Directors Report of Indostar Capital Finance Ltd.

Mar 31, 2025

Your Directors are pleased to present the 16^th Annual Report on the affairs of your Company together with the
audited financial statements for the financial year ended March 31, 2025.

FINANCIAL HIGHLIGHTS

The key highlights of the audited standalone financial statements of your Company for the financial year ended
March 31, 2025 and comparison with the previous financial year ended March 31, 2024 are summarized below:

('' In crore)

Particulars	Standalone
	March 31, 2025	March 31, 2024
Total income	1,412.42	1,125.23
Total expenditure	1,359.82	1,053.62
Profit/(loss) before taxation	52.59	71.61
Less: Provision for taxation
- Current tax	-	-
- Deferred tax asset	-	-
- Tax of earlier years	-	-
Net profit/(loss) after taxes	52.59	71.61
Other comprehensive income, net of tax	0.69	(0.24)
Total comprehensive income	51.90	71.38
Transfer to statutory reserve fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934	(10.52)	(14.32)
Appropriation towards dividend and dividend distribution tax	-	-
Surplus in the statement of profit and loss	41.38	57.06
Balance brought forward from previous period	(322.64)	(379.70)
Balance carried to balance sheet	(281.26)	(322.64)
Earnings per share (Face Value ? 10/- each)
Basic (?)	3.86	5.26
Diluted (?)	3.74	5.26

FINANCIAL PERFORMANCE AND COMPANY’S
STATE OF AFFAIRS

The financial highlights tabulated above are based
on the requirement of the Reserve Bank of India
(“RBI”) Master Direction - Reserve Bank of India
(Non-Banking Financial Company -Scale Based
Regulation) Directions, 2023, the circulars, directions,
notifications issued by the RBI from time to time (“RBI
Directions”) and provisions of the Companies Act,
2013 (the “Act”) read with Rules made thereunder.
For details of Reserves and Surplus of the Company,
please refer Note 22 of the audited standalone
financial statements of the Company for the financial
year ended March 31, 2025.

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

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

In terms of the Dividend Distribution Policy of the
Company, dividend shall be declared / recommended
on the equity shares of the Company, keeping in view
the Company''s objective of meeting the long-term
capital requirement for the business from internal cash
accruals and appropriately rewarding shareholders.
Details of the Dividend Distribution Policy have
been provided in the Corporate Governance Report

which is annexed to and forms an integral part of this
Board''s Report and is also available on the website
of the Company at https://www.indostarcapital.com/
investors-corner#investor-services.

Due to carry forward losses of previous years and
unavailability of sufficient profits of the current year,
directors do not recommend any dividend for the
financial year under review.

ACCOUNTING METHODS

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

In terms of Section 129 of the Act read with Rules
framed thereunder, audited consolidated financial
statements of the Company and its subsidiaries shall
be laid before the ensuing Annual General Meeting
of the Company along with the audited standalone
financial statements of the Company for the financial
year ended March 31, 2025.

The audited standalone and consolidated financial
statements together with Auditor''s Report(s)
thereon along with the salient features of the financial
statements of the subsidiaries of the Company in the
prescribed Form AOC - 1 forms part of the Annual
Report and are also available on the website of
the Company at https://www.indostarcapital.com/
investors-corner#investor-relations.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

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

Further, pursuant to the provisions of Section 186(4)
of the Act, the details of investments made by the
Company are given in the Note 06 of the audited
standalone financial statements.

SUBSIDIARY COMPANIES & THEIR FINANCIAL
PERFORMANCE

As on March 31, 2025, the Company had 2 (two)
wholly-owned subsidiaries namely, Niwas Housing
Finance Private Limited (erstwhile IndoStar Home
Finance Private Limited) (“NHFPL”) and IndoStar
Asset Advisory Private Limited (“IAAPL”). The
Company does not have any joint venture(s) /

associate company(ies) within the meaning of
Section 2(6) of the Act.

During the year under review, there has been no
change in the nature of business of the subsidiary
companies and there were no additions / deletions
in the number of subsidiaries of your Company.
However, the Board of Directors at its meeting held on
September 19, 2024 had approved the sale of shares
held by the Company in NHFPL to WITKOPEEND
B.V. an affiliate of BPEA EQT Mid-Market Growth
Partnership (“EQT”) and the same was approved by
the shareholders of the Company via. postal ballot on
October 26, 2024.

Pursuant to the necessary approvals being received,
the Company sold 45,00,00,000 equity shares of ? 10/-
each held by it in NHFPL (i.e., 100% of shareholding”)
to WITKOPEEND B.V. at a consideration of ? 37.91
per share and accordingly, NHFPL ceased to be the
subsidiary of the Company w.e.f. July 17, 2025.

The audited standalone financial statements of each
of the subsidiaries are available on the website of
the Company at https://www.indostarcapital.com/
investors-corner. Members interested in obtaining a
copy of the audited standalone financial statements
of the subsidiaries may write to the Company
Secretary at the Registered & Corporate Office of
the Company or at investor. relations@indostarcapital.
com. The Company''s policy for determination
of material subsidiary, as adopted by the Board
of Directors, in conformity with regulation 16 of
the Listing Regulations, can be accessed on the
Company''s website at https://www.indostarcapital.
com/investors-corner#investor-relations. In terms
of the said policy NHFPL continue to be a material
subsidiary of the Company during the financial year
2024-25.

Further, pursuant to the requirement of appointing
an Independent Director of the Company on the
board of directors of NHFPL in terms of explanation
to Regulation 24(1) of the Listing Regulations, Ms.
Naina Krishna Murthy, Independent Director of
the Company, was appointed as the Independent
Director on the Board of NHFPL w.e.f. April 22, 2024.

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

During the year under review, the Company issued and allotted 18,152 equity shares to its eligible employees
under the Company''s Employees'' Stock Option Plan 2016 and 2018. As a result, the issued, subscribed and paid-
up equity share capital of the Company increased from 1,36,07,92,950 (comprising 1,36,07,92,95 equity shares
of the face value of 10/- each) to 1,36,09,74,470 (comprising 13,60,97,447 equity shares of the face value of 10/-
each). The equity shares issued under the Employees'' Stock Option Scheme ranks pari-passu with the existing
equity shares of the Company.

Issue and allotment of convertible warrants

On March 22, 2024, your company via special resolutions passed at the Extra Ordinary General Meeting of the
Company approved the issuance of convertible warrants on a preferential basis and accordingly the following
allotments were made during the year under review:

Sr. No	Name of allottee	Date of allotment	Category of Allottee	No. of warrants	Price per warrant	Total consideration received
1	Florintree Tecserv LLP	May 26, 2024	Non-Promoter Entity	1,08,69,565	'' 184	'' 49,99,99,990*
2.	BCP Multiple Holdings Pte. Ltd.	November 26, 2024	Promoter Entity	1,39,49,323	'' 184	'' 2,05,33,40,346#

*25% of the total consideration. Balance 75% to be received upon conversion of warrants into Equity shares.
#80% of the total consideration. Balance 20% to be received upon conversion of warrants into Equity shares.

Niwas Housing Finance Private Limited (erstwhile
IndoStar Home Finance Private Limited) ("NHFPL”)

NHFPL is registered with the National Housing Bank
as a housing finance company without accepting
public deposits and primarily focuses on providing
affordable home finance. NHFPL commenced
business operations in mid of 2017 and has built a
quality and profitable portfolio of over '' 3,091 crore
as on March 31, 2025. NHFPL operates in 9 states
and 1 Union Territory across India through various
branches and has an employee base of over 1,454
employees as on March 31, 2025.

During the year under review, the total income of
NHFPL was '' 409.08 crore (previous year: '' 290.43
crore). The operations of NHFPL during the year
under review has resulted in profit after tax of '' 67.76
crore (previous year: '' 44.10 crore). The other key
performance indicators of NHFPL are: (a) Return on
Assets: 3.30% (b) Capital to Risk Weighted Assets
Ratio: 49.80% (c) Debt-Equity Ratio: 3.43:1; (d) Assets
Under Management: '' 3,091 crore which is 36% YoY
growth (previous year: 2,270 crore which is 40% YoY
growth); (e) Disbursements: '' 1,208 crore (previous
year: '' 937 crore); (f) Gross Stage 3 assets: 1.35%; and
(g) Cash & cash equivalent including undrawn lines:
'' 401.13 crore (previous year: '' 397 crore).

During the year, Insurance Regulatory and
Development Authority of India (“IRDAI”) had
granted a license dated August 19, 2024 to NHFPL to
act as composite corporate agent for solicitation and
procurement of insurance business for life insurers,
general insurers and health insurers as specified
under IRDAI Regulations.

Further, w.e.f. November 22, 2024, name was changed
from “IndoStar Home Finance Private Limited” to
“Niwas Housing Finance Private Limited”.

IndoStar Asset Advisory Private Limited (“IAAPL”)

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

During the year under review, the total income of
IAAPL was '' 0.24 crore (previous year: '' 0.19 crore)
and the Profit after tax was '' 0.17 crore (previous
year: loss after tax was '' 0.12 crore).

MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT (“BRSR”)

Pursuant to Regulation 34 of the Listing Regulations,
detailed BRSR report, in the format as prescribed
by Securities and Exchange Board of India (“SEBI”),
describing various initiatives taken by the Company
towards the environmental, social and governance
aspects is annexed as a part of this Report as
Annexure V and is also available on the website of
the Company at https://www.indostarcapital.com/
investors-corner#investor-relations.

REPORT ON CORPORATE GOVERNANCE

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

The Managing Director and the Chief Financial
Officer have certified to the Board in relation to the
financial statements and other matters as specified in
the Listing Regulations.

A certificate from M/s. Mehta and Mehta, Practicing
Company Secretaries, with respect to compliance
with the conditions of Corporate Governance as
prescribed under the Listing Regulations is annexed
to the Corporate Governance Report.

SHARE CAPITAL
Authorized Share Capital

The Authorized Share Capital of the Company stood
at '' 200,00,00,000 (Indian Rupees Two Hundred
crore Only) divided into (a) 18,75,00,000 (eighteen
crore seventy five lakhs) equity shares of '' 10 (Indian
Rupees Ten only) each, amounting to '' 1,87,50,00,000
(Indian Rupees One Hundred Eighty Seven Crores
Fifty Lakhs only); and (b) 1,25,00,000 (One Crore
Twenty Five Lakh) preference shares of '' 10 (Indian
Rupees Ten only) each, amounting to 12,50,00,000
(Indian Rupees Twelve Crore Fifty Lakh Only).

Issued, Subscribed and Paid-up Share Capital

As on March 31, 2025, the issued, subscribed and
paid-up share capital of the Company stood at
'' 1,36,09,74,470 divided into 13,60,97,447 equity
shares of '' 10 each.

Utilisation of funds raised through issue of
convertible warrants:

The total fund raised through issue of convertible
warrants as stated above were utilized and deployed
towards growth objectives of the Company, including
to augment the Company''s capital base, for onward
lending by way of disbursement of loans to borrowers
in the ordinary course of the Company''s businesses,
in accordance with objects stated in the Letter of
Offer issued by the Company.

As on March 31, 2025, there were no unutilized funds
lying in the account of the Company.

DEPOSITS

The Company has not accepted any public deposits
during the year under review and shall not accept
any deposits from the public without obtaining prior
approval of the RBI. Further, the Company being an
NBFC, the disclosure requirements under Chapter V
of the Act read with Rule 8(5)(v) and 8(5)(vi) of the
Companies (Accounts) Rules, 2014 are not applicable
to the Company.

RESOURCES AND LIQUIDITY

The Company has diversified funding sources
including public sector banks, private sector banks,
mutual funds, insurance companies and financial
institutions. Funds were raised through various
modes including bank borrowings, issuance of non¬
convertible debentures on private placement basis
as well as public issue of non-convertible debentures,
issue of commercial papers, issue of convertible

warrants and sale / assignment / securitization of
loan assets of the Company etc.

During the year under review, your Company
continued with its diverse methods of sourcing
funds including borrowing through Secured and
Unsecured Debentures, Term Loans, Pass Through
Certificate (PTC) Borrowings, Commercial Papers,
etc. and maintained a prudent Asset Liability
match throughout the year. Leveraging its long¬
standing relationships with lenders, investors and
intermediaries, the Company effectively managed its
cost of funds despite the challenging liquidity and
interest rate environment. The Company sourced
long-term debentures and loans from banks and
other institutions at competitive interest rates without
compromising the right mix of long and short-term
borrowings, thereby maintaining a healthy asset
liability position. The Company continues to expand
its borrowing profile by tapping into new lenders and
geographies.

The Company continued to receive support for
its money market issuances from banks through
subscription of Commercial Papers (CPs) and
Nonconvertible Debentures (NCDs), and for

securitisation through investment in PTCs. The
Company maintained strong relationship with all
lending banks, which supported the borrowing plan
for the financial year 2024-25.

The Company successfully launched its
maiden public issue of Secured Redeemable
NCDs in September 2024. The issue aimed

to raise ''300 crore, with a base issue size of
'' 150 crore and an option to retain oversubscription
up to another '' 150 crore. The issue was subscribed
to the extent of '' 265.59 crore.

Securitisation

During the year under review, the Company
successfully completed eight securitisation
transactions through investment in PTCs aggregating
to '' 1,016.94 crore (Previous year '' 1,113.29 crore).

Non-Convertible Debentures (“NCDs”)

During the year under review, your Company raised
an aggregate of '' 1,155.59 crore through issuance of
NCDs as detailed hereunder:

1. Private Placement: '' 890.00 crore was raised
though issuance of secured, redeemable NCDs
on private placement basis (previous year:
'' 2,455 crore).

2. Public Issue: '' 265.59 crore was raised through the
maiden public issuance of Secured Redeemable
NCDs.

As specified in the respective offer documents, the
funds raised from issuance of NCDs were utilised for
various financing activities including onward lending,
repayment of existing indebtedness, working capital
requirements and other general corporate purposes
of the Company. Till the pending utilization of funds
for stated purpose, the funds were temporarily
invested in mutual funds/Banks FDs/ maintained a
balance in current accounts. Details of the end-use
of funds were furnished to the Audit Committee on
a quarterly basis. The NCDs are listed on the debt
market segment of BSE Limited.

Commercial Paper

As at March 31, 2025, the Company had Commercial
Paper (“CPs”) with an outstanding amount (face
value) of '' 535 crore (previous year: '' 660 crore). CPs
constituted approximately 8.41 % of the outstanding
borrowings as at March 31, 2025. The CPs of the
Company are listed on the debt market segment of
the BSE Limited.

