Solex Energy Ltd Directors Report

Dear Members,

The Board of Directors ("the Board") of Avanse Financial Services Limited ("the Company" or "your Company") have the pleasure in presenting the Annual Report and the Audited Financial Statements, both Consolidated and Standalone, of your Company ("Audited Financial Statements") for the Financial Year ended March 31, 2026 ("year under review" or "the Financial Year").

1. Financial Performance:

The financial performance of the Company for the year ended March 31, 2026 is summarized below:

				( in Lakhs)
	Standalone	Consolidated
	2025-26	2024-25	2025-26	2024-25
Revenue from Operations	2,88,198.72	2,34,564.22	2,89,244.95	2,34,707.18
Other Income	692.93	515.51	460.97	468.28
Total Income	2,88,891.65	2,35,079.73	2,89,705.92	2,35,175.46
Total Expenditure	2,08,444.64	1,67,589.81	2,09,371.57	1,67,961.44
Profit Before Tax	80,447.01	67,489.92	80,334.35	67,214.02
Profit After Tax	59,794.49	50,422.68	59,686.49	50,212.30
Total Comprehensive Income	66,712.57	45,751.88	67,952.69	45,601.54
EPS (Rs. per share)
(a) Basic	22.98	20.02	22.94	19.94
(b) Diluted	22.44	19.33	22.40	19.25

The above figures are extracted from the Audited Financial Statements which have been prepared in accordance with Indian Accounting Standards ("IND AS") as notified under Sections 129 and 133 of the Companies Act, 2013 ("the Act") read with the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act, the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the Reserve Bank of India ("RBI") (Non-Banking Financial Companies · Financial Statements: Presentation and Disclosures) Directions, 2025.

The Audited Financial Statements together with the Auditors Reports thereon form part of the Annual Report of the Company for the year under review. Further, the Annual Report of the Company is available on the website of the Company at www.avanse.com.

2. Review of Operations and the State of Affairs of the Company

The Companys Assets Under Management ("AUM") stood at 23,411 crore as on March 31, 2026 as compared to 18,985 crore in the previous Financial Year indicating 23% Y-o-Y growth. The Company recorded a total income of 2,888.92 crore as compared to 2,350.80 crore in the previous Financial Year. The net interest income reported for the period was 996.91 crore as compared to 796.01 crore in the previous Financial Year.

The Companys Consolidated Assets Under Management ("AUM") stood at 23,665 crore as on March 31, 2026 as compared to 18,998 crore in the previous Financial Year indicating 25% Y-o-Y growth. The Company recorded a total income of 2,897.06 crore as compared to 2,351.75 crore in the previous Financial Year. The net interest income reported for the period was 1,005.90 crore as compared to 797.41 crore in the previous Financial Year.

During the year under review, the Company disbursed loans amounting to 7,019 crore as compared to 6,914 crore in the previous Financial Year and recorded a growth of 2 % on y-o-y basis.

During the year under review, at consolidated level the Company disbursed loans amounting to 7,108 crore as compared to 6,927 crore in the previous Financial Year and recorded a growth of 3% on y-o-y basis.

The Profit Before Tax increased by 19 % from 674.90 crore in the previous Financial Year to 804.47 crore in the current Financial Year. The Profit After Tax increased by 19% from 504.23 crore in the previous Financial Year to 597.94 crore in the current Financial Year.

The Consolidated Profit Before Tax increased by 20% from 672.14 crore in the previous Financial Year to 803.34 crore in the current Financial Year. The Consolidated Profit After Tax increased by 19% from 502.12 crore in the previous Financial Year to 596.86 crore in the current Financial Year.

The Net Worth of the Company as on March 31, 2026, stood at 5,999.43 crore (excluding deferred tax assets and intangible assets) as compared to 4,082.62 crore (excluding deferred tax assets and intangible assets) in the previous Financial Year, as reported in the Financial Statement.

The Gross Stage 3 (GS-3) as on March 31, 2026, were 74.97 crore equivalent to 0.36% of the total loan book of the Company. The Net Stage 3 (NS-3) as on March 31, 2026, stood at 12.23 crore resulting in NS-3 of 0.06 %. The Companys total ECL provision / POS as of March 31, 2026, stands at 1.24% as compared to 0.98% as of March 31, 2025.

3. Material Events during the Year

Proposed Initial Public Offering of Equity shares of the Company

As was informed in the Companys 33rd Annual Report, the Company had received the final observations on its draft red-herring prospectus ("DRHP") [for the Companys maiden initial public offering of 3,500 crore, comprising of a fresh issue of equity shares upto an amount of 1,000 crore and offer for sale of equity shares by selling shareholders upto an amount of 2,500 crore ("IPO")] from SEBI vide its letter dated October 23, 2024 ("SEBIs Observation Letter"), which was valid for a period of twelve months during which time Company could bring its initial public offer.

