The Board of Directors of Manappuram Finance Limited have pleasure in presenting before you the Thirty First Annual Report of the Company together with the Audited Standalone and Consolidated Statements of Accounts for the financial year ended March 31, 2023.

1. Diversification of Business

I ncorporated in 1992, your Company is operating in the NBFC sector, with diversified businesses and a branch size network of 5232.

The primary objective and increased thrust of our diversification and rebalancing strategy is to emerge as a "diversified NBFC” with at least a 50% AUM being contributed by the non-gold loan business. With this, we aim to reduce our dependence on Gold Loan Assets Under Management (AUM) alone and achieve a comfortable balance between our new lines of business and gold loans.

The Company's strategy is to strengthen both Gold and Non-Gold segments. It is also working on growing its

Gold Loan segment along with other business segments and maintaining its gold loan yield, irrespective of pricing pressures. We aim to achieve a 50-50 mix between Gold Loans and other diversified business segments.

The Company is focusing on serving customers at the bottom of the pyramid through other business segments like affordable housing finance, vehicle and equipment finance, which includes commercial vehicle loans, two-wheeler loans, tractor & car loans; microfinance, SME finance, project and industrial finance, corporate finance and insurance broking. In the last 4-5 years, the Company has made significant progress in each of these new business segments, having steadily scaled up its operations by leveraging its existing customer base of Gold Loans, extensive and growing branch network, and capitalising on the goodwill of Brand Manappuram.

Through the process of diversification, we aim to address several key business paradigms, the prime among which is to enhance regulatory comfort by migrating from a single product NBFC to a multi-product and diversified financial services provider, serving the needs of existing and new customers. Finally, the move on diversification also enables your Company to play contribute towards accelerating financial inclusion by addressing the needs of the unserved and under-served segments of the society.

The Company also improved its credit monitoring, which play a critical role in facilitating responsible lending across the non-gold businesses. By mitigating the risks and ensuring credit quality, we maintain a healthy environment for the Company. The monitoring function in the Company covers 2 stages. One, verification fixed percentage of accounts immediately after the disbursement, and two, verification of risk-based accounts subsequently (for eg., immediate delinquent).

The Credit Monitors conduct 360-degree due diligence of loans randomly selected by National Credit Head of the company. These are verified for any credit/valuation/ legal process lapses and informed about to National Credit

Head on time. This ensures completeness of documents in the file and nil negligence on any process/policy. This is post-disbursement visit at employment and property of the customers, which is randomly selected by National Credit Head and ensures nil negligence on any process/ policy. It ensures overall compliance in credit/operations related works across the branches. These Credit Monitors visit branches frequently and submit the visit report to the National Credit Head.

The Company's credit monitoring policies play a critical role in facilitating responsible lending across the non-gold verticals. By mitigating the risks and ensuring the credit quality of the company, a healthy environment for the company and borrowers is maintained.

Loan underwriting is the comprehensive assessment and evaluation of a borrower's credit worthiness and ability to repay a loan. The underwriting process involves a careful examination of various financial factors such as credit history, income, assets, debt levels and overall financial stability. The importance of this process is risk mitigation, credit quality and regulatory compliance

Underwriting rules, process, and systems are in place for the company. Different verticals have a well-documented underwriting policy which help evaluate the credit worthiness of borrowers, thereby containing credit risk to the maximum. The Company's credit policies for Non-Gold Loan verticals ensure good quality credit underwriting through better credit assessment, financial analysis, collateral evaluation and risk-based pricing.

Credit assessment begins with a thorough examination of the borrower's credit history which includes reviewing credit scores, payment history, outstanding debts and any derogatory marks. The borrower's financial statements are analysed to assess their repayment capacity, considering factors like employment stability, income level and debt-to-income ratio to determine how comfortably the borrower can meet his loan obligations. In collateral evaluation, the value and quality of collateral offered by the borrower to secure the loan is assessed through risk-based pricing methodologies to determine if the interest rates and loan terms offered are decided. Higher risk borrowers will have higher interest rates to compensate for increased likelihood of default of and lower risk borrowers can have favorable rates and terms.

I mproved loan underwriting policies also play a critical role in facilitating responsible lending and providing with valuable insights to make informed decisions regarding loan approvals terms and interest rates. By mitigating risks, ensuring credit quality and adhering to regulatory requirements, the Company's underwriting policy helps in fostering a healthy environment for the company and its borrowers.

I n the financial services industry where multiple entities offering a slew of products co-exist, retaining existing customers and acquiring new customers has become the key to success. The changing demographic profile of customers in India, with 58% of these aged between 18-35 years, is another decisive factor as it becomes very important to understand their tastes, preferences, and behavioural patterns to design products customised as per their needs.

MAFIL's CRM is embedded in various business functions

such as lending and customer service to ensure that customers' needs are at the forefront of all the business processes. MAFIL believes that customer satisfaction, customer loyalty and customer retention add to the overall profitability and efficiency of the organisation. Retained customers significantly bring down marketing and promotional cost as satisfied customers also bring in more customers through referrals and word of mouth publicity.

