report is being sent to the Members excluding the above statement. The said statement is open for inspection and any Member interested in obtaining a copy of it may write to the company Secretary of the company at investors@ sakthifinance.com.

32. ORDERS PASSED BY THE REGULATORS OR COURT

There were no significant and material orders passed by the regulators or courts or Tribunals affecting the going concern status of your company and its future operations.

33. MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments which occurred between the end of the financial year of the company and the date of this report affecting the companys financial position.

34. ANNUAL RETURN

in terms of Sections 92(3), 134(3)(a) read with rule 12 of the companies (Management and administration) rules 2014, the annual return in Form MGT-7 for financial year 2026 will be made available on the website of the Company at https://sakthifinance.com/annual-return/.

35. PECUNIARY RELATIONSHIP OR TRANSACTIONS OF non-executive DIRECTORS

During the year, the Non-Executive Directors except Dr Sundarasamy Veluswamy, non-executive, non-independent Director of the company, had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/committees of the Board and any other transactions as approved by the Audit Committee or Board which are disclosed in the notes to the financial statements.

36. SECRETARIAL STANDARDS COMPLIANCE

Your Directors confirm that the company has complied with the applicable Secretarial Standards issued by the institute of company Secretaries of india in relation to Board and General Meetings.

37. OTHER DISCLOSURES

in terms of applicable provisions of the act and Listing Regulations, your Company discloses that during the financial year under review there was :

a. no issue of shares with differential rights in relation to dividend, voting or otherwise;

b. no issue of shares (including sweat equity shares) to Directors or employees of the company;

c. no scheme for provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;

d. no revision of financial Statements and the Boards report of the company;

e. no failure to implement any corporate action;

f. no deviation or variation in connection with certain terms of public issue, rights issue, preferential issue, etc;

g. no suspension of the companys securities;

h. no subsidiary or holding company and hence the Managing Director of the company did not receive any remuneration or commission during the year from them.

i. no application which was made under the insolvency and Bankruptcy code 2016 and hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy code 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable; and

j. no requirement to disclose the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial institutions along with the reasons thereof.

38. ACKNOWLEDGEMENT

Your Directors wish to place on record the valuable guidance and excellent co-operation extended by the members, banks, financial institutions, rating agencies, reserve Bank of india and other regulatory authorities. The Board of Directors wish to convey their sincere thanks to the depositors and debenture holders of the company for their continued patronage. They also wish to appreciate the excellent services rendered by the employees of the company.

We pray the Goddess SAKTHI to continue to shower her blessings and to guide us in all our endeavours.

	For and on behalf of the Board
	Mahalingam Manickam
14 august 2026	chairman
coimbatore - 18	Din: 00102233