Bank Borrowings (Term Loans)

During the year, your Company has borrowed an
aggregate of '' 1,865 crore (previous year: '' 762.50
crore) through bank borrowings with an outstanding
of '' 1,956 crore as on March 31, 2025.

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

CREDIT RATING(S)

Credit Ratings assigned to the Company as on March
31, 2025 is summarized below:

Particulars / Rating Agencies	Rating	Remarks
Long Term:
• Debt Programme
CARE Ratings Limited	CARE AA(-)	Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
CRISIL Ratings Limited	CRISIL AA(-)
• Market Linked Debentures
CARE Ratings Limited	CARE PP-MLD AA(-)	Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
• Short Term Debt Programme / Commercial Paper:
CRISIL Ratings Limited	CRISIL A1( )	Securities with this rating are considered to have very strong degree of safety regarding timely servicing of financial obligations. Such securities carry very lowest credit risk.
CARE Ratings Limited	CARE A1( )

During the year under review, CARE Ratings Limited
did not revise the ratings and retained the same
ratings as earlier assigned to the long-term or short¬
term debts.

During the year under review, while CRISIL did not
revise the long-term or short-term rating and retained
them at CRISIL AA- and CRISIL A1 respectively;
while it removed “Negative” outlook and assigned
“Stable” outlook.

DEBT EQUITY RATIO

Your Company''s Debt Equity ratio as on March 31,
2025 stood at 2.03 times.

CAPITAL ADEQUACY RATIO

Your Company is well capitalized to provide adequate
capital for its continued growth. As on March 31, 2025,

the Capital to Risk Assets Ratio (“CRAR”) of your
Company stood at 28.46% well above the regulatory
limit of 15% as prescribed by the RBI for NBFCs.

NET OWNED FUNDS

The Net Owned Funds of your Company as on March
31, 2025 stood at '' 2,299.65 crore (previous year:
'' 1,741.26 crore).

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At present, the Board of Directors of your Company
comprises 8 (eight) Directors of which 3 (three)
are Non-Executive Independent Directors, of whom
2 (two) are Woman Director, 4 (four) are Non¬
Executive Non-Independent Directors and 1 (one) is
Executive Director. The Chairperson of the Board of
Directors is a Non-Executive Independent Director.
The Board composition is in compliance with the
requirements of the Act, the Listing Regulations and
the RBI Directions. Detailed composition of the Board
of Directors of the Company has been provided in
the Corporate Governance Report which is annexed
to and forms an integral part of this Board''s Report.

Appointment and Cessation:

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

During the year under review, the Board of Directors,
upon recommendation of the NRC , at their meeting
held on May 13, 2024, approved and recommended
appointment of Mr. Randhir Singh as the Whole
Time Director and Executive Vice Chairman of the
Company to the shareholders of the Company. The
shareholders approved the appointment of Mr. Randhir
Singh as the Whole Time Director and Executive Vice
Chairman by passing a special resolution through
postal ballot on June 28, 2024 effective from the
date as may be decided by the Board of Directors/its
committee. Mr. Randhir Singh assumed office as the
Whole Time Director and Executive Vice Chairman of
the Company with effect from July 22, 2024.

Mr. Bobby Parikh, Non-Executive Independent
Director and Chairman completed his second term of
5 years as an Independent Director in the Company on
March 04, 2025. Considering the valuable contribution
made by Mr. Parikh towards the growth and success

of the Company and his profound understanding of
the Company''s operations, the regulatory framework
governing its activities, and extensive experience
in the financial services sector, Mr. Parikh was
thereafter appointed as the Non-Executive Director
of the Company with effect from March 05, 2025.
Following the completion of Mr. Parikh''s tenure as an
Independent Director and Chairman of the Company,
the Board of the Company consisted of only 2
Independent Directors, as against the requirement
of a minimum of one-third of the Board of Directors
being independent. After identifying and shortlisting
suitable candidates and conducting proper due
diligence process, the Company appointed Ms.
Sujatha Mohan (DIN: 10743626) as an Independent
Director w.e.f. April 21, 2025 and the Company has
since been in compliance with Regulation 17(1) (b) of
the Listing Regulations.

Consequent to expiry of term of Mr. Parikh as
Independent Director and Chairman of the Company,
Ms. Naina Krishna Murthy (DIN: 01216114) was
appointed as Chairperson of the Board of Directors
effective from March 05, 2025.

During the year under review Mr. Vibhor Kumar
Talreja (DIN: 08768297), Non-Executive Director of
the Company resigned from the position of Director
w.e.f. March 03, 2025.

Mr. Vinodkumar Panicker ceased to be the Chief
Financial Officer pursuant to his retirement effective
March 03, 2025. Subsequently, Mr. Jayesh Jain was
appointed as Chief Financial Officer of the Company
effective the same date.

Mr. Karthikeyan Srinivasan, (DIN: 10056556) resigned
from his role as Whole-Time Director & Chief Executive
Officer with effect from May 11, 2025 and Mr. Randhir
Singh was re-designated and appointed as Managing
Director designated as Executive Vice Chairman of
the Company, not liable to retire by rotation, with
effect from May 11, 2025. He will continue in this role
untill the end of his current term till July 21, 2029.

Director(s) Retiring by Rotation

In terms of Section 152(6) of the Act read with the
Articles of Association of the Company, Mr. Devdutt
Marathe (DIN: 10294876), shall retire by rotation
and being eligible, have offered himself for re¬
appointment at the ensuing Annual General Meeting
of the Company. Brief profile of Mr. Devdutt Marathe
have been included in the notice convening the
ensuing Annual General Meeting.

Re-appointment of Independent Directors

None of the Independent Director(s) on the Board of
Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

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

Appointment of Independent Director(s)

The Nomination and Remuneration Committee
(“NRC”) after considering, (i) the relevant skills,
background and experience, (ii) declaration/
disclosure/consents received and (iii) after ensuring
“fit and proper” status, recommended to the Board
appointment Ms. Sujata Mohan (DIN: 10743626) as
an Independent Director of the Company for a term
of five years in terms of Section 149(10) of the Act.
The Board unanimously endorsed the view of the
NRC and recommended to the Shareholders of the
Company, the appointment of Mr. Sujata Mohan as
an Independent Director of the Company, not liable
to retire by rotation, to hold office for a term of five
years, effective from April 21, 2025. On May 24, 2025,
the Shareholders of the Company, by way of a special
resolution passed through Postal Ballot conducted
through remote e-voting mode, approved the
appointment of Ms. Sujata Mohan as an Independent
Director of the Company for the above-mentioned
tenure.

The Board is of the opinion that Ms. Sujata Mohan
possess requisite qualifications, experience and
expertise and hold the highest standards of integrity
and her association would be of immense benefit and
value to the Company.

Director(s) Declaration and Disclosures

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

A certificate from H Choudhary & Associates,
Practicing Company Secretary, confirming that none
of the Directors on the Board of the Company as on
March 31, 2025 have been debarred or disqualified
from being appointed or continuing as Director on
the Board of the Company by SEBI, the Ministry of
Corporate Affairs or any such statutory authority,
forms part of the Governance Report which is annexed
to and forms an integral part of this Board''s Report.
Further, all the Directors meet the fit and proper
criteria stipulated under the RBI Master Directions, as
amended.

The Company has received the necessary declaration
from each Independent Director in accordance with
Section 149(7) of the Act and Regulations 16(1)(b) and

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

Key Managerial Personnel (“KMP”)

During the year under review, Mr. Randhir Singh was
appointed as Whole-Time Director designated as an
Executive Vice Chairman of the Company w.e.f. July
22, 2024 and was designated as a KMP on October
18, 2024. Mr. Jayesh Jain was appointed as the Chief
Financial Officer w.e.f. March 03, 2025 on retirement
of Mr. Vinodkumar Panicker from the office of Chief
Financial Officer.

On May 11, 2025, Mr. Karthikeyan Srinivasan resigned
from the designation of Chief Executive Officer and
Whole-Time Director and Mr. Randhir Singh was re¬
designated and appointed as Managing Director
designated as Executive Vice Chairman of the
Company.

Following are the KMPs of the Company as on date of
this Board''s Report:

Mr. Randhir Singh	Managing Director & Executive Vice Chairman
Mr. Jayesh Jain	Chief Financial Officer
Ms. Shikha Jain	Company Secretary &
	Compliance Officer

MEETINGS

The Board and Committees meet at regular intervals
inter-alia to discuss, review and consider various
matters including business performance, strategies,
policies and regulatory updates and impact. During
the year under review, the Board met 15 (fifteen)
times and several meetings of Committees including
the Audit Committee were held. Details with
respect to the meetings of the Board of Directors
and Committees held during the year under review,
including attendance by Directors / Members at
such meetings have been provided in the Corporate
Governance Report which is annexed to and forms an
integral part of this Board''s Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

In terms of provisions of Section 118 of the Act, your
Company is in compliance with Secretarial Standards
on Meetings of the Board of Directors (SS-1) and
Secretarial Standards on General Meeting (SS-2)
issued by the Institute of Company Secretaries of
India. Resolutions passed by circulation are duly
placed before the Board in the subsequent Meeting
and the text thereof is recorded in the minutes in
compliance with SS-1. However, in some cases, details
of dissent or abstention, if any, were not specifically
noted. The Company is committed to strengthening
its processes to ensure complete and continued
compliance.

BOARD COMMITTEES

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

The Board of Directors has amongst others,
constituted the following:

• Audit Committee

• Risk Management Committee

• Nomination & Remuneration Committee

• Asset Liability Management Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Customer Service Committee

• IT Strategy Committee

• IT Steering Committee

• Borrowing Committee (erstwhile Debenture
Committee)

• Management Committee

• Internal Complaints Committee(s)

• Banking Committee

• ESG Working Committee

• Disciplinary Committee

• Debt- Public Issue Committee

• New Product Committee

• Information Security Committee

• KYC AML Committee

• Review Committee

• Identification Committee

• Committee of Executives

Detailed note on the composition of the Board and
its committees, including its terms of reference
and meetings held are provided in the Corporate
Governance Report. The composition and terms of
reference of the Committees of the Board of the
Company is in line with the provisions of the Act, the
Listing Regulations and RBI Directions.

PERFORMANCE EVALUATION

In terms of the provisions of the Act and the Listing
Regulations, the Board of Directors adopted a Board
Performance Evaluation Policy to set out a formal
mechanism for evaluating performance of the Board,
that of its committee(s) and individual Directors
including the Chairperson. Additionally, in order to
outline detailed process and criteria to be considered
for performance evaluation, the Nomination &
Remuneration Committee (“NRC”) has put in place
the ''Performance Evaluation Process - Board,
Committees and Directors'', which forms an integral
part of the Board Performance Evaluation Policy.
The questionnaires for performance evaluation are
comprehensive and in alignment with the guidance
note on Board evaluation issued by the SEBI, vide
its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004
dated January 05, 2017 and are in line with the
criteria and methodology of performance evaluation
approved by the NRC.

In terms of the requirement of Schedule IV of the
Act and Regulation 25 of the Listing Regulations, a
separate meeting of the Independent Directors was
held on February 21, 2025 to review the performance
of the Board, Non-Independent Directors, Board
Committees, individual Directors and the Chairperson.

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

The Board of the Company was satisfied with the
functioning of the Board and its Committees. The
Committees are functioning well and besides covering
the Committees'' terms of reference, as mandated by
applicable laws, important issues were brought up
and discussed in the Committee Meetings. The Board
was also satisfied with the contribution of Directors
in their individual capacities. The Board has full faith
in the Chairperson leading the Board effectively and
ensuring participation and contribution from all the
Board Members.

An annual performance evaluation exercise was carried out in compliance with the applicable provisions of the
Act, Listing Regulations, the Company''s Code of Independent Directors and the criteria and methodology of
performance evaluation approved by the NRC as under:

Evaluating body	Evaluatee	Broad criteria and parameters of evaluation	Process of evaluation
The Board, the NRC and the Independent Directors	The Board as a whole	Review of fulfilment of Board''s responsibilities including strategic direction, financial reporting, risk management framework, ESG, grievance redressal, succession planning, knowledge of industry trends, diversity of Board etc. and feedback to improve Board''s effectiveness	Internal assessment through a structured and separate rating- based questionnaire for each of the evaluations. The evaluation is carried out on a secured online portal whereby the evaluators are able to submit their ratings and qualitative feedback, details of which are accessible only to the NRC Chairperson. The NRC also reviews the implementation and compliance of the evaluation exercise done annually. The results and outcome are evaluated, deliberated upon and noted by the Independent Directors, the NRC and the Board at their respective meetings.
The Board	The Committees of the Board (separately for each Committee)	Structure, composition, attendance and participation, meetings of Committees, effectiveness of the functions handled, independence of the Committee from the Board, contribution to decisions of the Board etc.
The Board, the NRC, and the Independent Directors	Independent Directors including those seeking re¬ appointment, Non-Independent Directors, and the Executive Directors (excluding the Director being evaluated)	Qualifications, experience, skills, independence criteria, integrity of the Directors, contribution and attendance at meetings, ability to function as a team and devote time, fulfilment of functions, ability to challenge views of others in a constructive manner, knowledge acquired with regard to the Company''s business, understanding of industry, fairness and transparency demonstrated, adequacy of resource staffing
The Board, the NRC and the Independent Directors	Chairman	Skills, expertise, effectiveness of leadership, effective engagement with other Board members during and outside meetings, allocation of time to other Board members at the meetings and ability to steer the m eeti ngs, com m itment, i mparti al i ty, ability to keep shareholders'' interests in mind, effective engagement with shareholders during general meetings etc.

Outcome and results of the performance evaluation

As on March 31, 2025, all the Directors of your
Company had participated in the evaluation process.
The Directors expressed their satisfaction with the
Annual performance evaluation process of Board
& Committees. The results of the Evaluation for
the year under review were shared with the Board,
Chairperson of respective Committees and individual
Directors.

It was noted that the meetings of the Board
and Committees are well managed in terms of
comprehensive updates sent well in advance,
constructive participation and deliberations at
the meeting led by the Chair, enabling Board and
Committees to fulfil their statutory / review role and
focus on Governance and Internal Controls. It was
also noted that the Company during the year under
review facilitated familiarisation on Prohibition of

Insider Trading Regulations and the other regular
updates were provided to the Board on all key
matters.