MAFIL has developed a robust CRM with a clear overview of customer profile facilitated by business intelligence and analytics. The CRM dashboard provides Relationship

Managers an overview of customers' history, status of credit facilities, due dates for servicing loans, outstanding customer service issues, among other things. Such data helps MAFIL in effective management of collection, lead generation and its ultimate conversion to sales.

The CRM team maintains a close relationship with its borrowers, which facilitates collection of their instalments on the due date. The relationship helps MAFIL maintain delinquencies in the Non-Gold verticals at low levels and can be considered amongst the best in the industry. Relationship with customers has also facilitated more cross-selling opportunities and has helped increase collections from borrowers who had earlier defaulted on their loans.

Today, the Non-Gold businesses contribute 44.3% to the Total AUM. Gold Loan contributes the remaining 55.7%.

During the year under review, the Company's Total AUM stood at ' 354,522.57 million vis-a-vis ' 302,608.16 million in FY2022.

Among the business segments, Microfinance AUM grew from ' 70,021.83 million in FY2022 to ' 100,408.93 million in FY2023. Vehicle and Equipment Finance and Onlending Business ended the year with an AUM of ' 24,551.40 million (compared to ' 16,431.60 million in FY2022) and ' 10,048.22 million (vis-a-vis ' 315.59 million in FY2022), respectively. Manappuram Home Finance Limited, the Company's housing subsidiary, ended the year with an AUM of ' 10.95 billion, compared to ' 8.45 billion in the earlier year. The other business verticals of the Company include Payments business, SME business and fee-based services, including Forex and Money Transfer.

Vehicle & Equipment Finance

The vehicle finance portfolio is about '24551.40 million spread across 281 locations in 23 states as of March 31, 2023. The preowned commercial vehicles portfolio is '13,150 million and new commercial vehicles are of 701 million with 23,413 contracts. The two-wheeler finance portfolio is of '4,256 million with 1,06,227 contracts, Car finance portfolio is of '5017million with 15422 contracts and other vehicle loans make up a portfolio of around '1,428 million. The business is supported by robust pre-screening methodologies and credit assessment for a healthy portfolio mix.

• Market is bullish towards commercial vehicle as in the budget 2023 a lot of emphasize has been

given on building of the infrastructure. Focus on warehouse and logistic infrastructure to result in higher demand for Small Commercial Vehicle & Heavy Commercial Vehicle.

• Used car market growing faster in tier 1 & 2 cities and rural area because of emission norms are changing in metro cities due to increase in pollution and Govt. restrictions on old vehicles in metros. This will continue to be so in the coming years. According to a study, up to Financial Year 2025 used car market share will be 70% in non-metro and 30% in metro.

• NBFC's have close to 60% market share in tractor financing space followed by pvt banks taking the remaining 38% market share. PSU banks have the remaining 2% share. Average loan size is increasing to '0.5 Million from '0.4 Million earlier and average IRR in new tractor is @ 14%.

• The India Two-Wheeler Market is expected to grow at a CAGR of around 3% during the forecast period

2022-2028.

MSME and Personal Loan Business

MSMEs are an important sector for the Indian economy and have contributed immensely to the country's socio-economic development. It not only generates employment opportunities but also works together towards the development of the nation's backward and rural areas. To tap the potential of growing MSMEs across the country, having started MSME lending from a zero base in January 2019, we could easily see there was good demand for such loans. Simultaneously we started Micro Home Loans and Personal Loans to provide affordable loans to the MSME customers. Accordingly, within a short period, we went ahead and scaled up the business to new geographies like Tamil Nadu, Karnataka, and Andhra Pradesh etc. Our initial focus remained on the southern states where we targeted the local 'Kirana' shops and small industrial establishments. We were careful to exercise due care when vetting the loan applications and in this we were helped by our pool of existing gold loan customers who gave us good leads about quality borrowers.

Interestingly, we started this new line of business without recruiting anyone from the market with prior experience in MSME lending. Instead, the employees were selected from our home-grown gold loan employees based on their contact with the relevant micro-markets, and after assessing their aptitude to handle this new line of business. We also chose to explore a different path by recruiting fresh youngsters as field sales representatives for the purpose of interfacing with quality MSME borrowers.

We were confident that MSME lending would be one of the major growth areas for us given that entrepreneurship at the grassroots is taking off in a big way. To serve a broader

Category 2 License holder from RBI. In December 2017, Manappuram Finance Limited received RBI's License to act as the Indian Agent for Western Union Money Transfer. We aLso act as sub-agents to the Indian representatives of other companies providing money transfer inward remittance. Following are the highlights of our fee-based services: -

• Tie up with Eight money transfer agencies for inward remittance.

• About 60% of the inward remittance is contributed by Western Union. As an Indian agent of Western Union, we can appoint sub - agents to work on our behalf all over India.

• Turnover of MTSS business is around '105 Million

per month.

• We have 23 active sub-agents for Western Union business who contributes about '16.5 MiLLion of the business per month.