During the year under review, your Company has, considering the evolving geopolitical situation, primarily the changes in the immigration policies in US and other countries, decided not to proceed with the initial public offering. As on the date of this report, your Company is awaiting conducive market conditions and would re-file its DRHP with the SEBI, post obtaining requisite approvals, when the conditions would become favourable.

Issue of compulsorily convertible preference shares ("CCPS") on a rights basis

During the year under review, your Company has issued and allotted 31,743,514 CCPS of 10 each on a rights basis for cash to the participating shareholders for an aggregate amount of ~ 1,200 crore on December 26, 2025.

New credit rating

During the year under review, your Company has been assigned new credit ratings by India Ratings & Research Private Limited ("India Ratings & Research") as per the following details.

Instrument Type	Issue Size ( in crore)	Rating assigned along with Outlook
Commercial paper	INR 200	IND A1 +
Bank loan facilities	INR 3,000	IND AA/Stable
Non · convertible Debentures	INR 2,000	IND AA/Stable

4. Dividend

In order to conserve resources for future growth, the Board has not recommended any dividend on its shares for the year under review.

5. Transfer to Reserve

For the Financial Year ended March 31, 2026, an amount of 119.59 crore has been transferred to the Special Reserve pursuant to the provisions of Section 45-IC of the Reserve Bank of India Act, 1934.

6. Credit Rating

While the details of the new credit ratings obtained by the Company has been alluded to hereinabove, your Companys overall credit ratings remains a positive reflection of its prudence, strong net worth base, adequate capitalisation and financial discipline, the details of which are as follows.

Rating Agency	Instrument	Credit Rating
	Long-Term Bank Facilities	IND AA/Stable
India Ratings	Non-Convertible Debentures	IND AA/Stable
	Commercial Paper	IND A1 +
	Long-Term Bank Facilities	CRISIL AA-/ Stable
CRISIL Ratings	Non-Convertible Debentures	CRISIL AA-/ Stable
	Commercial Paper	CRISIL A1 +
	Long-Term Bank Facilities	CARE AA-; Stable
	Non-Convertible Debentures	CARE AA-; Stable
CARE Ratings	Market Linked Debentures	CARE PP-MLD AA-; Stable
	Subordinate Debt	CARE AA-; Stable
	Commercial Paper	CARE A1 +
Brickwork Ratings	Non-Convertible Debentures	BWR AA-/Stable
	Subordinate Debt
ICRA Ratings	Commercial Paper	ICRA A1 +

During the year, India Ratings & Research assigned new ratings of IND A1+ for the Commercial Paper borrowings programme and IND AA/Stable for the Bank loan facilities and non-convertible debentures in February 2026.

Ratings by CARE Ratings were reaffirmed for Long-Term bank facilities, Market-Linked Debentures, Non-Convertible Debentures ("NCDs") (including Subordinated Debt) at CARE AA-; Stable in July 2025. Further, CARE Ratings also reaffirmed the rating of Commercial Paper borrowings programme of the Company at CARE A1+.

CRISIL Ratings assigned fresh ratings for Subordinate Debt Borrowings at CRISIL AA-/Stable in May 2025. Further, CRISIL Ratings also reaffirmed the Companys rating at CRISIL AA-/ Stable for the Long-Term bank facilities and NCDs and CRISIL A1+ for Commercial Paper borrowings programme.

ICRA Limited reaffirmed its rating for the Commercial Paper borrowings programme of the Company at ICRA A1+ in November 2025.

During the year, Brickworks Ratings also reaffirmed the Companys rating at BWR AA- (Stable) for all Long-Term Secured Borrowings in the form of NCDs and Sub-ordinated NCDs.

7. Sources of Funds

The Companys borrowing philosophy continues to remain prudent with emphasis on long-term borrowings to ensure robust asset-liability management, well-diversified funding sources and maintenance of sufficient liquidity. The Company also ensured that the liquidity buffer maintained is sufficient not only to meet its debt servicing obligations but also to provide enough cover for strong business demand. The debt profile remains long-term in nature keeping in mind the long-term nature of assets in order to maintain robust asset liability management profile. Loans from Banks and Financial Institutions account for 55% of total outstanding borrowings followed by 27% in the form of External Commercial Borrowings, 16% in the form of NCDs, 1% in the form of Commercial Papers (CP) and <1% in the form of Securitization ("PTC"). Off-Balance sheet borrowings in the form of Direct Assignment / Co-Lending Arrangement constituted 17% of outstanding On-Balance sheet borrowings and 13% of Assets under Management.