The results of Evaluation showed high level of
commitment and engagement of Board, its various
Committees and senior leadership. Based on the
outcome of the evaluation for the year under review,
the Board shall enhance its focus on providing
strategic direction, digital initiatives, oversee
regulatory matters and maintaining high standards
of governance, to enhance value for all stakeholders
while deepening its focus on ESG and risk
management. Based on the results of the evaluation,
the Board has agreed on an action plan to further
improve the effectiveness and functioning of the
Board. The suggestions from previous evaluations
were implemented by the Company during Financial
year 2024-25.

FAMILIARISATION PROGRAMME FOR

INDEPENDENT DIRECTORS

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

In terms of Regulation 46 of the Listing Regulations,
the details of familiarisation programmes imparted
to the Independent Directors during the year under
review including details of number of programmes
and number of hours spent by each Independent
Director are available on the website of the Company
at https://www.indostarcapital.com/investors-corner
#investor-services.

POLICY ON APPOINTMENT OF DIRECTORS AND
SENIOR MANAGEMENT PERSONNEL

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

During the year under review, the Board of Directors
approved amendment to the above Policy in order
to align the same with the Act, Listing Regulations
and RBI Directions. Details of the Policy on Selection
Criteria / “Fit & Proper” Person Criteria have been
provided in the Corporate Governance Report which
is annexed to and forms an integral part of this
Board''s Report and is also available on the website
of the Company at https://www.indostarcapital.com/
investors-corner#investor-services.

REMUNERATION POLICY, DISCLOSURE OF
REMUNERATION & PARTICULARS OF EMPLOYEES

Remuneration Policy

Your Company has also adopted the Policy on
Remuneration of Directors, Key Managerial Personnel,
Senior Management and other Employees of the
Company in accordance with the provisions of Sub¬
section (4) of Section 178 of the Act, RBI Directions
notified by the RBI and Listing Regulations.

During the year under review, the Policy on
Remuneration of Directors of the Company was
amended to, inter-alia, align with existing legal
provisions and introduce certain standard clauses.
Details of the Remuneration Policy have been
provided in the Corporate Governance Report
which is annexed to and forms an integral part of
this Board''s Report. The Remuneration Policy is also
available on the website of the Company at https://
www.indostarcapital.com/investors-corner#investor-
services.

Employee Remuneration

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

Statement containing details of employees as required
in terms of Section 197 of the Act read with Rule
5(2) and Rule 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, is available for inspection at the Registered &
Corporate Office of the Company during working
hours for a period of 21 days before the date of
the ensuing 16^th Annual General Meeting. A copy of
the statement may be obtained by shareholders by
writing to the Company Secretary at the Registered
& Corporate Office of the Company or at investor.
[email protected].

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

Details of remuneration paid to the directors of the
Company as required to be disclosed under clause
IV of Section II of Schedule V of the Act has been
provided in the Corporate Governance Report which
is annexed to and forms an integral part of this
Board''s Report.

EMPLOYEE STOCK OPTION PLANS (“ESOP PLANS")

Your Company believes that its success and ability
to achieve its objectives is largely determined by the
quality of its workforce and recognises that not only
good employment opportunities but also additional
motivating mechanisms are needed to incentivize
employees and aligning their interest with the
interest of the Company. In recognition of the said
objective, the Company adopted and implemented
IndoStar ESOP Plan 2012 (“ESOP 2012”), IndoStar
ESOP Plan 2016 (“ESOP 2016”), IndoStar ESOP Plan
2016-II (“ESOP 2016-II”), IndoStar ESOP Plan 2017
(“ESOP 2017”) and IndoStar ESOP Plan 2018 (“ESOP
2018”) (collectively referred to as “ESOP Plans”) to
attract, retain, motivate and incentivise employees of
the Company and its holding / subsidiary companies.
Pursuant to the special resolution passed through
Postal Ballot on June 28, 2024, the shareholders
of the Company approved the amendment to the
IndoStar ESOP Plan 2018 (“ESOP 2018”), to ensure
that the ESOP 2018 provides the NRC the flexibility to
customise the grant, vesting and exercise conditions
for the various levels of employees and those which
meet industry remuneration standards.

During the year under review, the Nomination and
Remuneration Committee (the “NRC”) has granted
7,47,424 stock options to the eligible employees of
the Company under the Company''s Employees'' Stock
Option Plan (the “ESOP”) under the different plans of
the Company. Further, the Board of Directors at its
meeting dated May 13, 2024 on the recommendation
of the NRC had approved grant of stock options equal
to or exceeding 1% (one percent) of issued capital of
the Company i.e., 17,00,000 options under IndoStar
ESOP Plan 2018 to Mr. Randhir Singh, Managing
Director and Executive Vice Chairman, the same was
also approved by the shareholders via postal ballot
on June 28, 2024.

The ESOP Plans of the Company are implemented
and administered by the NRC.

The Board of Directors confirms that the ESOP Plans
are in compliance with the provisions of the Act and
Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations,
2021, as amended (“SBEB & SE Regulations”) A
certificate from the Secretarial Auditors of the
Company confirming that the Scheme has been

implemented in accordance with SEBI SBEB
Regulations, is placed at the website of the Company
at https://www.indostarcapital.com/investors-

corner#investor-services.

The applicable disclosures as stipulated under
SBEB & SE Regulations for the year ended March 31,
2025, with regards to the ESOP Plans, is uploaded
on the Company''s website and can be accessed
at the https://www.indostarcapital.com/investors-
corner#investor-services.

AUDITORS

Statutory Auditors & their Report

In terms of the provisions of the Act and the guidelines
issued by RBI on April 27, 2021 for appointment of
statutory auditors for NBFCs, M S K A & Associates,
Chartered Accountants, (Firm registration no.
105047W), Mumbai were appointed as the Statutory
Auditors of the Company, for a period of three (3)
consecutive years from the conclusion of the 14^th
Annual General Meeting until the conclusion of the
17^th Annual General Meeting.

The Statutory Auditors have issued their unmodified
opinion, both on standalone and consolidated financial
statements, for the financial year ended March 31,
2025. They have not highlighted any qualifications,
reservations, adverse remarks or disclaimers. The
Statutory Auditors have not reported any incidents of
material fraud to the Audit Committee of the Board
during the financial year 2024-25. The notes to the
accounts referred to in the auditor''s report are self¬
explanatory and therefore do not call for any further
explanation and comments.

Secretarial Auditors & their Report

Pursuant to the requirements of Section 204(1) of the
Act read with Rule 9 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, the Company had appointed M/s. Mehta &
Mehta, Practicing Company Secretaries, to conduct
the Secretarial Audit for the financial year under
review.

The Secretarial Audit Report in Form MR-3 for
the financial year under review, as received from
M/s. Mehta & Mehta, Company Secretaries, is attached
as Annexure I to the Board''s Report.

M/s. Mehta & Mehta, Company Secretaries, in their
report on the secretarial audit of your Company
for the financial year ended March 31, 2025 have
submitted following remarks/qualifications:

1. As per Secretarial Standard -1, resolutions passed
by circulation shall be noted at a subsequent
Meeting of the Board and the text thereof with

dissent or abstention, if any, shall be recorded in
the Minutes of such Meeting. However, abstention
is not noted in board meeting.

2. Regulation 17(1) (b) of the Securities and
Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015
prescribes the requirement of having at least one-
third of the Board of Directors as Independent
Directors. However, the composition of the
Board is not duly constituted in the absence of
requisite number of Independent Directors.

3. The Company has failed to adhere to Regulation
19(2) of the Securities and Exchange Board
of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 by appointing
Ms. Naina Krishna Murthy as the Chairperson
of the Nomination & Remuneration Committee,
effective March 05, 2025. Who is also the
Chairperson the Board.

Director’s Response to the remarks/qualification in

Secretarial Audit Report:

1. The Company has noted the remark made and
has strengthen its processes and maker-checker
system in order to ensure compliance with the
applicable to laws/regulations/rules.

2. The Company was in compliance with the

provisions of Regulation 17(1) (b) of the

SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 (“Listing
Regulations”) until March 4, 2025. Consequent
to the expiry of the term of Mr. Bobby Parikh,
as Independent Director and Chairman of the
Company on March 4, 2025, the Board of the
Company consisted of only 2 Independent
Directors, as against the requirement of a
minimum of 1/3rd of the Board of Directors
being independent.

It is submitted that in order to ensure continued
compliance with Regulation 17(1) (b) and
considering the importance and criticality of
the position of Independent Director on the
Board, the Company had initiated the process
of identifying a suitable candidate well in
advance to the impending expiry of term of Mr.
Parikh on March 4, 2025. However, identifying
a qualified individual whose expertise and
experience aligned with the Company''s values
and principles and which could contribute
positively to the business of the Company and
its stakeholders took longer than as anticipated.
It may be noted that after identifying and
shortlisting suitable candidates and conducting
proper due diligence process, the Company

appointed Ms. Sujatha Mohan (DIN: 10743626)
as an Independent Director w.e.f. April 21, 2025
and the Company has since been in compliance
with Regulation 17(1) (b) of the Listing

Regulations.

3. Pursuant to expiry of term of Mr. Bobby Parikh
as Independent Director on March 4, 2025,
Ms. Naina Krishna Murthy, Independent Director
and having a relevant legal background, was
appointed as Chairperson of the Committee
for the time being, subsequently, the Board, at
its meeting held on April 29, 2025, again re¬
constituted the Committee by appointing Mr.
Hemant Kaul as a Member and Chairperson of
the Committee who is not the Chairperson of the
Board or the Company.In terms of Regulation
24A(2) of the Listing Regulations, Annual
Secretarial Compliance Report with respect to
all applicable compliances under regulations and
circulars / guidelines issued by the Securities
and Exchange Board of India from M/s. Mehta
& Mehta, Practicing Company Secretaries in
prescribed format for the financial year ended
March 31, 2025 has been submitted to the stock
exchanges.

A copy of the secretarial audit report for the financial
year 2024-25 issued to Niwas Housing Finance
Private Limited (Erstwhile IndoStar Home Finance
Private Limited), a material unlisted subsidiary of the
Company is attached as Annexure II to the Board''s
Report.

Pursuant to Regulation 24A of Listing Regulations,
the Board of Directors have recommended to the
shareholders for approval, the appointment of
M/s. Mehta & Mehta, Practicing Company Secretaries
as Secretarial Auditors of the Company for a term of
five (5) consecutive years, from 2025-26 to 2029-30.

Cost record 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.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In terms of Section 177(9) and Section 177(10) of
the Act and the Listing Regulations, the Board of
Directors adopted a Whistle Blower Policy and Vigil
Mechanism, inter-alia to provide a mechanism for
internal stakeholders of the Company and external
stakeholders including vendors, suppliers, consultants,
agents including the Directors, employees of the
Company to approach the Audit Committee of the
Company and to report genuine concerns related
to unethical behavior, actual or suspected fraud,
violation of any applicable laws, codes of conduct or
policies of the Company, any suspected misconduct/
illegal/ improper conduct and leak or suspected
leak of unpublished price sensitive information. The
Whistle Blower Policy and Vigil Mechanism provides
for adequate safeguards against victimization of
stakeholder who report genuine concerns under the
mechanism.

During the year under review, the Board of Directors
approved amendment to Whistle Blower Policy /
Vigil Mechanism broadening the scope of the policy.
The Whistle Blower Policy and Vigil Mechanism is
uploaded on the website of the Company and can
be accessed at Investors corner - IndoStar Capital
Finance Limited . More details have been provided in
the Corporate Governance Report which is annexed
to and forms an integral part of this Board''s Report.

During the year, the Company has received 3 (three)
whistle blower complaints. All the three cases were
investigated and appropriate actions were taken.

The Audit Committee is apprised of the vigil
mechanism on a periodic basis. During the year,
no person was denied access to the Chairperson
of the Audit Committee. A quarterly report on the
whistle blower complaints is placed before the Audit
Committee for its review.

CORPORATE SOCIAL RESPONSIBILITY

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

During the year under review, the Board of
Directors approved amendment to Corporate Social
Responsibility Policy to include “promotion of
sports” as one of the CSR project/activity and other
regulatory amendments in line with the Act. Details
of the composition of the CSR Committee and the
CSR Policy have been provided in the Corporate
Governance Report which is annexed to and forms
an integral part of this Board''s Report.

RISK MANAGEMENT FRAMEWORK

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

The Risk Management Committee of the Company
has not identified any elements of risk which in their
opinion may threaten the existence of your Company.
Details of the risks and concerns relevant to the
Company are discussed in detail in the Management
Discussion and Analysis Report which forms part of
the Annual Report.

The Board of Directors approved amendment to Risk
Management Framework of the Company with the
intention to make it more robust and to meet the
requirement of the today''s business environment.
In compliance with the RBI Directions, the Board
of Directors, on the basis recommendation of Risk
Management Committee, amended the ICAAP
Policy and Framework with the objective of ensuring
availability of adequate capital to support all risks in
business as also to enable effective risk management
system in the Company.

The Chief Risk Officer (“CRO”) oversees and
strengthens the risk management function of
the Company. The CRO is invited to participate
in meetings of the Board, Audit Committee,
Asset Liability Committee and Risk Management
Committee. The CRO along with members of the
Senior Management apprises the Risk Management
Committee and the Board on various aspects of risk
assessment, including the process of identifying and
evaluating risks, key risks, changes in risk ratings,
the root cause of risks and their impact, key risk
indicators, mitigation strategies, and action taken to
manage and reduce these risks.

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

INTERNAL CONTROL / INTERNAL FINANCIAL
CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company''s well-defined organizational
structure supported by documented policies,
defined authority matrix and robust internal controls
ensuring efficiency of operations, compliance with

internal system / policies and applicable laws. The
internal control system / policies of your Company
are further strengthened with internal audits, regular
management reviews and external audits. It provides
reasonable assurance in respect of financial and
operational information, compliance with applicable
statutes, safeguarding of assets of the Company,
prevention and detection of frauds, accuracy and
completeness of accounting records and also
ensuring compliance with the Company''s policies.

The Audit Committee continuously monitors the
effectiveness of the internal controls system and
policies of your Company. The Risk Management
Committee and the Audit Committee periodically
review various risks associated with the business of
the Company along with risk mitigants and ensure
that they have an integrated view of risks faced by
the Company. The Board of Directors believes that
internal control systems are commensurate with the
nature, size and complexity of Company''s operations.

The Statutory Auditors and the Internal Auditors of
the Company have also confirmed that the internal
financial control framework is operating effectively.