Payments Business

I t was in March 2017 that Manappuram Finance Limited received RBI's authorization to issue prepaid payment instruments (payment waLLet) and went on to Launch the MAkash wallet. A mobile wallet is a way to carry cash in digitaL format that promotes the country's cashLess payments initiative. Customers can Load money into the wallet using a credit card, debit card. Alternatively, they can walk into any of the MAFIL branches across India and Load cash into the waLLet without any extra cost. With over one Lakh customers, MAkash has registered steady growth. The wallet registers an average of 19,508 transactions per annum valued at about '125.5 Million. Customers can avail the assistance of MAFIL Branches to create the wallet and conduct transactions. The following services are available with MAkash Online and Offline modes:

• Phone Recharge & DTH: With money Loaded in your MAkash wallet, it takes just seconds to make phone and DTH recharges.

• Bill Payments: Pay all your bills across categories via MAkash in no time and avoid Late payment charges.

• Transfer money to Bank: You can Load money from your Credit card/ Debit Card and send it to any bank

account in India, any time.

State of Affairs of Our Subsidiaries

Asirvad Micro Finance Limited (AMFL)

Asirvad Microfinance Limited ("AMFL/ Company”) was formed with the intention of providing financial access to the underserved through the formation of a commercially viable business. The Company has successfully started in Tamil Nadu and is incorporated under the Companies Act, 1956 on 29^th August, 2007. Access to financial services is perhaps one of the most important requirements of any household across the world and in turn leads to access to other services and consequently better standard of living. AMFL has obtained NBFC License from the Reserve Bank of India on 14^th December 2007. Started forming groups from 15^th December 2007, and first lending operations with effect from 21^st January 2008. The Company's Vision is "Small loans, Big dreams."

In February 2015 Manappuram Finance Limited took over the Company with the stake of 85%. After the takeover, AMFL was able to leverage its parent's credit worthiness. It got better access to bank finance at significantly lower cost and expanded to new geographies like Madhya Pradesh, Chhattisgarh, Punjab, Haryana, Chandigarh, Jharkhand, Bihar, West Bengal, and Uttar Pradesh the portfolio touched ' 10,000 million AUM (Asset Under Management) by end of 2015 -16.

Performance of the Company

The company was able to grow its business substantially in the first full year of operations after its takeover. The net profit for the year ended March 31, 2016, has gone up to '239.6 Million. Fiscal year 2016-17 was overall a good year for AMFL as it was able to grow its business substantially to end the year with an AUM of nearly '18,000 Million on an 80% increase compared to the year ago.

MFI Loans

Currently, the Company has a presence in 23 states and 2 union territories. The Company's AUM stands at

'100,408.9 Million (MFI AUM - '92,972.1 Million) and it represents a significant accomplishment. The total centres are 3,25,274 which includes 1206 branches with 29 Lakh active members. The single-point objective of the Company is to make a valuable contribution towards the lives of our customers, and we made it a point to stand strong with them even during the tough pandemic days by introducing new loan products. AMFL is determined to serve the customers keeping their best interests in mind.

MSME Loan

MSME Business commenced in the month of July 2019. The loan products, process and people focus on enhancing the economic output of customers. It caters to the "Missing Middle" segment largely comprising of small businesses like Kirana Shops, Small Manufacturing units, Agri and Allied trading etc., The non-traditional methods of income assessments not only have given good results but are also well appreciated by customers. All MSME loans are backed with land and building as collateral. Total number of branches are 25, and the AUM is '363.9 Million.

Gold Loan

A new loan product called "Gold Loan" was launched in Odisha and West Bengal on March 10, 2021. This was

introduced with a key objective to help customers on-going business capital for income generation activity. Thereby, so far Asirvad has launched 461 branches of Gold Loan in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Telangana, Uttar Pradesh & West Bengal.

The Company offers progressively higher loan amounts at higher price points through different Gold loan schemes with different interest rates. Asirvad is intensely looking to expand business. As a Company, AMFL believes in the power of technology and over the years have adopted various innovations such as Loan Management System (LMS) and usage of DigiPay and other digital platforms for payment, with many more initiatives in the pipeline. Automation has enriched the lives of both employees and customers without compromising on the quality of work done. AMFL is constantly looking for ways to improve knowledge and skills of employees and, based on this consideration, the Company has introduced the Learning Management System to create awareness, knowledge, and vigilance.

Manappuram Home Finance Limited (MAHOFIN)

MANAPPURAM HOME FINANCE LIMITED (MAHOFIN), a wholly owned subsidiary of Manappuram Finance Limited, started operations in January 2015 and focuses on affordable housing loans and aims to cater to the needs of mid-income to the low-income group. The housing finance business registered 29.64 per cent growth in its AUM in Fiscal 2023, posting a CAGR of 16 per cent in the past five years. It reached an AUM of '10957.70 million as on March 31, 2023. Currently, there are 66 branches across 12 states. The southern region contributes the largest share of the loan portfolio. Considering the increasing urbanisation and the rise of tier II and tier III cities, the Company is also planning to cover nearby states and locations.

Positioned as an affordable home finance company, target customers are the self-employed from the unorganised sector and others lacking access to credit facilities from mainstream financial institutions. The Company offers two products - Home Loans and Loans Against Property. The average ticket size of a Home Loan is about '0.67 million, and for the LAP segment, it stands at about '0.60 million.

As a part of digitisation, the Company has introduced the "Mobile-Customer Acquisition System" (mCAS) for faster processing of loan applications and "Mobile Collect" (M-Collect) for speeding up the collection process.