a) Loan from Banks / Financial Institutions

During the year under review, the Company received sanctions for term loan of 4,348 crore from Banks / Financial Institutions, of which the Company availed term loans of 4,098 crore sanctioned during the year under review and 350 crore from limits undrawn and sanctioned during FY25. The outstanding of term loans from Banks / Financial Institutions as on March 31, 2026, was 10,071 crore. The Bank Loans were assigned the rating of IND AA (Stable) by India Ratings & Research, CRISIL AA-/Stable by CRISIL Ltd and CARE AA- (Stable) by CARE Ratings Limited. Additionally, the outstanding of WCDL from Banks as on March 31, 2026, was 50 crore

b) NCDs

During the year under review, the Company issued NCDs amounting to 150 crore on private placement basis. The NCDs are listed on the Debt segment of BSE Limited. The Company has been regular in the payment of principal / interest towards all the outstanding NCDs. As on March 31, 2026 the total value of outstanding NCDs are 2,940 crore and the total outstanding value of Subordinate Debt is 51 crore. NCDs were primarily issued to corporates and financial institutions such as Mutual Funds, Banks, Small Finance Banks, Corporates etc.

c) External Commercial Borrowings ("ECB")

During the year under review, the Company had raised incremental ECB of 2,262 crore, out of which 2,152 crore was classified under the Social Loan category and were raised from domestic and foreign Banks. The total outstanding amount of ECB stood at 4,979 crore as on March 31, 2026. Apart from the incremental ECB, the Company had raised ECB from World Business Capital,

Inc., a USA based financial institution(s) in the social impact category and is guaranteed by the US International Development Financial Corporation (DFC) and an ECB also classified under Social Loan category which was raised from domestic and foreign banks.

d) Commercial Papers ("CP")

During the year under review, the Company had issued CP amounting to 595 crore. CP amounting to 595 crore were listed on BSE Limited. The CP outstanding as of March 31, 2026, were 138 crore. The Companys CP were assigned the highest rating of "IND A1+" by India Ratings & Research, "Crisil A1+" by Crisil Ratings Limited, "CARE A1+" by CARE Ratings Limited and "ICRA A1+" by ICRA Ltd.

e) Securitisation ("PTC")

The Company, from time to time, accesses the securitisation market to raise long-term funds with matching asset maturity profile. During the year under review, no new PTC transactions were undertaken by the Company.

f) Direct Assignment ("DA") / Co-lending ("CLM")

The Company has assigned its pool towards DA / CLM matching with its asset maturity profile. During the year under review, the Company assigned its loan pool and received 1,774 crore as purchase consideration.

The Company has actively engaged with banks to enable it to access fund raising via the Co-lending arrangements. During the year under review, the Company had assigned its loan pool to the Co-lending partner banks and received 187 crore as consideration under the existing Co-Lending arrangement.

8. Share Capital

a) Authorised Share Capital

The Board and Shareholders of the Company, at their respective meeting held on December 17, 2025 and December 19, 2025, re-classified the authorised share capital of the Company from 200,00,00,000 divided into 35,00,00,000 equity shares of 5/- each and 2,50,00,000 preference shares of 10/- each to 200,00,00,000 divided into 30,00,00,000 equity shares of 5/- each and 5,00,00,000 preference shares of 10/- (Indian Rupees Ten only) each.

As on March 31, 2026, the Authorised Share Capital of the Company was 2,00,00,00,000 divided into 30,00,00,000 equity shares of 5 each and 5,00,00,000 preference shares of 10 each.

b) Issued, Subscribed and Paid-up Share Capital

As on March 31, 2026, the Companys:

(a) issued, subscribed and paid-up equity share capital stood at 1,25,91,16,160 divided into 25,18,23,232 equity shares of 5 each; and

(b) issued, subscribed and paid-up preference share capital stood at 31,74,35,140 divided into 3,17,43,514 preference shares of 10 each, the details of the issue has already been provided herein above.

During the period from the close of Financial Year till the date of this Report, there were no changes in the Authorised Share Capital and the Issued, Subscribed and Paid-up Share Capital of the Company.

As on the date of this Report, the entire shareholding of the Company is held in dematerialised mode.

9. Employee Stock Option Plan

Employee Stock Options have been recognised as an effective instrument to attract talent and align the interest of employees with that of the Company, providing an opportunity to the employees to share in the growth of the Company and to create long-term wealth in the hands of employees, thereby acting as a retention tool.

To achieve the above, your Company has formulated "Avanse Financial Services Limited Employee Stock Option Plan 2019" ("ESOP 2019") and the Avanse Financial Services Limited Employee Stock Option Plan 2024 ("ESOP 2024") (both ESOP 2019 and ESOP 2024 collectively referred to as "the ESOP Schemes") for the employees of the Company which are in compliance with the applicable provisions of the Act.

The disclosure pursuant to rule 12 of the Companies (Share Capital & Debentures) Rules, 2014, is provided in "Annexure I" for the ESOP Schemes.