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

INTERNAL AUDIT

The Company has in place an robust Internal Audit
Framework to monitor the efficacy of internal
controls with the objective of providing to the
Audit Committee and the Board of Directors, an
independent and reasonable assurance on the
adequacy and effectiveness of the Company''s risk
management, internal control and governance
processes. The framework is commensurate with the
nature of the business, size, scale and complexity of
its operations with a Risk Based Internal Audit (RBIA)
approach.

The Company has implemented a RBIA Programme
in accordance with the requirements of RBI circular
dated February 03, 2021. 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 regularly reviewed by the management and
corrective action is initiated to strengthen controls
and enhance the effectiveness of existing systems.
Significant audit observations, if any, are presented
to the Audit Committee along with the status of
management''s action plans and the implementation
status of audit recommendations.

Separate meetings between the Head Internal
Auditor and the Audit Committee

Separate meetings between the Heads Internal
Auditor and the Audit Committee, without the
presence of Management, were enabled to facilitate
independent and transparent discussion amongst
them. The meetings were held on April 24, 2024,
September 18, 2024, December 18, 2024, March 12,
2025 and June 17, 2025.

CEO & CFO CERTIFICATE

Compliance Certificate in terms of Regulation 17(8)
of the Listing Regulations on the audited financial
statements and other matters prescribed therein,
submitted to the Board of Directors by the CEO and
CFO of the Company, for financial year ended March
31, 2025, is enclosed herewith at Annexure IV to this
Board''s Report.

CONTRACTS / ARRANGEMENTS WITH RELATED
PARTIES AND RELATED PARTY TRANSACTION
POLICY

During the financial year under review, all transactions
entered into by the Company with related parties
were in ordinary course of business and on arm''s
length basis and were not considered material as per
the provisions of Section 188 of the Act read with
the Companies (Meetings of Board and its Powers)
Rules, 2014. Hence, disclosure in Form AOC-2 under
Section 134(3) (h) of the Act, read with the Rule 8
of the Companies (Accounts of Companies) Rules,
2014, is not applicable.

Further during the year under review, your company
has amended the Related Party Transaction Policy as
per the requirements of the Securities and Exchange
Board of India (Listing Obligations and Disclosure
Requirements) (Third Amendment) Regulations,
2024.

Prior approval of the Audit Committee is obtained
for all Related Party Transactions (“RPTs”) including
omnibus approval for transactions which are of a
repetitive nature and entered into in the ordinary
course of business and at arm''s length in accordance
with the Policy on Related Party Transactions of
the Company. A statement on RPTs specifying the
details of the transactions pursuant to each omnibus
approval granted, is placed on a quarterly basis for
review by the Audit Committee.

Pursuant to Regulation 23(9) of Listing Regulations,
disclosures of RPTs are submitted to the Stock
Exchanges on a half-yearly basis and published on the
Company''s website at https://www.indostarcapital.
com/investors-corner#investor-relations.

Disclosure of the related party transactions as
required under Ind AS - 24 are reported in Note 33
of the audited standalone financial statements of the
Company for the financial year ended March 31, 2025.

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

ANNUAL RETURN

In terms of Section 134(3)(a) and Section 92(3) of
the Act read with the Companies (Management and
Administration) Rules, 2014, the Annual Return as
at financial year ended March 31, 2025 in prescribed
form No. MGT-7 is available on the website of the
Company at https://www.indostarcapital.com/
investors-corner#investor-services.

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

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

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

To ensure that all the employees are sensitized
regarding issues of sexual harassment, the Company
conducts online POSH trainings through the internal
e-learning platform and knowledge community
sessions.

Disclosures as required under Rule 8(5) of the
Companies (Accounts) Rules, 2014, as stated below:

(a) number of complaints of sexual harassment
received in the year: Nil

(b) number of complaints disposed off during the
year: Nil

(c) number of cases pending for more than ninety
days: Nil

INVESTOR EDUCATION AND PROTECTION FUND
(IEPF)

Details of unclaimed dividends and equity shares
which are transferred to the Investor Education
and Protection Fund and Investor Education and
Protection Fund authority are mentioned in the
General Shareholders'' Information which forms a
part of the Corporate Governance Report.

OTHER DISCLOSURES

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

No material changes and commitments affecting the
financial position of your Company have occurred
between the end of year under review and date of
this Board''s Report except sale of material subsidiary
of the Company viz. Niwas Housing Finance Private
Limited as stated above under para “subsidiary
companies and financial performance” in the Board''s
Report.

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

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

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

The Company has complied with the applicable
provisions relating to Maternity Benefits Act, 1961.

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

The operations of the Company are not energy
intensive nor does they require adoption of specific
technology and hence information in terms of Section
134(3)(m) of the Act read with the Companies
(Accounts) Rules, 2014 is not applicable to the
Company. The Company has, however, implemented
various energy conservation measures across all its
functions which are highlighted in the BRSR forming
part of this Report.

During the year under review, your Company did not
have any foreign exchange earnings and did not incur
any foreign currency expenditure (Previous year
foreign exchange expenditure was '' 12.28 crore).

DIRECTORS RESPONSIBILITY STATEMENT

To the best of the knowledge and belief and according
to the information and explanations obtained by
them, pursuant to the provisions of Section 134(3)
(c) read with Section 134(5) of the Act, the Directors
hereby confirm that:

a) in the preparation of the annual accounts for
the year ended March 31, 2025, the applicable
accounting standards have been followed and
no material departures have been made from the
same;

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

c) they have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provisions of the Act for
safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities;

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

e) they have laid down internal financial controls
to be followed by the Company and that such

internal financial controls are adequate and were
operating effectively; and

f) they have devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems were adequate and
operating effectively during the year ended
March 31, 2025.

APPRECIATION AND ACKNOWLEDGEMENT

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

By the Order of the Board of Directors
For IndoStar Capital Finance Limited

Naina Krishna Murthy

Chairperson
DIN: 01216114

Place: Mumbai
Date: August 13, 2025

---

Mar 31, 2024

Your Directors are pleased to present the 15^th Annual Report on the affairs of your Company together with the audited financial statements for the financial year ended March 31, 2024.

FINANCIAL HIGHLIGHTS

The key highlights of the audited standalone financial statements of your Company for the financial year ended March 31, 2024 and comparison with the previous financial year ended March 31, 2023 are summarized below:

('' in crore)

Particulars	Standalone
	March 31, 2024	March 31, 2023
Total income	1,125.23	993.08
Total expenditure	1,053.62	805.81
Profit/(loss) before taxation	71.61	187.27
Less: Provision for taxation
- Current tax	-	-
- Deferred tax asset	-	-
- Tax of earlier years	-	-
Net profit/(loss) after taxes	71.61	187.27
Other comprehensive income, net of tax	(0.24)	0.76
Total comprehensive income	71.38	188.03
Transfer to statutory reserve fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934	(14.32)	(37.45)
Appropriation towards dividend and dividend distribution tax	-	-
Surplus in the statement of profit and loss	57.06	150.58
Balance brought forward from previous period	(379.70)	(530.28)
Balance carried to balance sheet	(322.64)	(379.70)
Earnings per share (Face Value ? 10/- each)
Basic (?)	5.26	13.76
Diluted (?)	5.26	13.76

FINANCIAL PERFORMANCE AND COMPANY’S STATE OF AFFAIRS

The financial highlights tabulated above are based on the requirement of the Reserve Bank of India (“RBI”) Master Direction - Reserve Bank of India (Non-Banking Financial Company -Scale Based Regulation) Directions, 2023, the circulars, directions, notifications issued by the RBI from time to time (“RBI Directions”) and provisions of the Companies Act, 2013 (the “Act”) read with Rules made thereunder. For details of Reserves and Surplus of the Company, please refer Note No. 21 of the audited standalone financial statements of the Company for the financial year ended March 31, 2024.

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

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

In terms of the Dividend Distribution Policy of the Company, dividend shall be declared / recommended

on the equity shares of the Company, keeping in view the Company''s objective of meeting the long-term capital requirement for the business from internal cash accruals and appropriately rewarding shareholders. Details of the Dividend Distribution Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report and is also available on the website of the Company at https://www.indostarcapital.com/inv estors-corner#investor-services.

Due to carry forward losses of previous years and in-availability of sufficient profits of the current year, directors do not recommend any dividend for the financial year under review.

ACCOUNTING METHODS

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

In terms of Section 129 of the Act read with Rules framed thereunder, audited consolidated financial statements of the Company and its subsidiaries shall be laid before the ensuing Annual General Meeting of the Company along with the audited standalone financial statements of the Company for the financial year ended March 31, 2024.

The audited standalone and consolidated financial statements together with Auditor''s Report(s) thereon along with the salient features of the financial statements of the subsidiaries of the Company in the prescribed Form AOC - 1 forms part of the Annual Report and are also available on the website of the Company at https://www.indostarcapital.com/invest ors-corner#investor-relations.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Note no. 6 of the audited standalone financial statements.

SUBSIDIARY COMPANIES & THEIR FINANCIAL PERFORMANCE

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

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

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

In terms of Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and Company''s Policy for Determining Material Subsidiary, IHFPL continue to be a material subsidiary of your Company. Further, pursuant to the requirement of appointing an Independent Director of the Company on the board of directors of IHFPL in terms of explanation to Regulation 24(1) of the Listing

Regulations, Ms. Naina Krishna Murthy, Independent Director of the Company, has been appointed as Independent Director on the Board of IHFPL w.e.f. April 22, 2024.

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

IndoStar Home Finance Private Limited (“IHFPL”)

IHFPL is registered with the National Housing Bank to carry on the business as a housing finance institution without accepting public deposits and primarily focuses on providing affordable home finance. IHFPL commenced business operations in mid of 2017 and has built a quality and profitable portfolio of over '' 2,270 crore as on March 31, 2024. IHFPL operates in 9 states across India through various branches and has an employee base of over 932 employees as on March 31, 2024.

During the year under review, the total income of IHFPL was '' 290.43 crore (previous year: '' 209.24 crore). The operations of IHFPL during the year under review has resulted in profit after tax of '' 44.10 crore (previous year: '' 37.78 crore). The other key performance indicators of IHFPL are: (a) Return on Assets: 2.9%; (b) Capital to Risk Weighted Assets Ratio: 57.35%; (c) Debt-Equity Ratio: 2.64x; (d) Assets Under Management: '' 2,270 crore which is 40% YoY growth; (e) Disbursements: '' 937 crore; (f) Gross Stage 3 assets: 1.13%; and (g) Cash & cash equivalent including undrawn lines: '' 397 crore.

The Board of Directors and Members of the IHFPL in order to rebrand the Company with the Company''s undertakings in the housing finance business, which will also aid in building its individual recognition and goodwill in the market has approved the name of the Company to be changed from “IndoStar Home Finance Private Limited” to “Niwas Housing Finance Private Limited” which shall become effective from the date of issue of fresh certificate of incorporation by the Registrar of Companies and approval of the other regulatory authority(ies) as may be required.

Subsequent to the year under review, IHFPL received the certificate of registration to act as Corporate Agent from the Insurance Regulatory and Development Authority of India (IRDAI) dated 19 August 2024.

IndoStar Asset Advisory Private Limited (“IAAPL”)

IAAPL is enabled under its objects to carry on the business of inter-alia advising, managing, providing investment advisory services, financial advisory services, management and facilitation services.

IAAPL acted as an investment manager to IndoStar Credit Fund and IndoStar Recurring Return Credit Fund, both, Category II Alternative Investment Funds registered with the Securities and Exchange Board of India (“SEBI”) and has applied to SEBI for surrendering the registration of IndoStar Credit Fund and IndoStar Recurring Return Credit Fund and the applications are under process.

During the year under review, the total income of IAAPL was '' 0.19 crore (previous year: '' 0.16 crore) and the Profit after tax was '' 0.12 crore (previous year: Profit after tax was '' 0.10 crore).

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

BUSINESS RESPONSIBILITY AND

SUSTAINABILITY REPORT (BRSR)

Pursuant to Regulation 34 of the Listing Regulations, detailed BRSR report, in the format as prescribed by Securities and Exchange Board of India (“SEBI”), describing various initiatives taken by the Company towards the Environmental, Social and Governance aspects forms part of this Report and has been provided at Annexure V to this Boards report and is also available on the website of the Company at https://www.indostarcapital.com/investors-corner#i nvestor-relations.

REPORT ON CORPORATE GOVERNANCE

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

A certificate from M/s. Mehta & Mehta, Company Secretaries, confirming compliance with the conditions of Corporate Governance as prescribed under the Listing Regulations is annexed to the Corporate Governance Report.

REGISTRATION AS A CORPORATE AGENT

During the year under review, the Company received the certificate of registration to act as Corporate Agent from the Insurance Regulatory and Development Authority of India (IRDAI) dated 21 February 2024.

LAUNCH OF NEW PRODUCT - MICRO LOAN AGAINST PROPERTY

The Company, subsequent to the year under review, launched new product viz. Micro Loan Against Property with an intention to diversify portfolio in different products. The Company introduced Micro LAP (Loan Against Property) product as a risk mitigation strategy for the Company which is primarily focused on commercial vehicle loans financing activities, justification for the same includes: diversification of portfolio, collateral security, stable asset class, market demand etc.

SHARE CAPITAL Authorized Share Capital

The Members, at its Extra-Ordinary General Meeting of the Company held on 22 March 2024 approved increase in authorized share capital of the Company from (i) '' 1,650,000,000/- (Indian Rupees One Hundred and Sixty Five Crore only) divided into: (a) 152,500,000 (Fifteen Crore Twenty Five Lakh) equity shares of '' 10 (Indian Rupees Ten only) each, amounting to 1,525,000,000 (Indian Rupees One Hundred and Fifty Two Crore and Fifty Lakh Only); and (b) 12,500,000 (One Crore Twenty Five Lakh) preference shares of '' 10 (Indian Rupees Ten only) each, amounting to 125,000,000 (Indian Rupees Twelve Crore Fifty Lakh Only) to (ii) '' 2,000,000,000 [Indian Rupees Two Hundred Crore Only] divided into (a) 187,500,000 (Eighteen Crore Seventy Five Lakhs) equity shares of '' 10 (Indian Rupees Ten only) each, amounting to '' 1,875,000,000 (Indian Rupees One Hundred Eighty Seven Crores Fifty lakhs); and (b) 12,500,000 (One Crore Twenty Five Lakh) preference shares of '' 10 (Indian Rupees Ten only) each, amounting to 125,000,000 (Indian Rupees Twelve Crore Fifty Lakh Only) and consequent alteration in Clause v(a) of the Memorandum of Association of the Company.