The Company is looking to diversify funding sources and in

October 2019 it succeeded in raising about '943.19 million by a public issue of NCDs. The portfolio faced minimal

delinquencies with GNPA held at 1.87%. The Company has a capital adequacy ratio around 33.13% (well above the regulatory requirement).

Manappuram Insurance Brokers Limited (MAIBRO)

Manappuram Insurance Brokers Limited (MAIBRO) a

Licensed Insurance Broker with (Insurance Regulatory and Development Authority of India) began its journey in the year 2006. Being a direct insurance broker licensed by Insurance Regulatory and Development Authority of India (IRDAI) for doing life and non-life business the growth of the company was steady. Company during the year was recognised among the 10 best insurance broking startup 2023, for its innovative, technologically driven digital insurance platform "MaSuraksha”. Masuraksha is an innovative e-commerce portaL operated by Manappuram Insurance Brokers.

As an IRDAI-Licensed direct insurance broker, the company primarily deals with Life and General Insurance products in the retail segment. Two-wheeLer, automobile, health, term, investment pLans, shopkeeper poLicy, homeowners policy, personal accident insurance, critical sickness policy, trip and hospitaL cash poLicy were among the product segments provided. The company's success mantra has been its intelligent after-sales support, which guides consumers through the insurance process. In the portal, there is access granted to agents (POSP), who can then sell different policies to clients via a separate POSP Login module. The customer service team is available 24 hours a day, seven days a week. The smooth customer purchase journey, prompt claim support, prompt renewal, and other service support had been significantly aiding the company's growth.

Company due to its extensive knowledge of changing consumer requirements and the numerous insurance options available in the market offered products as per the customers requirement. Customers can choose the best product after comparing it to other options. We supplied contact centres or chat support whenever customers needed it. Manappuram Insurance Brokers was supported by a team of seasoned people who are continuously on the lookout for ways to provide timely service delivery. A full-service claims support team was also available to help with claim settlement.

Furthermore, customers had access to help 24 hours a day, seven days a week where they will receive a response within a few hours. Since the portal was in its early stages, the company was constantly working towards introducing new features and services. To generate the required innovation, cutting edge technologies like AI and block chain technology were combined. Because cyber security is critical, Manappuram had already adopted precautions similar to those of an insurance firm.

The Company ended the fiscal year 2022-23 at '1625.8 million of total business of which new business was of

'1412.1 million in the fiscal. Company during the year served 1.062 million customers. MAIBRO achieved a net

profit of ' 31.5 million in FY 2022-23 vs ' 33.31 million in FY 2021-22 and is constantly in a thrive to achieve new hights by focusing to digitalise the solicitation process.

Company had over 8500 Point of sales Agents who were working PAN India and helped in penetration of Insurance Products among all sectors of people. Company supported families during the difficult hours and has been able to

successfully settle 95% of claims reported.

Manappuram Comptech and Consultants Limited

Manappuram Comptech and Consultants Limited (MACOM), another subsidiary of your company, concluded the year with total revenue of '407.30 million. The Company's revenue portfolio has grown by '103.09 million. The company provides audit and taxation services, as well as core IT services, to meet a variety of market needs, such as application development for digital personal loans, loan management solutions, microfinance solutions etc. During the year, MACOM has successfully completed cloud migration of the parent company and has provided oracle-based cloud platforms to other fellow-subsidiaries. The company built a name for itself during the year by producing totally android-based apps for EMI collection, customer and agent collection, and so on. MACOM's net profit was '34.27 million in FY 2022-23, compared to INR 18.25 million in FY 2021-22, and the company is prepared to take off from here. MACOM has successfully achieved ISO 27001:2013 Information Security Management Systems Certification.

2. Subsidiaries Performance

Your Company holds 97.60% equity shares of

M/s. Asirvad Microfinance Limited, 100% equity shares of M/s. Manappuram Home Finance Limited, 100% equity

shares of M/s. Manappuram Insurance Brokers Limited and 99.81% of Manappuram Comptech and Consultants Limited as on March 31, 2023.

Asirvad Microfinance Limited

Gross Income of the Company as on March 31, 2023 is '17,592.76 Million as compared to '13,996.99 Million ('14118.89 reinstated Gross Income) for the year ended March 31, 2022 and Profit After Tax is '2,181.30 Million for the year ended March 31, 2023 as compared to '134.32 Million ('152.56 reinstated PAT) for the year ended March 31, 2022.

Manappuram Home Finance Limited

Gross Income of the Company as on March 31, 2023 is '1657.41 million as compared to '1226.07 million for the year ended March 31, 2022, and Profit After Tax is '194.69 million for the year ended March 31, 2023 as compared to '72.11 million for the year ended March 31, 2022. AUM of the Company as on March 31, 2023 is '10957.70 million.

Manappuram Insurance Brokers Limited

MAIBRO has entered a tie-up with the best insurance companies in the market, which helped the Company in providing best quotes and services to its customers. MAIBRO offered insurance products of 35 insurance companies through new portal and all companies offline.