10. Meetings of the Board

The Board of your Company meets at regular interval to discuss and decide on the Companys performance, strategies and for various other purposes. During the year under review, the Board met 8 times. The meetings of the Board were held on April 29, 2025 (and reconvened on April 30, 2025), August 12, 2025 (and reconvened on August 13, 2025), October 15, 2025 (and reconvened on October 16, 2025), December 17, 2025, January 20, 2026, February 9, 2026, March 5, 2026 and March 18, 2026.

All the meetings were held in a manner that not more than 120 days lapsed between two consecutive meetings. The required quorum was present at and throughout all the meetings. Further details on the Board, its meetings, Boards committees composition and attendance at the meetings of the Board and its committees are provided in the Corporate Governance Report, which forms part of this Annual Report.

11. Registration as a Non-Banking Finance Company and a Corporate Agent

Your Company is registered with the RBI as a Non-Deposit taking Non-Banking Finance Company ("NBFC") bearing registration no. B-13.01704. The Company is classified as a Middle Layer NBFC in terms of the Reserve Bank of India (Non-Banking Financial Companies · Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 as amended from time to time.

Your Company is also registered with the Insurance Regulatory Development Authority of India ("IRDAI") as a Corporate Agent (composite) vide registration no. CA0445. The Company acts as a Corporate Agent for Axis Max Life Insurance Limited (formerly known as Max Life Insurance Company Limited), Pramerica Life Insurance Limited, HDFC Life Insurance Company Limited, ICICI Lombard General Insurance Company Limited, Zuno General Insurance Limited (formerly known as Edelweiss General Insurance Company Limited) and Care Health Insurance Limited.

The Company has complied with all the applicable rules and regulations prescribed by RBI and IRDAI during the year under review.

12. Change in the Nature of Business

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

13. Public Deposits

Your Company neither accepted nor renewed any deposits from the public during the year under review or in the past. Further, your Company would not accept any public deposit without prior approval from the RBI.

14. Material Changes and Commitments affecting the Financial Position of the Company

There were no material changes and commitments affecting the financial position of the Company from the end of the Financial Year up to the date of this Report.

15. Details of Holding / Subsidiary / Joint Ventures / Associate Companies

Olive Vine Investment Ltd, a private company limited by shares, registered under the laws of Republic of Mauritius continues to remain holding company of your Company and Avanse Global Finance IFSC Private Limited ("Avanse Global") continues to remain a wholly- owned subsidiary of the Company.

Avanse Global is not a material subsidiary of the Company within the meaning of Regulation 16 of the SEBI Listing Regulations.

A statement containing the salient features of the financial statements of Avanse Global, as required under the Act, is provided in Form AOC-1 as "Annexure II

Your Company does not have any joint venture or associate during the year under review.

16. Internal Financial Controls

The Company and its subsidiary have well-established internal control systems in place that are commensurate with the nature of their business and size, scale and complexity of its operations. The internal financial controls with reference to the financial statements as designed and implemented by the Company are adequate.

During the year under review, no material or serious observation were received from the Auditors of the Company for inefficiency or inadequacy of such controls.

17. Internal Audit

Your Company has in place an effective internal audit framework to monitor the efficacy of internal controls. The Company has appointed a Chief Audit Officer who is responsible for Internal Audit and has instituted a Board approved Internal Audit Charter and Risk-Based Internal Audit Policy in compliance with the RBIs Risk Based Internal Audit Framework for NBFCs, as amended from time to time. The internal audit plan is approved by the Audit Committee, and internal audits are undertaken on a periodic basis to independently validate the existing controls. Internal Audit Reports are reviewed by the management and corrective actions are initiated to strengthen controls and enhance the effectiveness of existing controls.

Critical internal audit observations are presented on a quarterly basis before the Audit Committee along with the status of management actions and the progress of implementation of recommendations.

18. Auditors and Audit Reports

a) Auditors, their Reports and Notes to Financial Statements

Pursuant to the provisions of the Act and the rules framed thereunder, the SEBI Listing Regulations and guidelines issued by RBI in this regard, as amended from time to time, M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), have been appointed as the Auditors of the Company for a term of three consecutive years from the conclusion of the 31st Annual General Meeting held in 2024 until the conclusion of the 34th Annual General Meeting of the Company to be held in 2027.

Since the asset size of your Company crossed the limit of 15,000 crore during the year ended March 31, 2025, the Company was required to appoint a Joint Statutory Auditors pursuant to the RBI Guidelines for Appointment of Statutory Central Auditors / Statutory Auditors of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated June 11, 2021. Accordingly, the Company, at its Annual General Meeting held on June 27, 2025, appointed M/s. Kirtane & Pandit LLP as the Joint Statutory Auditors for a period of three consecutive years with effect from April 1, 2025 till March 31, 2028.

The reports issued by the joint auditors does not contain any qualifications, reservations, adverse remarks or disclaimer.