Issued, Subscribed and Paid-up Share Capital

As on March 31, 2024 and as on the date of this report, the issued, subscribed and paid-up share capital of the Company stands at '' 1,360,792,950 divided into 136,079,295 equity shares of '' 10 each.

Your Company has not issued any sweat equity shares or equity shares with differential voting rights. None of the Directors on the Board of the Company as on March 31, 2024, holds any instruments convertible into Equity Shares of the Company.

Issue and allotment of convertible warrants

Subsequent to the year under review, pursuant to the special resolutions passed at the Extra Ordinary General Meeting of the Company held on 22 March 2024, the Company issued and allotted convertible warrants as per following details:

Sr. No	Name of allottee	Category of Allottee	No. of warrants	Price per warrant	Consideration received*
1	Florintree Tecserv LLP	Non-Promoter Entity	10,869,565	'' 184	'' 499,999,990

DEPOSITS

Your Company has not accepted any public deposits during the year under review and shall not accept any deposits from the public without obtaining prior approval of the RBI. Further, your Company being an NBFC, the disclosure requirements under Chapter V of the Act read with Rule 8(5)(v) and 8(5)(vi) of the Companies (Accounts) Rules, 2014 are not applicable to your Company.

RESOURCES AND LIQUIDITY

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

During the year under review, your Company has raised additional funds from inter-alia, following sources (i) 762.50 crore as bank borrowings (outstanding as on March 31, 2024: '' 1,306.01 crore); (ii) '' 2,455 crore through issuance of non-convertible debentures (outstanding as on March 31, 2024: '' 3,248.00 crore); and (iii) '' 1,090 crore by securitization of loan assets of the Company. Subsequent to the year under review, the Company raised '' 660.00 crore through

issue of commercial paper. Funds raised through private placement of debentures were utilized for the purpose mentioned in the respective offer documents. Till the pending utilization of funds for stated purpose, the funds were temporarily invested in mutual funds/Banks FDs/ maintained a balance in current accounts.

During the year under review, the Board of Directors at its meeting held on 24 January 2024, approved issue of listed, rated, secured, redeemable, non-convertible debentures (“NCDs”), aggregating up to '' 500 crore (Rupees Five hundred crore) in one or more series/ tranches including option of oversubscription (Greenshoe Option), if any, to investors eligible under applicable law by way of public issue (“the Public Issue”), which is within the limit approved by the shareholders of the Company at the Annual General Meeting held on 30 August 2019 and the draft prospectus for issue of NCDs aggregating up to '' 300 crore (Rupees Three hundred crore was filed on 29 July 2024 and In-principle approval for the same was received on 12 August 2024 from Bombay Stock Exchange.

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

CREDIT RATING(S)

Credit Ratings assigned to the Company as on March 31, 2024 is summarized below:

Particulars / Rating Agencies	Rating	Remarks
Long Term:
• Debt Programme
CARE Ratings Limited	CARE AA(-)	Securities with this rating are considered to have high
CRISIL Ratings Limited	CRISIL AA(-)	degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
• Market Linked Debentures
CARE Ratings Limited	CARE PP-MLD AA(-)	Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
• Short Term Debt Programme / Commercial Paper:
CRISIL Ratings Limited	CRISIL A1( )	Securities with this rating are considered to have very
CARE Ratings Limited	CARE A1( )	strong degree of safety regarding timely servicing of financial obligations. Such securities carry very lowest credit risk.

During the year under review, CARE Ratings Limited upgraded the long-term rating to “CARE AA-”; re-affirmed short-term rating at “CARE A1 ” while retaining outlook as “Stable”.

During the year under review, while CRISIL did not revise the long-term or short term rating and retained them at CRISIL AA- and CRISIL A1 respectively; while

it removed Rating Watch with Negative Implications and assigned “Negative” outlook.

DEBT EQUITY RATIO

Your Company''s Debt Equity ratio as on March 31, 2024 stood at 1.96

CAPITAL ADEQUACY RATIO

Your Company is well capitalized to provide adequate capital for its continued growth. As on March 31, 2024, the Capital to Risk Assets Ratio (“CRAR”) of your Company stood at 28.87% well above the regulatory limit of 15% as prescribed by the RBI for NBFCs.

NET OWNED FUNDS

The Net Owned Funds of your Company as on March 31, 2024 stood at '' 1,741.26 crore.

RBI DIRECTIONS AND APPOINTMENT OF CHIEF COMPLIANCE OFFICER

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

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

In terms of the RBI Circular dated 11 April 2022 on Compliance Function and Role of Chief Compliance Officer (CCO) - NBFCs, the Board of Directors, on recommendation of Nomination and Remuneration Committee, through circular resolution, approved appointment of Ms. Rashmita Prajapati as Chief Compliance Officer of the Company for a period of 5 (five) years with effect from 7 August, 2023.

ALTERATION OF ARTICLES OF ASSOCIATION OF THE COMPANY

Pursuant to the special resolution passed at its Extra-Ordinary General Meeting of the Company held on 22 March 2024, the Company, during the year under review, altered its Articles of Association of the Company with respect to the issuance of warrants convertible into equity shares of the Company, and for other ancillary matters in respect thereof, along with a clarificatory amendment to the article pertaining to further issue of shares by the Company.

Further, subsequent to the year under review, pursuant to the special resolution passed through postal ballot on 28 June 2024, the Company altered it Articles of Association of the Company with respect to increase in total number of directors from to the maximum of eight directors to maximum of nine directors.

COMPLIANCE WITH MINIMUM PUBLIC SHAREHOLDING

During the year under review, IndoStar Capital and Everstone Capital Partners II LLC, members of the promoter and promoter group of the Company, have sold the 19,340,000 equity shares of the Company representing 14.21% of the total paid-up equity share capital through offer for sale by way of stock

exchange mechanism and the public shareholding in the Company has now increased upto 25% and accordingly the Company is in compliance with the minimum public shareholding norms with effect from May 5, 2023, as required under Regulation 38 of the Listing Regulations.

SHIFTING OF REGISTERED OFFICE OF THE COMPANY

During the year under review, the Company shifted its registered office from “Unit No. 505, 5th Floor, Wing 2/E, Corporate Avenue, Andheri - Ghatkopar Link Road, Chakala, Andheri (East), Mumbai - 400099 to Silver Utopia, 3rd Floor, Unit No 301-A, Opposite P & G Plaza, Cardinal Gracious Road, Chakala, Andheri (E), Mumbai - 400099 with effect from December 5, 2023.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At present, the Board of Directors of your Company comprises 9 (nine) Directors of which 3 (three) are Non-Executive Independent Directors of whom one is a Woman Director, 4 (four) are Non-Executive Non-Independent Directors and 2 (two) are Executive Directors. The Chairman of the Board of Directors is a Non-Executive Independent Director. The Board composition is in compliance with the requirements of the Act, the Listing Regulations and the RBI Directions. Detailed composition of the Board of Directors of the Company has been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report.

Appointment and Cessation:

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

During the year under review, Mr. Munish Dayal, Non-Executive Non-Independent Director, resigned from the Board of Directors of the Company with effect from 8 September 2023. The Board of Directors places on record its sincere appreciation for the valuable contribution and guidance provided by Mr. Dayal, during his association with the Company.

Subsequent to resignation of Mr. Dayal, upon nomination by BCP V Multiple Holdings Pte. Ltd., in terms of the shareholder''s agreement dated 31 January 2020 executed among the Company, BCP V Multiple Holdings Pte. Ltd. and Indostar Capital, the Board of Directors, upon recommendation of Nomination and Remuneration Committee, through

circular resolution passed on 8 September 2023 approved appointment of Mr. Devdutt Marathe as Additional Non-Executive Non-Independent Director with effect from 8 September 2023. Further, in terms of notice(s) received under Section 160 of the Act, proposing candidature of Mr. Marathe, the shareholders at the 14th Annual General Meeting of the Company held on 18 September 2023 approved the appointment of Mr. Marathe, as Non-Executive Non-Independent Director of the Company, liable to retire by rotation.

Subsequent to the year under review, the Board of Directors, upon recommendation of Nomination and Remuneration Committee, at their meeting held on 13 May 2024, approved and recommended appointment of Mr. Randhir Singh as the Whole Time Director and Executive Vice Chairman of the Company to the shareholders of the Company. The shareholders approved the appointment of Mr. Randhir Singh as the Whole Time Director and Executive Vice Chairman by passing a special resolution through postal ballot on 28 June 2024 effective from the date as may be decided by the Board of Directors/its committee. Mr. Randhir Singh assumed office as the Whole Time Director and Executive Vice Chairman of the Company with effect from 22 July 2024.

Director(s) Retiring by Rotation

In terms of Section 152(6) of the Act read with the Articles of Association of the Company, Mr. Dhanpal Jhaveri (DIN: 02018124) and Mr. Aditya Joshi (DIN: 08684627), shall retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing Annual General Meeting of the Company. Brief profiles of Mr. Dhanpal Jhaveri and Mr. Aditya Joshi have been included in the notice convening the ensuing Annual General Meeting.

Re-appointment of Independent Directors

None of the Independent Director(s) on the Board of Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

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

Director(s) Declaration and Disclosures

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

A certificate from H Choudhary & Associates, Practicing Company Secretary, confirming that none

of the Directors on the Board of the Company as on March 31, 2024 have been debarred or disqualified from being appointed or continuing as Director on the Board of the Company by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any such statutory authority, forms part of the Governance Report which is annexed to and forms an integral part of this Board''s Report.

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

Key Managerial Personnel (“KMP”)

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

Following are the KMPs of the Company as on date of this Board''s Report:

Mr.	Karthikeyan Srinivasan	Chief Executive Officer
Mr.	Vinodkumar Panicker	Chief Financial Officer
Ms.	CO 3; ir QJ (_ QJ 3"	Company Secretary & Compliance Officer

MEETINGS

The Board and Committees meet at regular intervals inter-alia to discuss, review and consider various matters including business performance, strategies, policies and regulatory updates and impact. During the year under review, the Board met 12 (twelve) times and several meetings of Committees including the Audit Committee were held. Details with respect to the meetings of the Board of Directors and Committees held during the year under review, including attendance by Directors / Members at such meetings have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

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

BOARD COMMITTEES

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

The Board of Directors has amongst others, constituted the following:

• Audit Committee,

• Risk Management Committee,

• Nomination & Remuneration Committee,

• Asset Liability Management Committee,

• Corporate Social Responsibility Committee,

• Stakeholders Relationship Committee,

• Grievances Redressal Committee,

• IT Strategy Committee,

• IT Steering Committee,

• Borrowing Committee (erstwhile Debenture Committee),

• Credit Committee,

• Management Committee,

• Internal Complaints Committee(s),

• Banking Committee,

• ESG Working Review Committee and

• Disciplinary Committee.

• Debt- Public Issue Committee

• Retail Lending Committee

• Corporate Lending Committee

Detailed note on the composition of the Board and its committees, including its terms of reference and meetings held are provided in the Corporate Governance Report. The composition and terms of reference of the Committees of the Board of the Company is in line with the provisions of the Act, the Listing Regulations and RBI Directions.

PERFORMANCE EVALUATION

In terms of the provisions of the Act and the Listing Regulations, the Board of Directors adopted a Board Performance Evaluation Policy to set out a formal mechanism for evaluating performance of the Board, that of its committee(s) and individual Directors including the Chairperson. Additionally,

in order to outline detailed process and criteria to be considered for performance evaluation, the Nomination & Remuneration Committee has put in place the ''Performance Evaluation Process - Board, Committees and Directors'', which forms an integral part of the Board Performance Evaluation Policy.

In terms of the requirement of Schedule IV of the Act and Regulation 25 of the Listing Regulations, a separate meeting of the Independent Directors was held on 26 March 2024 to review the performance of the Non-Independent Directors including the Chairman and the Board, as a collective entity.

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

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

The Board of the Company was satisfied with the functioning of the Board and its Committees. The Committees are functioning well and besides covering the Committees'' terms of reference, as mandated by applicable laws, important issues are brought up and discussed in the Committee Meetings. The Board was also satisfied with the contribution of Directors in their individual capacities. The Board has full faith in the Chairman leading the Board effectively and ensuring participation and contribution from all the Board Members.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

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

In terms of Regulation 46 of the Listing Regulations, the details of familiarization programmes imparted to the Independent Directors during the year under review including details of number of programmes and number of hours spent by each Independent Director are available on the website of the Company at https://www.indostarcapital.com/investors-corner #investor-services.

POLICY ON APPOINTMENT OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

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

Subsequent to the year under review, the Board of Directors approved amendment to the above Policy in order to align the same with the Act, Listing Regulations and RBI Directions. Details of the Policy on Selection Criteria / “Fit & Proper” Person Criteria have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report and is also available on the website of the Company at https://www.indostarcapital.com/inv estors-corner#investor-services.

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

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

During and subsequent to the year under review, the Board of Directors approved amendment to the above Policy in order to align the same with the RBI Directions. Details of the Remuneration Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report. The Remuneration Policy is also available on the website of the Company at https://www.indostarcapital.com/investors-corner#i nvestor-services.

Employee Remuneration

In terms of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures with respect to the remuneration of Directors, Key Managerial Personnel and employees of the

Company have been provided at Annexure III to this Board''s Report.

Statement containing details of employees as required in terms of Section 197 of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the Registered & Corporate Office of the Company during working hours for a period of 21 days before the date of the ensuing 15th Annual General Meeting. A copy of the statement may be obtained by shareholders by writing to the Company Secretary at the Registered & Corporate Office of the Company or at [email protected].

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

EMPLOYEE STOCK OPTION PLANS (“ESOP PLANS”)

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

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

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

Subsequent to the year under review, pursuant to the special resolution passed through Postal Ballot on 28 May 2024, the shareholders of the Company approved the amendment to the IndoStar ESOP Plan 2018 (“ESOP 2018”), to retain top talent and to ensure that the NRC has the requisite powers to ensure that the ESOP 2018 provides the NRC the flexibility to customise the grant, vesting and exercise conditions for the various levels of employees and those which meet industry remuneration standards.

Disclosures in terms of Regulation 14 of the SBEB & SE Regulations , are available on the website of the Company at https://www.indostarcapital.com/invest ors-corner#investor-services.