Gross income of the Company for the year ended March 31, 2023 stood at '121.9 million as compared to '113.26 million for the year ended March 31, 2022 and

Profit After Tax for the year ended March 31, 2023 is '31.5 million as compared to '33.31 million for the year ended March 31, 2022.

Manappuram Comptech and Consultants Limited

Manappuram Comptech and Consultants Limited's gross income for the financial year ended March 31, 2023 is '409.76 million, compared to '307.07 million for the year ended March 31, 2022, and profit after tax for the year ended March 31, 2022, is '26.62 million, compared to profit of '13.27 million for the year ended March 31, 2023.

Salient features of financial statements of the Company's subsidiaries in Form AOC-1 and highlights of the

performance of subsidiaries are annexed with the Directors' Report as Annexure - I

3. Transfer to Reserves

The amounts proposed to be transferred to the General Reserve and Statutory Reserve etc. are mentioned in the Financial Highlights under the heading 'Appropriations.'

During the FY 2022-23, the Company has utilized 'Nil

with regards to adoption of Ind AS 116 "Leases” from Retained earnings.

The total standalone reserves and surplus as on March 31, 2023 stands at '88,106.29 million

4. Debenture Redemption Reserve

Pursuant to notification issued by Ministry of Corporate

Affairs on August 16, 2019 in exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government amended the Companies (Share Capital and Debentures) Rules, 2014.

In the principal rules, in rule 18, for sub-rule (7), the limits with respect to adequacy of Debenture Redemption Reserve and investment or deposits for listed companies (other than All India Financial Institutions and Banking Companies as specified in sub-clause (i)), Debenture Redemption Reserve is not required to maintain in case of public issue of debentures as well as privately placed debentures for NBFCs registered with Reserve Bank of India under section 45-IA of the RBI Act, 1934.

5. Resources

The Company, as an NBFC, mobilization of resources at optimal cost and its deployment in the most profitable and secured manner constitutes the two important functions of the Company. The main source of funding for the Company continues to be credit lines from the banks and financial institutions. Your Company as at March 31, 2023 availed various credit facilities from 27 banks, 1 NBFC (Bajaj Finance), NABARD and International Finance Corporation (IFC).

Management has been making continuous efforts to broaden the resource base of the Company to maintain its competitive edge. The next important source of funding is the issue of Secured Redeemable Non-Convertible Debentures (NCDs). In addition, the Company also raised funds through the issue of Commercial Papers (CPs).

Your directors are confident that the Company will be able to raise adequate resources for onward lending in line with its business plans.

6. Management Discussion And Analysis

Management Discussion and Analysis Report is attached

and forms an integral part of the Annual Report. The report discusses in detail the overall industry situation, economic developments, sector-wise performance, outlook, and state of the company's affairs.

7. Report on Corporate Governance

The Company has been practicing principle of good Corporate Governance over the years. The endeavor of the Company is not only to comply with the regulatory requirements but also to adhere to good Corporate Governance standards that lay strong emphasis on integrity, transparency, and overall accountability. The report on corporate governance forms an integral part of the Annual report.

8. Business Responsibility and Sustainability Report

Pursuant to Regulation 34(2)(f) of the Listing Regulations,

the Business Responsibility and Sustainability Report is annexed and forms part of the Annual Report.

9. Director's Responsibility Statement Pursuant to Section 134 of the Act

The Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there is no material departures;

ii. That the accounting policies as mentioned in note no.1 to no.7 to the Standalone financial statements and note no.1 to no.8 to the Consolidated financial statements have been selected and applied consistently and judgments and estimates have been

made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company

for the year ended on that date;

iii. 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;

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

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during FY 2022-23.

10. Meetings of the Board

During the financial year 2022 - 23, 8 (Eight) meetings of

the Board of Directors were held. The details of the said meetings and other Committee meetings are given in the Corporate Governance Report.

11. Declaration from Independent Directors on Annual Basis

Your Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet criteria as mentioned in Section 149 of the Act and SEBI LODR. Your Company has also received undertaking and declaration from each director on fit and proper criteria in terms of the provisions of Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 ("RBI NDSI Master Directions, 2016”).

12. Proficiency of Independent Directors Appointed During the Year

I n the opinion of the Board of Directors of the Company,

Independent Directors on the Board of Company hold the highest standards of integrity and are highly qualified, recognized, and respected individuals in their respective

fields. It's an optimum mix of expertise (including financial expertise), leadership and professionalism. All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs ('MCA') towards the inclusion of their names in the data bank maintained with it and they meet the requirements of proficiency self-assessment test.

13. Policy on Board Composition & Compensation

The Board of Directors has adopted a policy on director's appointment and remuneration for directors, Key Managerial Personnel and other employees including criteria for determining qualification, positive attributes, and independence of directors as laid down by the Nomination Committee of the Board in compliance with the provisions of Section 178 of the Act. The Policy on Board composition and compensation is annexed to this report as Annexure - II and also hosted on the website of the Company at https://www.manappuram.com/public/uploads/ editor-images/files/B0ARD%20Composition%20May%20 2023%20%281%29.pdf

14. Particulars of Loans, Guarantees or Investments

The loan made, guarantee given, or security provided in the ordinary course of business by a NBFC registered with the Reserve Bank of India are exempt from the applicability of the provisions of Section 186 of the Act. As such, the particulars of loans and guarantees have not been disclosed in this Report. For details of investments of the Company, refer to Note no.10,11,20,and 42 of the Standalone Financial Statements.