Further, the auditors have not reported any incident of fraud to the Audit Committee or the Board of Directors under Section 143(12) of the Act during the Financial Year under review.

b) Secretarial Auditors and their Report and Secretarial Compliance Report

Pursuant to provisions of Section 204(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Makarand M. Joshi & Co., Practicing Company Secretaries as the secretarial auditors of the Company for the year under review.

The Secretarial Audit Report in Form MR-3 for the Financial Year, as received from the Secretarial Auditor, is attached as "Annexure III" to the Boards Report. The Secretarial Auditors report does not contain any qualifications, reservations, adverse remarks or disclaimer.

Additionally, your Company has also obtained an Annual Secretarial Compliance Report for the Financial Year pursuant to Regulation 24A of the SEBI Listing Regulations from M/s. Sachin Manseta & Associates, Practicing Company Secretaries. The said report will be submitted to BSE Limited (on which NCDs of the Company are listed) within the stipulated timeline and shall also be uploaded on the website of the Company at https://www.avanse.com/pdf/notice/Final%20Secretarial%20Compliance%20Report%20FY26.pdf

Further, the Secretarial Auditors have not reported any incident of fraud to the Audit Committee or the Board of Directors during the Financial Year under review.

c) Cost Records and Auditors

The provisions of cost records and cost audit, as prescribed under Section 148 of the Act, are not applicable to the Company.

19. Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, the Annual Return of the Company as at March 31, 2026 in the prescribed Form MGT 7 is available on the Companys website at https://www.avanse.com/pdf/financials/Annual%20Return%20FY%202025-26.pdf.

20. Conservation of Energy and Technology Absorption

As your Company is an NBFC, the particulars regarding conservation of energy as required to be disclosed pursuant to provision of Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014, are not relevant to its activities. During the year under review, your Company has developed / implemented various technology driven solutions. The details like benefits derived from such solutions, the efforts made towards such technological developments etc. are provided in the Annual Report.

21. Foreign Exchange Earnings and Outgo

The foreign exchange outgo during the Financial Year was 376.82 crore; of which 339.45 crore and 32.12 crore was on account of payment of principal and interest / other financing costs on ECB borrowings respectively and the balance 5.25 crore were towards operating expenses incurred by the Company during the year under review.

Further, following the decision to not proceed with the proposed Initial Public Offering (IPO), the Company recovered 11.02 crore from one of the selling shareholders as reimbursement for the IPO related expenses incurred.

22. Directors and Key Managerial Personnel ("KMPs")

(i) Composition of the Board

The composition of the Board of your Company continues to be in accordance with Section 149 of the Act and the applicable provisions of the SEBI Listing Regulations with an appropriate combination of Executive, Non-Executive and Independent directors.

As on March 31, 2026, the Board of your Company comprised of ten directors, consisting of five independent directors (including two women directors), four Non-Executive directors and one Managing Director and CEO. The directors, individually and collectively, bring in a wide range of skills and experience to the Board.

The Board of Directors of the Company as on March 31, 2026, comprises:

Name of the Director	DIN	Designation
Mr. Neeraj Swaroop	00061170	Independent Director and Chairperson
Mrs. Vijayalakshmi R. Iyer	05242960	Independent Director
Mrs. Savita Mahajan	06492679	Independent Director
Mr. Ravi Venkatraman	00307328	Independent Director
Mr. Rakesh Bhatt	02531541	Independent Director
Mr. Narendra Ostawal	06530414	Non- Executive Director
Mr. Hemant Mundra	08192978	Non-Executive Director
Mr. Sunish Sharma	00274432	Non-Executive Director
Mr. Luca Molinari	10615114	Non-Executive Director
Mr. Amit Gainda	09494847	Managing Director and CEO

(ii) Appointment / Re-appointment / Retirement by Rotation of Directors

(a) Appointment of Independent Director

As was informed in the Companys 33rd Annual Report, the Board, basis the recommendation of the Nomination, Remuneration and Compensation Committee, appointed Mr. Rakesh Bhatt (DIN: 02531541) as an Additional Director (categorized as an Independent Director) vide its circular resolution passed on March 8, 2025, to hold office till the expiry of three months from the date of appointment, or the date of the next general meeting of the Company, whichever is earlier.

Subsequent to the above, the Shareholders of the Company, at their extra-ordinary general meeting held on April 29, 2025, have approved the appointment of Mr. Rakesh Bhatt as an Independent Director of the Company for a term of five consecutive years from March 8, 2025, who shall not be liable to retire by rotation.

The Board of Directors in its meeting held on April 28, 2026, based on the recommendation of Nomination, Remuneration and Compensation Committee, have proposed to the shareholders the re-appointment of Mr. Ravi Venkatraman (DIN: 00307328) as an Independent Director of the Company for a second term of 5 consecutive years w.e.f. July 5, 2026 till July 4, 2031. Resolution seeking shareholders approval for above appointment and detailed profiles of Mr. Venkatraman forms part of the Notice convening the 33rd Extra - Ordinary General Meeting of the Company.