AUDITORS

Statutory Auditors & their Report

During the year under review, in terms of the provisions of the Act and in order to comply with the guidelines issued by RBI on 27 April 2021 for appointment of statutory auditors for NBFCs, the Deloitte Haskins and Sells LLP ceased to hold the office of Statutory Auditors of the Company from the conclusion of 14th Annual General Meeting and M S K A & Associates, Chartered Accountants, (Firm registration no. 105047W), Mumbai were appointed as the Statutory Auditors of the Company, for a period of three (3) consecutive years from the conclusion of the 14th Annual General Meeting until the conclusion of the 17th Annual General Meeting.

The Statutory Auditors have issued their unmodified opinion, both on standalone and consolidated financial statements, for the financial year ended March 31, 2024. They have not highlighted any qualifications, reservations, adverse remarks or disclaimers. The Statutory Auditors have not reported any incidents of material fraud to the Audit Committee of the Board during the financial year 2023-24. The notes to the accounts referred to in the auditor''s report are self-explanatory and therefore do not call for any further explanation and comments.

Secretarial Auditors & their Report

Pursuant to the requirements of Section 204(1) of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Mehta & Mehta, Company Secretaries, to conduct the Secretarial Audit for the financial year under review.

The Secretarial Audit Report in Form MR-3 for the financial year under review, as received from M/s. Mehta & Mehta, Company Secretaries, is attached as Annexure I to the Board''s Report.

Ms. Mehta & Mehta, Company Secretaries, in their report on the secretarial audit of your Company for the financial year ended March 31, 2024 have submitted following remarks/qualifications:

a. As per Regulation 24A (2) of SEBI (LODR) Regulation, 2015, the Company shall submit a secretarial compliance report to stock exchanges within sixty days from end of each financial year however the report in pdf and xbrl formats have been filed on a delayed date.

b. As per Regulation 47 (3) of SEBI (LODR) Regulation, 2015, the Company shall publish in

newspaper the financial results within 48 hours of conclusion of the meeting of board of directors at which the financial results were approved however the same was delayed by one day.

c. As per Regulation 60(2) of SEBI (LODR) Regulation, 2015, delayed notice has been given to the stock exchange for the record date.

d. As per Regulation 29 (2) of SEBI (LODR) Regulation, 2015, prior intimation to be given to the Stock Exchange for fund raising has not been given by the Company.

e. As per Regulation 30 of SEBI (LODR) Regulation, 2015, delayed intimation has been given to the National Stock Exchange for the appointment of Mr. Devdutt Marathe & Resignation of Mr. Munish Dayal.

Director’s Response to the remarks/qualification in Secretarial Audit Report:

The delay in submissions were inadvertent and due to human error. The Company has since been working to put in place adequate systems and automation tools to strengthen its governance and to ensure no such instances were repeated in future. The Company would be more cautious and ensure the compliance are done on time.

In terms of Regulation 24 A(2) of the Listing Regulations, Annual Secretarial Compliance Report with respect to all applicable compliances under regulations and circulars / guidelines issued by the Securities and Exchange Board of India from M/s. Mehta & Mehta, Company Secretaries in prescribed format for the financial year ended March 31, 2024 has been submitted to the

stock exchanges.

A copy of the secretarial audit report for the financial year 2023-24 issued to IndoStar Home Finance Private Limited, a material unlisted subsidiary of the Company is attached as Annexure II to the Board''s Report.

Cost record 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.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

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

for adequate safeguards against victimization of Director(s) or employee(s) who report genuine concerns under the mechanism.

During the year under review, the Board of Directors approved amendment to Whistle Blower Policy / Vigil Mechanism to replace the name of Vigilance and Ethics Officer pursuant to resignation of Mr. Jitendra Bhati and appointment of Ms. Shikha Jain as Company Secretary and Compliance Officer of the Company. Details of the Whistle Blower Policy / Vigil Mechanism have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report.

CORPORATE SOCIAL RESPONSIBILITY

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

Subsequent to the year under review, the Board of Directors approved amendment to Corporate Social Responsibility Policy to include “promotion of sports” as of the CSR project/activity and other regulatory amendments in line with the Act. Details of the composition of the CSR Committee and the CSR Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board''s Report.

RISK MANAGEMENT FRAMEWORK

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

The Risk Management Committee of the Company has not identified any elements of risk which in their opinion may threaten the existence of your Company. Details of the risks and concerns relevant to the Company are discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report.

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

Subsequent to the year under review, the Board of Directors approved amendment to Risk Management Framework of the Company with the intention make it more robust and to meet the requirement of the today''s business environment.

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

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

INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company''s well-defined organizational structure, documented policies, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal system / policies and applicable laws. The internal control system / policies of your Company are supplemented with internal audits, regular reviews by the management and checks by external auditors. It provides reasonable assurance in respect of financial and operational information, compliance with applicable statutes, safeguarding of assets of the Company, prevention and detection of frauds, accuracy and completeness of accounting records and also ensuring compliance with the Company''s policies. The Audit Committee monitors the internal controls system / policies of your Company. The Risk Management Committee and the Audit Committee periodically review various risks associated with the business of the Company along with risk mitigants and ensure that they have an integrated view of risks faced by the Company. The Board of Directors is of a view that your Company''s internal control systems are commensurate with the nature of its business, size and complexity of operations.

The Statutory Auditors and the Internal Auditors of the Company also provide their confirmation that the internal financial control framework is operating effectively.

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

INTERNAL AUDIT

The Company has in place an effective Internal Audit Framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent and reasonable assurance on the adequacy and effectiveness of the organisation''s Risk Management, internal control and governance processes. The framework is commensurate with the nature of the business, size, scale and complexity of its operations with a Risk Based Internal Audit (RBIA) approach.

The Company has implemented a RBIA Programme in accordance with the requirements of RBI circular dated 3rd February 2021. 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 regularly reviewed by the management and corrective action is initiated to strengthen controls and enhance the effectiveness of existing systems. Significant audit observations, if any, are presented to the Audit Committee along with the status of management actions and the progress of implementation of recommendations.

CEO & CFO CERTIFICATE

Compliance Certificate in terms of Regulation 17(8) of the Listing Regulations on the audited financial statements and other matters prescribed therein, submitted to the Board of Directors by the CEO and CFO of the Company, for financial year ended March 31, 2024, is enclosed herewith at Annexure IV to this Board''s Report.

CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES AND RELATED PARTY TRANSACTION POLICY

During the financial year under review, all transactions entered into by the Company with related parties were in ordinary course of business and on arm''s length basis and were not considered material as per the provisions of Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. Hence, disclosure in Form AOC-2 under Section 134(3) (h) of the Act, read with the Rule 8 of

the Companies (Accounts of Companies) Rules, 2014, is not applicable.

Prior approval of the Audit Committee is obtained for all Related Party Transactions (“RPTs”) including omnibus approval for transactions which are of a repetitive nature and entered into in the ordinary course of business and at arm''s length in accordance with the Policy on Related Party Transactions of the Company. A statement on RPTs specifying the details of the transactions pursuant to each omnibus approval granted, is placed on a quarterly basis for review by the Audit Committee.

Pursuant to Regulation 23(9) of Listing Regulations, disclosures of RPTs are submitted to the Stock Exchanges on a half-yearly basis and published on the Company''s website at https://www.indostarcapital. com/investors-corner/#investor-relations.

Disclosure of the related party transactions as required under Ind AS - 24 are reported in Note 32 of the audited standalone financial statements of the Company for the financial year ended March 31, 2024.

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

ANNUAL RETURN

In terms of Section 134(3)(a) and Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return as at financial year ended March 31, 2024 in prescribed form No. MGT-7 is available on the website of the Company at https://www.indostarcapital.com/investors-corner #investor-services.

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

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

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

During the year under review, one complaint related to sexual harassment was received by the Internal Complaints Committee and the Regional Internal Complaints Committees and the same was disposed off. There are no complaints pending as on March 31, 2024.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Details of unclaimed dividends and equity shares which are transferred to the Investor Education and Protection Fund and Investor Education and Protection Fund authority are mentioned in the General Shareholders'' Information which forms a part of the Corporate Governance Report.

OTHER DISCLOSURES

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

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

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

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

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

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

The operations of the Company are not energy intensive nor does they require adoption of specific technology and hence information in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is not applicable to the Company. The Company has, however, implemented various energy conservation measures across all its functions which are highlighted in the BRSR forming part of this Report.

During the year under review, your Company did not have any foreign exchange earnings and incurred foreign currency expenditure of '' 12.28 crore (Previous year foreign exchange expenditure: '' 40.19 crore).

DIRECTORS RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and no material departures have been made from the same;

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

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) the directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

APPRECIATION AND ACKNOWLEDGEMENT

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

By the Order of the Board of Directors For IndoStar Capital Finance Limited

Bobby Parikh

Chairman DIN: 00019437

Place: Mumbai Date: August 29, 2024

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Mar 31, 2023

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

FINANCIAL HIGHLIGHTS

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

(Rs. In Crore)
Particulars	For the year ended March 31, 2023	For the year ended March 31, 2022
Total income	973.25	1,053.55
Total expenditure	785.98	1,994.40
Profit/(loss) before taxation	187.27	(940.85)
Less: Provision for taxation
- Current tax	-	-
- Deferred tax asset	-	(171.66)
Net profit/(loss) after taxes	187.27	(769.19)
Other comprehensive income, net of tax	0.76	0.47
Total comprehensive income	188.03	(768.72)
Transfer to statutory reserve fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934	(37.45)	-
Appropriation towards dividend and dividend distribution tax*	-	(58.50)
Surplus in the statement of profit and loss	150.58	(827.22)
Balance brought forward from previous period	(530.28)	296.94
Balance carried to balance sheet	(379.70)	(530.28)
Earnings per share (Face Value '' 10/- each)
Basic (?)	13.76	(62.06)
Diluted (?)	13.76	(62.06)

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

FINANCIAL PERFORMANCE AND COMPANY’S STATE OF AFFAIRS

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

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

Conduct Review of commercial vehicles and SME businesses

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

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

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

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

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

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

FINANCIAL STATEMENTS

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

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

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

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

SUBSIDIARY COMPANIES & THEIR FINANCIAL PERFORMANCE

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

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

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

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

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

IndoStar Home Finance Private Limited (“IHFPL”)

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

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

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

IndoStar Asset Advisory Private Limited (“IAAPL”)

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

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

SHARE CAPITAL

Issued, Subscribed and Paid-up Share Capital

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

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

Appointment and Cessation:

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

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

Director(s) Retiring by Rotation

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

Re-appointment of Independent Directors

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

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

Resignation of Independent Director(s)

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

Director(s) Declaration and Disclosures

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

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

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

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

Key Managerial Personnel (“KMP”)

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

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

Following are the KMPs of the Company as on date of this Board''s Report:

1. Mr. Karthikeyan Srinivasan Chief Executive Officer

2. Mr. Vinodkumar Panicker Chief Financial Officer

3. Ms. Shikha Jain

Company Secretary & Compliance Officer RBI DIRECTIONS

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

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

COMPLIANCE WITH SECRETARIAL STANDARDS

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

DEPOSITS

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

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

RESOURCES AND LIQUIDITY

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

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

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

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

CREDIT RATING(S) Credit Ratings assigned to the Company as on March 31, 2023 is summarized below:
Particulars / Rating Agencies	Rating	Remarks
Long Term:
• Debt Programme
CARE Ratings Limited	“CARE A ”	Securities with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.
CRISIL Ratings Limited	“CRISIL AA-”	Securities with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such securities carry very low credit risk.
• Market Linked Debentures
CARE Ratings Limited	“CARE PP-MLD A ”	Securities with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations. Such securities carry low credit risk.
• Short Term Debt Programme / Commercial Paper:
CRISIL Ratings Limited	“CRISIL A1 ”	Securities with this rating are considered to have very
CARE Ratings Limited	“CARE A1 ”	strong degree of safety regarding timely servicing of
ICRA Limited	“[ICRA] A1 ”	financial obligations. Such securities carry very lowest credit risk.

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

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

DEBT EQUITY RATIO

Your Company''s Debt Equity ratio as on March 31, 2023 stood at 1.6x.

CAPITAL ADEQUACY RATIO

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

NET OWNED FUNDS

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

COMPLIANCE WITH MINIMUM PUBLIC SHAREHOLDING

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

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

SHIFTING OF REGISTERED OFFICE OF THE COMPANY

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

AUDITORS

Statutory Auditors & their Report

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

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

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

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

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

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

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

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

Qualified Opinion

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

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

Basis for Qualified Opinion

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

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

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

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

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

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

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

Comments in Annexure B to the Auditors Report

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

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

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

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

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

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

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

Secretarial Auditors & their Report

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

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

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

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

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

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

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

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

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

Director’s Response to the remarks/qualification in Secretarial Audit Report

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

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

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

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

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

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

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

Secretarial Audit Report of Material Unlisted Indian Subsidiary

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

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

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

REPORT ON CORPORATE GOVERNANCE

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

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

MEETINGS

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

BOARD COMMITTEES

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

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

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

is annexed to and forms an integral part of this Board''s Report.

PERFORMANCE EVALUATION

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

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

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

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

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

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

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

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

POLICY ON APPOINTMENT OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

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

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

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

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

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

Employee Remuneration

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

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

the ensuing Annual General Meeting. A copy of the statement may be obtained by shareholders by writing to the Company Secretary at the Registered & Corporate Office of the Company or at investor. [email protected].

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

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

RISK MANAGEMENT FRAMEWORK

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

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

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

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

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

INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

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

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

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

Basis for Qualified Opinion

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

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

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

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

Qualified Opinion:

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

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

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

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

CEO & CFO CERTIFICATE

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

BUSINESS RESPONSIBILITY ANDSUSTAINABILITY REPORT

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

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

CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES AND RELATED PARTY TRANSACTION POLICY

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

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

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

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

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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

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

ANNUAL RETURN

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

EMPLOYEE STOCK OPTION PLANS (“ESOP PLANS”)

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

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

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

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

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

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

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

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

GENERAL DISCLOSURE

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

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

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

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

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

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

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

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

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

DIRECTORS RESPONSIBILITY STATEMENT

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

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

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

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

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

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

APPRECIATION AND ACKNOWLEDGEMENT

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

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Mar 31, 2018

The Directors take pleasure in presenting the 9^th Annual Report on the affairs of your Company together with the audited financial statements for the financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS

The key highlights of the standalone audited financial statements of your Company for the financial year ended March 31, 2018 and comparison with the previous financial year ended March 31, 2017 are summarized below:

(Rs. in crore)

Particulars	As at	As at
	March 31,	March 31,
	2018	2017
Total income	830.47	715.54
Total expenditure	469.57	395.12
Profit before taxation	360.90	320.42
Less: Provision for
taxation
- Current tax	125.45	117.45
- Deferred tax asset	(0.13)	(6.06)
Net profit after taxes	235.58	209.04
Transfer to statutory reserve	47.12	41.81
fund pursuant to Section
45-IC of the Reserve Bank
of India Act, 1934
Surplus in the statement	188.46	167.23
of profit and loss
Balance brought forward	636.46	469.23
from previous period
Balance carried to balance	824.92	636.46
sheet
Earnings per share (Face Value Rs.10/- each)
Basic (Rs.)	29.95	28.45
Diluted (Rs.)	27.03	26.09

FINANCIAL PERFORMANCE AND COMPANY’S STATE OF AFFAIRS

Your Company has recorded another year of steady growth, despite a highly competitive environment in the financial services sector. As a part of its growth strategy, your Company expanded its product portfolio in the retail lending segment by launching its vehicle finance business and housing finance business (through its wholly-owned subsidiary IndoStar Home Finance Private Limited). To achieve meaningful scale and support the growth of retail lending segment, your Company significantly expanded its branch network to near 100 branches as against 7 branches as on March 31, 2017 and increased the employee base to more than 1,000 as compared to 93 employees as on March 31, 2017.