15. Particulars of Contracts or Arrangement with Related Parties

The contracts/ arrangements/ transactions entered by the Company during the financial year 2022 - 23 with related parties under Section 188 of the Act were in the ordinary course of business and on arms' length basis. During the year, the Company had not entered any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Company's policy on related party transactions. Therefore, particulars of contracts/ arrangements with related parties under Section 188 in Form AOC-2 are not annexed with this report. Your directors draw the attention of the Members to Note. 42 of the Standalone Financial Statement which sets out related party disclosures.

The Policy on determination of related parties and dealing with related party transactions as approved by the Board of Directors of the Company is annexed to this report as Annexure - III and also made available on the Company's website at https://www.manappuram. com/public/uploads/editor-images/files/MAFL-RPT%20 Policy-Revised.pdf

16. Dividend

Four interim dividends at the rate of 0.75 paise per equity share were declared during the financial year 2022-23 on May 18, 2022, August 04, 2022, November 12, 2022, and February 03, 2023.

An aggregate of '3.00 (Rupees Three Only) per equity share, amounting to 150% of the paid-up value of the shares was paid by the Company during the financial year 2022-23.

The Dividend Distribution Policy as per the SEBI LODR is made available on the Company's website at https:// www.manappuram.com/public/uploads/editor-images/ files/Dividend%20Distribution%20policy%20 %28formated%29.pdf

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

The information in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule (8) (3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure - IV.

18. Risk Management Policy

The Company has a Board of Directors approved Risk Management Policy wherein material risks faced by the Company including Operational Risk, Regulatory Risk, Price, Interest Rate Risk and Credit Risk are identified and assessed. The Risk Management Committee periodically reviews the various risks faced by the Company and advises the Board on risk mitigation plans. Elements of risk identified by the Board are mentioned in the MDA part of the annual report.

The Board has appointed a Chief Risk Officer as the asset size of the Company is above '50 billion with a tenure of One year subject to re-appointment by the Board every financial year.

Risk Management policy may be accessed on the Company's website at the link: https://www.manappuram. com/Dublic/uoloads/editor-imaQes/files/No.2-ERM%20

Policy.pdf

19. Corporate Social Responsibility Policy

Corporate Social Responsibility Policy (CSR Policy)

indicating the activities to be undertaken by the Company have been formulated by the Board of Directors based on the recommendation of the Corporate Social Responsibility Committee (CSR Committee). The CSR Policy may be accessed on the Company's website at the link: https:// www.manappuram.com/public/uploads/editor-images/ files/CSR%20policy%282%29.pdf

The Corporate Social Responsibility initiatives taken by the Company during the financial year 2022-23, are detailed in

the Report on corporate social responsibility activities and the same is annexed to this report as Annexure - V.

20. Formal Annual Evaluation

The Board of Directors decided to appoint a third party to assist the Board in carrying out the formal evaluation of the Board pursuant to which NASDAQ Corporate solutions was appointed to assist in the evaluation process of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As part of the evaluation process questionnaire on various aspects governing the company was circulated to directors for their individual opinion through electronic mode, thereafter individual telephonic interviews with all directors were carried out as part of the evaluation process and it was ascertained that the company has maintained the highest standards of corporate governance and integrity in all its practices. The Nomination, Compensation and Corporate Governance Committee and the Board of Directors of the Company further considered the observations and have taken necessary measures to implement the suggestions.

21. Details of Remuneration/ Commission Received by Managing Director From Subsidiaries

Mr. V P Nandakumar, Managing Director & Chief Executive Officer, has not received any remuneration or commission from any of the subsidiaries of the Company during the financial year-2022-23.

22. Names of Companies which Have Become or Ceased to be its Subsidiaries, Joint Ventures or Associate Companies During the Year

No company became or ceased to be subsidiary or joint venture or associate company of M/s. Manappuram Finance Limited during the Financial Year 2022-23.

23. Audit and Auditors Report

In compliance with the Reserve Bank of India's Guidelines on appointment of Statutory Auditor (s) by Non-Banking Financial Company (“NBFC”) vide Circular RBI/ 2021-22/

25 Ref. No. DoS. CD.ARG/ SEC.01/ 08.91.001/ 2021-22 dated April 27, 2021 (“RBI Guidelines”) and pursuant to

Section 139 of the Companies Act, 2013, the Members of the Company appointed M/s. M S K A & Associates (ICAI

Firm Registration No:105047W) and M/s. S K Patodia & Associates (ICAI Firm Registration No:112723W) as the Joint Statutory Auditors of the Company at the 29^th Annual General Meeting held on September 10, 2021 to hold office from conclusion of the 29^th Annual General Meeting till the conclusion of 32^nd Annual General Meeting of the Company to conduct the audit of accounts of the Company on such remuneration plus out of pocket expenses, if any, as may be mutually agreed upon between the Board of Directors of the Company and the said Joint Statutory

Auditors. The Joint Statutory Auditors holds a valid peer

review certificate as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015. The Auditors' Report to the Members for the year under review is unmodified, i.e., it does not contain any qualification, reservation or adverse remark or disclaimer, and the notes annexed to the Standalone and Consolidated financial statements referred to in the Independent Auditors' Reports are self-explanatory and do not call for any further comments. Further, there was no fraud reported by the Statutory Auditors to the Audit Committee or Board of Directors of the Company under Section 143 the Act.