(b) Resignation, Removal, Vacation of Office or Change of Designation of Director(s)

During the year under review, there has been no resignation, removal, vacation of office or change of designation of any of the Directors of the Company.

(c) Change in Nominee Director and Retirement by Rotation

The Company received a request to appoint Mr. Mohamed Al Mubarak in place of Mr. Luca Molinari as a nominee of Alpha Investment Company LLC ("AIC"), one of the shareholders, pursuant to the Shareholders Agreement dated March 6, 2024 read with Articles of Association of the Company. The Board has, based on the recommendation from the Nomination, Remuneration and Compensation Committee, at its meeting held on April 28, 2026, approved the appointment of Mr. Mohamed Al Mubarak (as an Additional Director, categorized as a Non-Executive Director) in place of Mr. Luca Molinari as a nominee of AIC ("Change in AIC Director").

The effective date for Change in AIC Director would be the date of allotment of Director Identification Number to Mr. Mubarak by the concerned authority and obtaining necessary regulatory approval by the Company for the Change in AIC Director, whichever is later ("Effective Date of Change in AIC Director").

Pursuant to the provisions of Section 152 of the Companies Act, 2013, not less than two-thirds of the total number of Directors of a public company should be the be persons whose period of office is liable to determination by retirement of Directors by rotation; and be appointed by the company in general meeting. One third of such rotational directors, for the time being are liable to retire by rotation, shall retire from office at every annual general meeting. The directors to retire by rotation at every annual general meeting should be those who have been longest in office since their last appointment.

Among the directors liable to retire by rotation, Mr. Narendra Ostawal (DIN: 06530414) and Mr. Luca Molinari (DIN: 10615114) have been the longest in office since their last appointment. Your Board has recommended the re-appointment of Mr. Narendra Ostawal (DIN: 06530414), non-executive director at the 33rd Annual General Meeting ("AGM"). Additionally, keeping in mind the aforesaid development w.r.t. the Change in AIC Director and at the same time to comply with provisions of the Act, depending on the Effective Date of the Change in AIC Director, the Board has recommended the re-appointment of either Mr. Luca Molinari (DIN: 10615114), non-executive director, or Mr. Amit Gainda (DIN: 09494847), Managing Director & CEO at the AGM. All above directors are eligible and have offered themselves for re-appointment at the AGM. Detailed profiles of Mr. Ostawal, Mr. Molinari and Mr. Gainda are provided in the notice convening the ensuing AGM.

(iii) Declaration by Independent Directors

All Independent Directors have submitted their declaration of independence pursuant to the applicable provisions of the Act and the SEBI Listing Regulations, confirming that they continue to meet the criteria of independence, as provided under the Act and the SEBI Listing Regulations.

Further, all the Independent Directors of the Company have registered themselves with the data bank of Independent Directors created and maintained by the Indian Institute of Corporate Affairs ("IICA"), Manesar.

Your Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and that they hold highest standards of integrity.

(iv) Fit and Proper Criteria

All the directors of your Company have confirmed that they satisfy the fit and proper criteria as prescribed under the RBI (NonBanking Financial Companies - Governance) Directions, 2025, as amended from time to time. The directors have also confirmed that they have neither incurred any disqualification referred to in Section 164 of the Act for being director of the Company nor have attracted any criteria prescribed in Section 167(1) of the Act which could lead to vacation of their office as director.

(v) Key Managerial Personnel

During the year under review, Mr. Vikrant Gandhi, Chief Financial Officer of the Company, has tendered his resignation to pursue alternate career opportunities outside the Company with effect from the close of business hours of March 4, 2026. The Board has appointed, based on the recommendation of the Nomination, Remuneration and Compensation Committee, appointed Mr. Shailendra Dhupiya as the Chief Financial Officer of the Company with effect from March 5, 2026.

In terms of Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Amit Gainda, Managing Director & CEO, Mr. Shailendra Dhupiya, Chief Financial Officer and Mr. Rajesh Gandhi, Company Secretary are the key managerial personnel of the Company as on March 31, 2026.

23. Annual Performance Evaluation of the Board and Familiarisation of the Independent Directors

(a) Annual Performance Evaluation of the Board

The evaluation framework for assessing the performance of the directors of the Company comprises, amongst others, contributions made by them at the meeting(s) and strategic perspectives or inputs provided by them regarding the performance, governance and controls of the Company.

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board carried out an annual evaluation of its own performance, its Committees and individual directors for the Financial Year. For the above purpose, a formal mechanism has been adopted for evaluating the performance of the Board, its Committees, individual directors and the Chairman of the Board. The evaluation is based on criteria, which include, amongst others, providing strategic perspective, time devoted and preparedness for meetings, quality, quantity and timeliness of the flow of information between the Board Members and the Management, contribution at the meetings, effective decision-making ability, role and effectiveness of the Committees, etc. The directors duly completed and submitted, in an anonymous manner, the questionnaires providing feedback on functioning of the Board as a whole, committees and Chairman of the Board.