Despite of rise in infrastructure and staffing expenses on account of expansion of branch network and increase in employee strength, the profit before tax as on March 31, 2018 increased by 12.63% to Rs.360.90 crore (previous year: Rs.320.42 crore). The profit after tax as on March 31, 2018 increased by 12.70% to Rs.235.58 crore (previous year: Rs.209.04 crore) and the net worth of the Company as on March 31, 2018 increased by 12.92% to Rs.2,145.99 crore (previous year: Rs.1,900.42 crore).

Pursuant to the requirement of the Reserve Bank of India (“RBI”) Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, a provision of Rs.23.69 crore (previous year: Rs.20.71 crore) at the rate of 0.40% of outstanding standard assets of the Company was made as at March 31, 2018 and pursuant to the requirement of Section 45-IC of the Reserve Bank of India Act, 1934, an amount of Rs.47.12 crore (previous year: Rs.41.81 crore) was transferred to statutory reserve fund. For details of Reserves and Surplus of the Company, please refer Note 4 of the standalone audited financial statements of the Company for the financial year ended March 31, 2018.

Your Company has continued to maintain good asset quality with a net NPA of 1.1% as on March 31, 2018 (previous year: 1.2%), in spite of a difficult macro-economic environment.

The operating and financial performance of your Company has been covered in the Management Discussion and Analysis Report which forms part of the Annual Report.

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

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

DIVIDEND

Considering your Company’s rapid growth, launch of vehicle finance business and future strategy and plans, your Directors consider it prudent to conserve resources and despite having sufficient distributable profits, do not recommend any dividend on equity shares for the financial year under review.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Section 129 of the Companies Act, 2013 read with Rules framed thereunder (“Act”), consolidated audited financial statements of the Company and its subsidiaries shall be laid before the ensuing Annual General Meeting of the Company along with the standalone audited financial statements of the Company for the financial year ended March 31, 2018.

The standalone and consolidated audited financial statements along with the salient features of the financial statements of the subsidiaries of the Company in the prescribed Form AOC-1 forms part of the Annual Report and are also available on the website of the Company at http://www.indostarcapital.com/investors.html.

INITIAL PUBLIC OFFERING

Directors are pleased to inform that, subsequent to the year under review, your Company completed the initial public offering of its equity shares (“IPO”) for 3,22,37,762 equity shares of face value of Rs.10/- each, for cash at a price of Rs.572/- per equity share determined through book building process, comprising a fresh issue of 1,22,37,762 equity shares aggregating to Rs.700 crore and an offer for sale of 2,00,00,000 equity shares aggregating to Rs.1,144 crore by Indostar Capital, Promoter and Holding Company of the Company and 5 (five) other selling shareholders. Equity shares allotted / transferred in the IPO constituted 35.37% of the post-offer equity share capital of the Company.

Pursuant to listing of equity shares on stock exchanges, your Company enjoys the benefit of enhanced brand name and creation of public market for the equity shares of the Company.

The IPO opened on May 9, 2018 (for anchor investors the IPO opened and closed on May 8, 2018) and closed on May 11, 2018. The IPO received an overwhelming response from all categories of investors and was subscribed by 6.8 times.

Post allotment / transfer in the IPO, the equity shares of your Company got listed and commenced trading on the BSE Limited and the National Stock Exchange of India Limited on May 21, 2018.

The proceeds of fresh issue were used towards augmenting the capital base of the Company to meet future capital requirements. There has been no deviation in the utilization of the proceeds from the fresh issue and the proceeds from the offer for sale were remitted to the respective selling shareholders in proportion to the equity shares offered by each of them, after adjusting their share in the offer related expenses.

SUBSIDIARY COMPANIES & THEIR FINANCIAL PERFORMANCE

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

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

In terms of Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), the Board of Directors adopted a Policy for Determining Material Subsidiary (“Material Subsidiary Policy”) in terms of which IAAPL and IHFPL are not material subsidiaries of your Company. Details of the Material Subsidiary Policy are given in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

The standalone audited financial statements of each of the subsidiaries are available on the website of the Company at http:// www.indostarcapital.com/investors.html#financial-statements-subsidiary-companies-wrap. Members interested in obtaining a copy of the standalone audited financial statements of the subsidiaries may write to the Company Secretary at the Registered & Corporate Office of the Company.

IndoStar Asset Advisory Private Limited

IAAPL is enabled under its objects to carry on the business of inter-alia advising, managing, providing investment advisory services, financial advisory services, management and facilitation services. Currently, IAAPL acts as an investment manager to IndoStar Credit Fund and IndoStar Recurring Return Credit Fund, both, Category II Alternative Investment Funds registered with the Securities and Exchange Board of India (“SEBI”). Since IndoStar Recurring Return Credit Fund is not operational, IAAPL applied to SEBI for surrendering the registration of IndoStar Recurring Return Credit Fund and the application is under process.

During the year under review, the total income of IAAPL was ‘ 0.60 crore (previous year: Rs.3.72 crore) and the loss after tax was Rs.1.08 crore (previous year: profit after tax was Rs.1.33 crore).

IAAPL has incurred loss during the year under review as a result of decrease in the management fees received by IAAPL from IndoStar Credit Fund on account of redemption of investments already made and no fresh investments by the IndoStar Credit Fund.

IndoStar Home Finance Private Limited

IHFPL is registered with the National Housing Bank to carry on the business as a housing finance institution without accepting public deposits consisting of 2 business verticals namely Affordable Home Finance and Retail Home Finance. IHFPL commenced its business operations in September 2017 and considering its growth plans, has expanded its branch network as on date to over 40 branches and employees’ base to over 400 employees.

During the year under review, the total income of IHFPL was Rs.2.90 crore (previous year: Rs.0.65 crore) and the loss after tax was Rs.10.12 crore (previous year: profit after tax was Rs.0.43 crore). IHFPL has incurred loss during the year under review as a result of the significant cost incurred in setting up its branches and hiring of employees to support business expansion and growth.

During the year under review, your Company invested Rs.50 crore and subsequent to the year under review, invested additional Rs.40 crore, in the equity share capital of IHFPL, after which the aggregate investment of your Company in equity share capital of IHFPL increased to Rs.100 crore. Subsequent to the year under review, your Company granted a loan of Rs.100 crore to IHFPL for its business and operational requirements.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report.

SHARE CAPITAL

Authorised Share Capital

During the year under review, the authorised share capital of the Company was i ncreased from Rs.90 crore, divided i nto 9,00,00,000 equity shares of face value of Rs.10/- each to Rs.110 crore, divided into 11,00,00,000 equity shares of face value of Rs.10/- each.

Issued, Subscribed and Paid-up Share Capital

During the year under review, the Company issued and allotted 3,17,460 equity shares on preferential allotment basis, to Mr. R. Sridhar, Executive Vice-Chairman and CEO of the Company.

Subsequent to the year under review, the Company issued and allotted 1,22,37,762 equity shares by way of fresh issue in the IPO and 13,01,394 equity shares pursuant to the exercise of stock options under various ESOP plans of the Company.

Subsequent to the abovementioned allotments, the issued, subscribed and paid-up share capital of the Company stands increased to Rs.92,21,84,150/- divided into 9,22,18,415 equity shares of face value of Rs.10/- each.

Your Company has not issued any equity shares with differential rights as to voting, dividend or otherwise.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company comprises 8 (eight) Directors of which 3 (three) are Non-Executive Directors, 4 (four) are Non-Executive Independent Directors and 1 (one) is a Whole-Time Director. The Chairman is a Non-Executive NonIndependent Director. The Board composition is in compliance with the requirements of the Act, the Listing Regulations and the circulars / directions / notifications issued by the RBI (“RBI Directions”). Detailed composition of the Board of Directors has been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

Appointment and Cessation of Director(s)

Cessations:

During the year under review, Mr. Vimal Bhandari resigned from the office of Managing Director & CEO of the Company with effect from April 18, 2017. Mr. Bhandari continued to serve on the Board of the Company as a Non-Executive Director from May 1, 2017 to January 11, 2018.

The Board of Directors place on record their sincere appreciation for the able leadership, valuable contribution and guidance provided by Mr. Bhandari during his association with the Company towards building and shaping the Company in to a well-respected and highly profitable credit institution.

Further, during the year under review, following Directors resigned from the Board of the Company:

- Mr. Shailesh Shirali resigned as Whole-Time Director from January 29, 2018.

- Mr. L. Brooks Entwistle and Mr. Deepak Shahdadpuri resigned as Non-Executive Director(s) from January 29, 2018, respectively.

- Ms. Shweta Bhatia resigned as Non-Executive Director from February 5, 2018.

- Mr. Ravi Narain resigned as Non-Executive Independent Director from January 10, 2018.

- Mr. Eric Stuart Schwartz and Mr. D. Sivanandhan resigned as Non-Executive Independent Director(s) from February 5, 2018, respectively.

The Board of Directors appreciates the guidance provided by Mr. Shailesh Shirali, Mr. L. Brooks Entwistle, Mr. Deepak Shahdadpuri, Ms. Shweta Bhatia, Mr. Ravi Nairain, Mr. Eric Stuart Schwartz and Mr. D. Sivanandhan, during their tenure as Director(s) on the Board of the Company and expresses gratitude for their contribution towards the Company’s growth and success.

Appointments:

Considering your Company’s growth strategy to expand its retail lending segment and the rich experience and expertise of Mr. R. Sridhar in the financial services industry, on the recommendation of the Nomination & Remuneration Committee, the Board of Directors and the Shareholders of the Company at their meetings held on April 18, 2017 and April 28, 2017, respectively, approved appointment of Mr. R. Sridhar as a Whole-Time Director designated as Executive Vice-Chairman & CEO of the Company for a period of 5 (five) years with effect from April 18, 2017.

During the year under review, Mr. Dhanpal Jhaveri, NonExecutive Director of the Company was appointed as the Chairman with effect from June 23, 2017.

Considering the resignation of the Directors and in compliance with the requirements of the Act, the Listing Regulations and the RBI Directions, and in order to strengthen the Board by inducting eminent persons having rich experience not only in the financial services industry but also other relevant fields, the Board of Directors, on the recommendation of the Nomination & Remuneration Committee and the Shareholders of the Company at their meetings held on February 5, 2018 and February 7, 2018, respectively, appointed Mr. Dinesh Kumar Mehrotra, Mr. Hemant Kaul and Ms. Naina Krishna Murthy as Non-Executive Independent Director(s) on the Board of Directors of the Company, each for a term of 5 years with effect from February 5, 2018.

Director(s) Retiring by Rotation

In terms of Section 152(6) of the Act read with the Articles of Association of the Company, Mr. Dhanpal Jhaveri, Director being longest in office, shall retire by rotation and being eligible has offered himself for re-appointment at the ensuing Annual General Meeting of the Company. A brief profile of Mr. Dhanpal Jhaveri has been included in the Notice convening the ensuing Annual General Meeting.

Director(s) Disclosures

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

The Company has received declaration from the Independent Director(s), affirming compliance with the criteria of independence as stipulated in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

Key Managerial Personnel

In terms of the Act, the following persons are the Key Managerial Personnel (“KMP”) of the Company:

1. Mr. R. Sridhar - Executive Vice-Chairman & CEO;

2. Mr. Pankaj Thapar - Chief Financial Officer; and

3. Mr. Jitendra Bhati - Company Secretary & Compliance Officer

During the year under review following changes took place in the KMPs of the Company:

- Mr. Vimal Bhandari ceased to be a KMP of the Company pursuant to his resignation from the office of Managing Director & CEO of the Company with effect from April 18, 2017;

- Mr. R. Sridhar was designated as KMP of the Company pursuant to his appointment as Whole-Time Director designated as Executive Vice-Chairman & CEO of the Company with effect from April 18, 2017; and

- Mr. Shailesh Shirali ceased to be a KMP of the Company pursuant to his resignation from the office of Whole-Time Director of the Company with effect from January 29, 2018.

RBI DIRECTIONS

Your Company complies with the direction(s), circular(s), notification(s) and guideline(s) issued by the RBI as applicable to your Company as a systemically important non-deposit taking non-banking financial company.

Your Company has complied with the provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017, with respect to the downstream investments made by it during the year under review.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors and the Secretarial Standards on General Meeting issued by the Institute of Company Secretaries of India.

DEPOSITS

Your Company being a non-deposit taking non-banking financial company (“NBFC”) has not accepted public deposits during the year under review and shall not accept any deposits from the public without obtaining prior approval of the RBI and accordingly disclosure requirements under Chapter V of the Act read with Rule 8(5)(v) and 8(5)(vi) of the Companies (Accounts) Rules, 2014 are not applicable to your Company.

RESOURCES AND LIQUIDITY

Your Company has diversified funding sources including public sector banks, private sector banks, mutual funds, insurance companies and financial institutions. Funds were raised in line with Company’s Resource Planning Policy adopted by the Board of Directors for the financial year under review, through various modes including bank borrowings, issuance of non-convertible debentures on private placement basis and commercial paper.

During the year under review, your Company has raised funds from inter-alia following sources (i) Rs.1,040 crore as bank borrowings (outstanding as on March 31, 2018: Rs.2,137.37 crore); (ii) Rs.4,355 crore by issuance of commercial paper (outstanding as on March 31, 2018: Rs.1,285 crore); and (iii) Rs.392 crore through issuance of non-convertible debentures (outstanding as on March 31, 2018: Rs.1,179.50 crore).