Secretarial Audit

The Board appointed M/s. KSR & Co. Practicing Company

Secretaries LLP, to conduct a Secretarial Audit for the financial year 2022-23. Secretarial audit report for the year ended on March 31, 2023 as provided by M/s. KSR & Co. Practicing Company Secretaries LLP, Indus Chambers, Ground Floor, No.101, Government Arts College Road, Coimbatore - 641018, is annexed to this Report as Annexure - VI. The report does not contain any qualifications, reservation, adverse remarks, or disclaimer. Further, no fraud has been reported by the Secretarial auditors under Section 143 (14) of Companies Act 2013.

As per Regulation 24A (1) of the SEBI (Listing Obligation

and Disclosure Requirements) 2015, the company does not have any unlisted material subsidiaries.

Information systems Audit

In terms of the Master Direction of the Information Technology Framework for the NBFC Sector, NBFCs are required to have an information system audit at least once a year. In compliance with the RBI Master Direction on the IT framework for the NBFC sector, we are doing the Information Systems Audit at least once every year. For FY 2021 - 22, a system audit was conducted by Deloitte Touche Tohmatsu India LLP. The areas audited were, inter alia, user access management, patch management, business continuity and disaster recovery, data protection, and the information security management system framework. The audit revealed no major observations.

MAFIL has engaged PricewaterhouseCoopers (PwC) to conduct an IS audit for FY 2022-23. The scope of the audit covers the effectiveness of the policies, IT systems, adequacy of internal controls, the effectiveness of BCP and DR, compliance with legal and statutory requirements, and the security testing of critical applications. IS Audit for FY 2022-23 is in progress.

24. Directors and Key Managerial Personnel

The Board of Directors of the Company is duly constituted,

and none of the directors of the Company is disqualified under the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations

and Disclosure Requirements) Regulations 2015

Mr. Blangat Narayanan Raveendra Babu (DIN: 00043622), Non-Executive Non-Independent Director, Ms. Sutapa Banerjee (DIN: 02844650), Independent Director, & Mr. Gautam Ravi Narayan (DIN: 02971674), Non-Executive Non-Independent Director had resigned from the directorship of the Company with effect from May 18, 2022, July 04, 2022 and April 04, 2023 respectively. The Board of Directors of the Company had appreciated the guidance and contribution on various matters made by Mr. Blangat Narayanan Raveendra Babu, Ms. Sutapa Banerjee, and Mr. Gautam Ravi Narayan during their tenure as Directors of the Company.

The Board of Directors of the Company based on the recommendation of the Nomination, Compensation and Corporate Governance Committee at their meeting held on September 23, 2022, has appointed Ms. Pratima Ram (DIN: 03518633) as Woman Independent Director of the company subject to the approval of Members of the company for a period beginning from September 23, 2022 to April 01, 2024 in the casual vacancy caused due to the resignation of Ms. Sutapa Banerjee (DIN: 02844650). Thereafter, on 10^th December 2022, the members of the company passed Special Resolution through Postal Ballot for appointment of Ms. Pratima Ram (DIN: 03518633) as Woman Independent Director of the company for a period beginning from September 23, 2022 to April 01, 2024.

The Board of Directors of the Company, based on the

recommendation of the Nomination, Compensation and Corporate Governance Committee at their meeting held

on September 23, 2022, has appointed Adv. Veliath Pappu Seemanthini (DIN: 07850522) as additional director (Non-Executive) of the Company, to be re-classified as an Independent Director of the Company under Section 161 of the Companies Act, 2013 ("the Act”) read with applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations”), Articles of Association of the Company and subject to the approval of Members of the company. In the said meeting the Board further decided to appoint Dr. Sumitha Nandan (DIN: 03625120) as an Additional Director (Executive) of the Company with effect from January 01, 2023 and recommended to the Members for the appointment of Dr. Sumitha Nandan as Whole-time Director of the Company for a period of five years with effect from January 01, 2023. Thereafter, on February 03, 2023 the members of the company passed Special Resolutions through Postal Ballot for the appointment of Adv. Veliath Pappu Seemanthini as a Non-Executive Independent Director of the Company to hold office for a term of five consecutive years with effect from December 23, 2022 to December 22, 2027, not subject to retirement by rotation and Dr. Sumitha Nandan as a Whole-time Director of the Company to hold office for a term of five consecutive years with effect from January 01, 2023, liable to retirement by rotation.