The performance of the non-independent directors, the Board, as a whole, and the committees of the Board has been evaluated by Independent Directors in a separate meeting. At the same meeting, the Independent directors also evaluated the performance of the Chairperson of the Board, after taking into account, the view of executive director and non-executive directors. Evaluation as done by the Independent Directors was submitted to the Board.

Thereafter, the Board at its meeting discussed the performance of the Board, as a whole, its committees and individual directors. The expressed satisfaction on the overall functioning of the Board and its committees. The Board was also satisfied with the contribution of the directors in their respective capacities, which reflected the overall engagement of the individual directors. The Board also expressed its full faith in the Chairperson for leading the Board.

(b) Familiarisation of the Independent Directors

Your Company conducts a routine familiarisation programme for its Independent directors through various modes and channels as per the Board approved Familiarization Programme for its Independent directors. A copy of the said programme, along with the details of such programme imparted, is available on the website of the Company at https://www.avanse.com/pdf/corporate- governance/19.%20Familiarisation%20programme%20for%20Independent%20Directors.pdf

24. Directors and Officers Liability Insurance Policy ("D&O Policy")

Your Company has obtained a D&O Policy which is duly reviewed and renewed every year. The said policy covers employees and directors (including Independent directors) of the Company.

25. Policies and Code:

In terms of the applicable provisions of the RBI Master Directions, circulars / regulations / guidelines issued by SEBI, including SEBI Listing Regulations, provisions of the Act and other applicable laws and as a part of good corporate governance to ensure strong internal controls, the Board adopted several codes / policies / guidelines and reviewed the same from time to time, which amongst others include the following:

(a) Internal Guidelines of Corporate Governance

I n terms of the RBI (Non-Banking Financial Companies - Governance) Directions, 2026, as amended from time to time, your Company has put in place a Board approved Internal Guidelines of Corporate Governance and the same can be accessed from the website of the Company at https://www.avanse.com/pdf/corporate-governance/Corporate Governance Code new.pdf

(b) Code of Conduct for the Board and Senior Management Personnel ("SMPs")

Pursuant to the applicable provisions of the SEBI Listing Regulations, the Company has adopted a Code of Conduct for the Board of Directors and the SMPs of the Company. The Code provides guidance to the Board and SMPs on the matters relating to professional conduct, ethics and governance. The Code can be accessed from the website of the Company at https://www.avanse.com/pdf/ corporate-governance/Code of conduct for Board and SMPs.pdf

(c) Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, the SEBI Listing Regulations and RBI guidelines, the Company has adopted a Whistle Blower Policy, which provides for a vigil mechanism that encourages and supports its directors and employees to report instances of unethical behaviour, actual or suspected fraud or violation of the Companys policies etc. It also provides for adequate safeguards against victimisation of persons who use this mechanism and direct access to the Chairperson of the Audit Committee in exceptional cases. The Whistle Blower Policy is available on the Companys website at https://www.avanse.com/pdf/corporate-governance/Whistle%20Blower%20Policy.pdf

During the year under review, no person was denied access to the Audit Committee to express concerns or reporting grievances under the Whistle Blower Policy / Vigil Mechanism.

(d) Remuneration Policy

Your Company has adopted a Nomination, Remuneration, Succession and Evaluation Policy. The same forms part of this Annual Report and is attached as "Annexure IV". The same is also available on the website of the Company at https://www.avanse.com/ pdf/corporate-governance/Nomination%20and%20Remuneration%20Policy.pdf

(e) Policy on Prevention of Sexual Harassment of Women at Workplace

Your Company has in place a policy which is in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has also complied with the provisions relating to the constitution of an Internal Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy. There were no open complaints at the beginning of the year under review. During the year under review, the Company received two complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All the complaints were resolved and there were no open complaints at the end of the year under review.

26. Corporate Social Responsibility ("CSR")

The Company believes in integrating its business model with the social welfare of people and the society in which it operates. Towards this objective and pursuant to the provisions of the Act, the Company has constituted a CSR Committee, the details of which is provided in the Annual Report on CSR activities which is attached as Annexure V of this report. Further, the Board has also approved a CSR Policy for the Company, copy of which is available on the Companys website at https://www.avanse.com/pdf/corporate-governance/ Corporate Social Responsibility Policy new.pdf

The Chief Financial Officer has certified that the funds disbursed were utilised for the purpose and in the manner approved by the Board for the Financial Year 2025-26.

27. Particulars of Loans Given, Investments Made, Guarantees Given or Security Provided

During the year under review, the Company did not make any investment, give guarantee or provide security which is required to be disclosed pursuant to Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014.