Applicable disclosures in terms of Regulation 34(3) and Regulation 53(f) of the Listing Regulations as on March 31, 2018 have been provided at Annexure I to this Board’s Report.

Credit Rating(s)

Your Company’s financial discipline and prudence is reflected in the strong credit ratings ascribed by rating agencies, summarised below:

Particulars / Rating Agencies	Rating	Remarks
Long Term:
- Debt Programme		The ratings indicate that the
CARE Ratings Limited	“CARE AA-; Stable”	instruments have high degree of
India Ratings and Research (“Fitch Group”)	“IND AA-/Stable”	safety regarding timely servicing
- Market Linked Debentures		of financial obligations and carry
CARE Ratings Limited	“CARE PP-MLD AA-; Stable”	very low credit risk
Short Term Debt Programme / Commercial Paper:
CRISIL Limited	“CRISIL A1 ”	The ratings indicate that the
CARE Ratings Limited	“CARE A1 ”	instruments have very strong
ICRA Limited	“[ICRA] A1 ”	degree of safety regarding timely payment of financial obligations and carry lowest credit risk. Short Term Debt Programme / Commercial Paper of your Company carry the highest rating by three major credit rating agencies.

Debt Equity Ratio

Your Company’s Debt: Equity ratio as on March 31, 2018 stood at 2.25:1.

Capital Adequacy Ratio

Your Company is well capitalised to provide adequate capital for its continued growth. As on March 31, 2018, the Capital to Risk Assets Ratio (“CRAR”) of your Company stood at 28.3% (Tier I Capital to Risk Assets Ratio was 28.0% and Tier II Capital to Risk Assets Ratio was 0.3%), well above the regulatory limit of 15% as prescribed by the RBI for nonbanking financial companies.

Net Owned Funds

The Net Owned Funds of your Company as on March 31, 2018 stood at Rs.2,119.99 crore, a 13.2% increase over the previous year.

AUDITORS

Statutory Auditors & their Report

S. R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration No. 301003E / E300005, were appointed as the Statutory Auditors of the Company at the 6^th Annual General Meeting of the Company held on September 30, 2015 to hold office for a period of 5 (five) years, from the conclusion of the said Annual General Meeting till the conclusion of the 11^th Annual General Meeting of the Company, subject to ratification by Members at every annual general meeting and delegated the powers to the Board of Directors / Committee to fix their remuneration.

The Company has received a written consent from S. R. Batliboi & Co. LLP, Chartered Accountants, for appointment as Statutory Auditors of the Company for a period of 5 years and a certificate, that they are eligible and not disqualified from being appointed as Statutory Auditors, that their appointment would be in accordance with the conditions as may be prescribed in the Act and that they satisfy the criteria provided in Section 141 of the Act and the Companies (Audit and Auditors) Rules, 2014 for appointment of statutory auditors.

Members are requested to note that the Ministry of Corporate Affairs vide notification dated May 7, 2018, inter-alia, notified an amendment to Section 139(1) of the Act whereby the requirement of placing appointment of the statutory auditors for ratification by the members of a company at every annual general meeting has been omitted. Accordingly, subject to provisions of the Act, S. R. Batliboi & Co. LLP, Chartered Accountants hold office of Statutory Auditors of the Company till conclusion of the 11^th Annual General Meeting of the Company.

S. R. Batliboi & Co. LLP, Statutory Auditors in their report(s) on the standalone audited financial statements and consolidated audited financial statements of your Company for the financial year ended March 31, 2018, have not submitted any qualifications, reservations, adverse remarks or disclaimers.

During the year under review, the Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company.

Secretarial Auditors & their Report

In terms of Section 204 of the Act, the Board of Directors had appointed M Siroya and Company, Practicing Company Secretary, to undertake secretarial audit of the Company for the financial year ended March 31, 2018. The report of M Siroya and Company, Practicing Company Secretary in prescribed Form MR-3 is enclosed herewith at Annexure II to this Board’s Report.

M Siroya and Company, Practicing Company Secretary, in their report on the secretarial audit of your Company for the financial year ended March 31, 2018 has not submitted any qualifications, reservations, adverse remarks or disclaimers.

Maintenance of cost records

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

REPORT ON CORPORATE GOVERNANCE

The Corporate Governance Report for the year under review, including disclosures as stipulated under Regulation 34 of the Listing Regulations is annexed to and forms an integral part of this Board’s Report.

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

Meetings

The Board meets at regular intervals inter-alia to discuss and review various matters including business performance, business strategies and policies. During the year under review, the Board met 7 (seven) times and several meetings of Committees including the Audit Committee were held. Details with respect to the meetings of the Board of Directors and Committee(s) held during the year under review, including attendance by Directors / Members at such meetings have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

Board Committees

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

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

Details with respect to the composition, terms of reference, number of meeting(s) held and attended by respective member(s), roles, powers and responsibilities of the Committee(s) have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

PERFORMANCE EVALUATION

In terms of the provisions of the Act and the Listing Regulations, the Board of Directors adopted a Board Performance Evaluation Policy and detailed process for facilitating performance evaluation of the Board, as a collective entity, that of its Committee(s) and individual Directors including the Chairman.

In terms of the requirement of Schedule IV of the Act, a separate meeting of the Independent Directors was held on March 23, 2018 to review the performance of the NonIndependent Directors including the Chairman and the Board, as a collective entity. Performance evaluation was carried out by way of obtaining feedback from the Independent Directors through a structured questionnaire prepared in accordance with the Board Performance Evaluation Policy and Performance Evaluation Process.

Based on the questionnaire circulated and discussions at the Independent Directors meeting, the Independent Directors expressed satisfaction with the overall performance of the Board and Non-Independent Directors including the Chairman. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board based on various parameters viz. detailed information on business and support functions provided to the Board, action taken by management on suggestions / request by the Board / Committee(s) Members, in-depth discussions at the Board / Committee(s) Meetings and found it to be adequate enough to assist the Board / Committee(s) in performing its duties effectively and reasonably.

Subsequent to the year under review, the Nomination & Remuneration Committee evaluated the performance of the Directors and the Board evaluated the performance of the Directors, Committee(s) of the Board and the Board, as a collective entity, for the year under review. The Nomination & Remuneration Committee and the Board affirmed that the performance of the Board, Committee(s) of the Board and the Directors including the Chairman, during the year under review was satisfactory and adequate.

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

POLICY ON APPOINTMENT OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

In terms of Section 178 of the Act, the Listing Regulations and the RBI Directions, the Board of Directors adopted a Policy on Selection Criteria / “Fit & Proper” Person Criteria inter-alia setting out parameters to be considered for appointment of Directors and senior management personnel of the Company.

Details of the Policy on Selection Criteria/ “Fit & Proper” Person Criteria have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

REMUNERATION POLICY, DISCLOSURE OF REMUNERATION & PARTICULARS OF EMPLOYEES

Remuneration Policy

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

Details of the Remuneration Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

Employee Remuneration

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

Statement containing details of employees as required in terms of Section 197 of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection by the Members at the Registered & Corporate Office of the Company during normal business hours on all working days. A copy of the statement may be obtained by the Members by writing to the Company Secretary at the Registered & Corporate Office of the Company.

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

CEO & CFO CERTIFICATE

Compliance Certificate in terms of Regulation 17(8) of the Listing Regulations on the audited financial statements and other matters prescribed therein, submitted to the Board of Directors by the Executive Vice-Chairman & CEO and the Chief Financial Officer of the Company, for financial year ended March 31, 2018 is enclosed herewith at Annexure IV to this Board’s Report.

RISK MANAGEMENT FRAMEWORK

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

The Risk Management Committee of the Company has not identified any elements of risk which in their opinion may threaten the existence of your Company. Details of the risks and concerns relevant to the Company are discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report.

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

INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company’s well-defined organizational structure, documented policies, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal system / policies and applicable laws. The internal control system / policies of your Company is supplemented with internal audits, regular reviews by the management and checks by external auditors. The Audit Committee and the Board of Directors monitor the internal controls system / policies of your Company. The Risk Management Committee and the Audit Committee periodically review various risks associated with the business of the Company including fraud risk and risk mitigants, and ensure that they have an integrated view of risks faced by the Company. The Board of Directors are of a view that your Company’s internal control systems are commensurate with the nature of its business, size and complexity of its operations.

To the best of our knowledge and belief, and according to the information and explanations obtained by us, and based on the report(s) of Statutory Auditors and submission(s) by Internal Auditors of the Company for the financial year under review, the Directors are of the view that the internal financial controls with reference to the financial statements of the Company were adequate and operating efficiently and further confirm that:

(i) the Company has comprehensive internal financial control systems that are commensurate with the size and nature of its business;

(ii) the Company has laid down standards, processes and structures which enable implementation of internal financial control systems across the organization and ensure that the same are adequate and operating effectively;

(iii) the systems are designed in a manner to provide reasonable assurance about the integrity and reliability of the financial statements;

(iv) the Company adopts prudent lending policies and exercises due diligence to safeguard its loan asset portfolio; and

(v) the loan approval process involves origination and sourcing of business, credit appraisal and credit approval in accordance with approved processes / levels.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

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

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

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and in light of your Company’s philosophy of being a responsible corporate citizen, the Board of Directors adopted a CSR Policy which lays down the principles and mechanism for undertaking various projects / programs for the Company’s CSR activities.

Details of the CSR Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

Disclosures in terms of Section 134(3)(o) and Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, with respect to CSR activities undertaken by the Company during the year under review have been provided at Annexure V to this Board’s Report.

CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES AND RELATED PARTY TRANSACTION POLICY

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

In terms of Section 177 of the Act, transactions with related parties were placed before the Audit Committee for its approval. Omnibus approval of the Audit Committee was obtained for related party transactions of repetitive nature, within the limits prescribed by the Board of Directors. The Audit Committee is periodically updated with respect to related party transactions executed under omnibus approval.

During the year under review, your Company had not entered into any related party transactions covered within the purview of Section 188(1) of the Act, and accordingly, the requirement of disclosure of related party transactions in terms of Section 134(3)(h) of the Act in Form AOC - 2 is not applicable to the Company. All other transactions with related parties, during the year under review, were in compliance with the Related Party Transaction Policy. Further, during the year under review, the Company had not entered into transactions with related parties which could be considered to be ‘material’ in accordance with the then effective Related Party Transaction Policy of the Company.

Disclosure of the related party transactions as required under Accounting Standard 18 are reported in Note 25 of the standalone audited financial statements of the Company for the financial year ended March 31, 2018.

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

During the year under review, your Company has made investment in (i) equity share capital of IHFPL, as mentioned herein; (ii) bonds, debt instruments in terms of Investment Policy of the Company; and (iii) liquid securities including in units of mutual funds in terms of the Treasury Policy of the Company. For details of the non-current and current investments of the Company, please refer Note 10 and Note 15, respectively, of the standalone audited financial statements of the Company for the financial year ended March 31, 2018.

Details of Investment Policy and Treasury Policy are provided in the Corporate Governance Report which is annexed to and forms an integral part of this Board’s Report.

EXTRACT OF ANNUAL RETURN

In terms of Section 134(3)(a) and Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, the extract of Annual Return as at financial year ended March 31, 2018 in the prescribed Form MGT-9 has been provided at Annexure VI to this Board’s Report and is also available on the website of the Company at http://www.indostarcapital.com/investors.html#agm-wrap.

EMPLOYEE STOCK OPTION PLANS (“ESOP PLANS”)

Your Company believes that its success and ability to achieve objectives is largely determined by the quality of its workforce and recognises that not only good employment opportunities but also additional motivating mechanisms are needed to incentivise employees and aligning their interest with the interest of the Company. In recognition of the said objective, the Company adopted and implemented IndoStar ESOP Plan 2012 (“ESOP 2012”), IndoStar ESOP Plan 2016 (“ESOP 2016”) and IndoStar ESOP Plan 2016-II (“ESOP 2016-II”).

During the year under review, in light of Company’s pace of growth, increase in business volume and business verticals / financial products of the Company / its subsidiaries, your Company adopted IndoStar ESOP Plan 2017 (“ESOP 2017”) and IndoStar ESOP Plan 2018 (“ESOP 2018”) to attract, retain, motivate and incentivise employees of the Company and its holding / subsidiaries.

During the year under review, ESOP 2012 was amended in order to align it with the statutory requirements of Section 62(1)(b) of the Act, the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“SEBI ESOP Regulations”) and other applicable laws.

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

The Board of Directors confirms that the ESOP Plans are in compliance with the provisions of the Act and the SEBI ESOP Regulations. In terms of Regulation 13 of SEBI ESOP Regulations, the Statutory Auditors have certified that ESOP Plans have been implemented in accordance with the SEBI ESOP Regulations and the respective resolutions passed in the general meeting(s) in this regard. The said certificate from Statutory Auditors shall be available for inspection at the ensuing 9^th Annual General Meeting of the Company.

Disclosure with respect to the ESOP Plans in terms of Section 62 of the Act read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, have been provided at Annexure VII to this Board’s Report.

Disclosures in terms of Regulation 14 of the SEBI ESOP Regulations read with SEBI Circular No. CIR/ CFD/POLICY CELL/2/2015 dated June 16, 2015 are available on the website of the Company at http://www.indostarcapital.com/investors.html#agm-wrap.

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

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

Considering geographic diversification throughout the country and increase in number of employees, during the year under review, the Board of Directors also constituted Regional Internal Complaints Committees for North, West and South regions.

During the year under review, no complaints related to sexual harassment had been received by the Internal Complaints Committee(s).

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

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

During the year under review, your Company did not have any foreign exchange earnings and incurred foreign currency expenditure of Rs.0.50 crore (Previous year: Rs.0.11 crore).

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

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

DIRECTORS RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, the Directors hereby confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

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

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

APPRECIATION AND ACKNOWLEDGEMENT

The Directors take this opportunity to express their appreciation to all stakeholders of the Company including the Reserve Bank of India, the National Housing Bank, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Government of India and other Regulatory Authorities, the Depositories, the BSE Limited, the National Stock Exchange of India Limited, Bankers, Financial Institutions, Members, Customers and Employees of the Company for their continued support and trust. Your Directors would like to express deep appreciation for the commitment shown by the employees in supporting the Company in achieving continued robust performance on all fronts.

By the Order of the Board of Directors

For IndoStar Capital Finance Limited

Dhanpal Jhaveri

Place: Mumbai Chairman

Date: August 10, 2018 DIN: 02018124