28. Contracts or Arrangements with Related Parties

During the year under review, majority of the contracts, transactions and arrangements entered into by the Company with related parties ("Related Party Transactions" or "RPTs") were in the ordinary course of business and all such RPTs were on arms length basis. None of the RPTs were considered material as per the provisions of Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and the SEBI Listing Regulations and the Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions of the Company.

A copy of the said policy is available on the Companys website at https://www.avanse. com/pdf/corporate-governance/Policy%20on%20Materiality%20of%20RPT%20and%20Dealing%20with%20RPT.pdf During the year under review, your Board approved transactions which were not in the ordinary course of business pursuant to Section 188 of the Act, the details of which are disclosed in Form No. AOC-2 pursuant to Section 134(3)(h) of the Act, read with the Rule 8 of the Companies (Accounts of Companies) Rules, 2014 and annexed as "Annexure VI". Since there were no material transactions entered into with related parties during the period under review, there was no question of any potential or real conflict with the interest of the Company.

Prior approval of the Audit Committee is obtained for all RPTs including omnibus approval for transactions which are of repetitive in nature. A statement on RPTs, specifying the details of such transactions, is placed before the Audit Committee on a quarterly basis. Further, the details of RPTs during the year under review are also given in the notes to the Financial Statements, which forms part of this Annual Report.

29. Corporate Governance Report

Your directors re-affirm their continued commitment to the best practices of Corporate Governance. Corporate Governance principles forms an integral part of the core values of the Company. Your Company is in compliance with the provisions relating to Corporate Governance. A Report on Corporate Governance of the Company as stipulated under the SEBI Listing Regulations and applicable RBI guidelines forms an integral part of this report and annexed as "Annexure VII". A certificate from a firm of Practicing Company Secretary on compliances with the requirements of Corporate Governance, as stipulated under the SEBI Listing Regulations, forms part of this Annual Report.

30. Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review is presented as a separate section, which forms part of this Annual Report.

31. Directors Responsibility Statement

Pursuant to Section 134(5) of the Act and to the best of their knowledge and belief and according to the information and explanations obtained from the operating management, Directors of the Company state that: -

a) in the preparation of the annual accounts for the year ended March 31, 2026, the applicable Accounting Standards were followed and there were no material departures from the same;

b) the directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2026, and of the profit of the Company for that period;

c) proper and sufficient care was 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) the annual accounts of the Company have been prepared on a "going concern basis";

e) proper systems to ensure compliance with the provisions of the applicable laws are in place and the same are adequate and operating effectively.

32. Compliance with Secretarial Standards

The Company is in compliance with the applicable secretarial standards viz. Secretarial Standards on Meetings of the Board of Directors and the Secretarial Standards on General Meetings issued by the Institute of Company Secretaries of India.

33. Code for Prohibition of Insider Trading

Pursuant to the SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has a Board approved policy for Prevention of Insider Trading and Fair Disclosure of Unpublished Price Sensitive Information. The said policy is available on the website of the Company at https://www.avanse.com/pdf/corporate-governance/PIT%20Policy%20-%20Final%20v4.pdf

34. Other Disclosures

In terms of applicable provisions of the Act and the SEBI Listing Regulations, the Company discloses and confirms that during the year under review:

(i) there was no issue of shares (including sweat equity shares) to employees of the Company under the ESOP Schemes referred to in this report;

(ii) there was no scheme for provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;

(iii) except the issue of CCPS on a rights basis, there was no public issue, bonus issue or rights issue of any securities by the Company;

(iv) there was no issue of shares with differential rights;

(v) there was no transfer of unpaid or unclaimed amount to Investor Education and Protection Fund;

(vi) no significant or material orders were passed by any regulators or Honble Courts or Tribunals which impact the going concern status and Companys operations in the future;

(vii) there were no proceedings for the Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 against the Company;

(viii) there was no failure to implement any corporate action;

(ix) there was no instance of one-time settlement with any Bank or Financial Institution;

(x) there were no revisions in the Financial Statements;

(xi) the Managing Director & CEO of the Company has neither received any commission from the Company nor received any remuneration or commission from the subsidiary company and hence the disclosure under Section 197(14) is not applicable;

(xii) The Company has in place various Board approved policies pursuant to Act, SEBI Listing Regulation and RBI Guidelines. These policies are reviewed from time to time keeping in view the operational requirements and the extant regulations; and

(xiii) The Company has complied with the provisions relating to the Maternity Benefit Act, 1961.

35. Acknowledgements

Your Directors take this opportunity to express their appreciation for the support and co-operation extended by its customers, various partners and associates, regulators, Companys Bankers and other Lenders and Shareholders. The Board also places on record its deep appreciation for the dedication and commitment of the employees at all levels for their exemplary contribution made in the growth of the Company.

For and on behalf of the Board of Directors
Neeraj Swaroop	Amit Gainda
Chairperson and Independent Director	Managing Director and CEO
(DIN: 00061170)	(DIN: 09494847)
Place: Mumbai
Date: April 28, 2026