Mr. Sekaripuram Ramanath BaLasubramanian (DIN: 03200547), Non-Executive Non-Independent Director of the Company, will retire by rotation at the ensuing annual general meeting (the 'AGM') and, being eligible, offers himself for re-appointment. In this regard, the Board of Directors of the Company, based on the recommendation of Nomination, Compensation and Corporate Governance Committee, recommended to the Members for re-appointment of Mr. S.R BaLasubramanian (DIN: 03200547), as Non-Independent Non-Executive Director of the Company by way of ordinary resolution. Hence, the proposal wiLL form part of the notice of the 31^st AGM, and the information about the Director seeking his re-appointment as per Para 1.2.5 of the Secretarial Standards on General Meetings (i.e., SS - 2) and Regulation 36 (3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) ReguLations 2015 has been given in the notice convening the 31^st AGM.

There was no change in Key Managerial Persons of the Company during the financiaL 2022-2023 except for the re-appointment of Mr. V P Nandakumar (DIN: 00044512) in the annuaL generaL meeting of the company heLd on August 25, 2022 as Managing Director and Chief Executive Officer of the Company with effect from July 28, 2022 up to March 31, 2024, and the appointment of Dr. Sumitha Nandan (DIN: 03625120) by way of postal ballot held on February 03, 2023 as a Whole-time Director of the Company to hold office for a term of five consecutive years with effect from January 01, 2023.

25. Share Capital

The issued, subscribed, and paid-up Equity Share Capital

as on March 31, 2023 was '1,692.79 million, consisting of 846,394,729 Equity Shares of the face value of '2 each, fully paid-up. There was no change in the Share Capital during the year under review. As on March 31, 2023, none of the Directors of the Company holds instruments convertible into equity shares of the Company.

Change in Nature of Business if any

There was no change in the nature of business during the financial year 2022-23.

26. Deposits

As you are aware, your Company had stopped accepting deposits from the public since the financial year 2009-10 onwards. Your Company has converted itself into a non-deposit taking Category 'B' NBFC. During the financial

year 2022-23 the Company has not accepted deposits as per Chapter V of the Act.

The Company has no unclaimed deposit as at March 31, 2023.

27. Compliance with NBFC Regulations

Your Company has generally complied with all the regulatory provisions of the Reserve Bank of India applicable to

Non-Banking Financial Company - Systemically Important Non-Deposit taking Company. Further, constitution of

Statutory Committees is in compliance with the corporate governance provisions as specified in the master direction issued by the Reserve Bank of India.

Your Company's total Capital Adequacy Ratio (CAR), as on March 31, 2023, stood at 31.70% as compared to 31.33% as on March 31, 2022, of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory requirement of minimum 15%.

The Tier 1 ratio as on March 31, 2023, improved to 31.70% as against 31.01% as on March 31, 2022. Your Company's overall gearing (Debt/ Tangible Net-worth) as on March 31, 2023, improved to 2.14 as against 2.26 as on March 31,2022.

The Tier 2 ratio as on March 31, 2023, was Nil as against 0.32% as on March 31, 2022.

28. Compliance with Secretarial Standards of ICSI

Company has complied with Secretarial Standards-1 (SS-1) on Board meetings and Secretarial Standards-2 (SS-2) on General meetings issued by the Institute of Company Secretaries of India.

29. Qualification, Adverse Remarks Reservations by Auditors if Any

There are no Qualification, Adverse Remarks, Reservations by statutory Auditors in the Independent Auditors

Report and secretarial auditors in the Independent Auditors Report.

30. Employee Stock Option Scheme (ESOS)

To retain the best available talent, ensure long term commitment to the Company, and encourage individual ownership, the Company has instituted employee stock options plans from time to time.

Presently, the Company has the Employee Stock Option Scheme 2016 (ESOS-2016).

The disclosures in terms of 'Guidance note on accounting for employee share-based payments' issued by ICAI and diluted EPS in accordance with Indian Accounting Standard (Ind AS) 33 - Earnings Per Share are provided in Note 35 of Standalone Financial Statements in this Annual Report.

The details related to stock option schemes as required under the SEBI (Share Based Employee Benefits) Regulations read with the Securities and Exchange Board of India Circular No. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are provided in Note 36 of the Standalone Financial Statements. Further, the details are annexed to this report as Annexure - VII and also made available on the Company's website at https://www.manappuram.com/ investors/annual-reports.html

A certificate from M/s. KSR & Co. Practicing Company Secretaries LLP, Practicing Company Secretaries, confirming that ESOS 2016 has been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations and the respective resolutions passed by the Company in General Meetings would be placed in the ensuing Annual General Meeting for inspection by the Members.

31. Disclosure

Composition of the Corporate Social Responsibility

Committee and Audit Committee are detailed in the Corporate Governance Report.

32. Whistle Blower Policy and Vigil Mechanism

The Vigil Mechanism of the Company provides adequate safeguards against the victimization of any directors or employees or any other person who avail the mechanism and provides direct access through an e-mail, or dedicated telephone line or a letter to the Chairperson and a Member of the Audit Committee.

No person has been denied access to the Chairman and a Member of the audit committee. The company has ensured that its employees are aware of the content and procedure of the policy and fully protected. The Whistle Blower Policy and Vigil Mechanism may be accessed on the Company's website at the link: https://www.manappuram.com/public/uploads/ editor-images/files/whistle%20blower%20policy%20 May%202023%20%282%29.pdf

Further, there were no complaints reported during the financial year 2022-23.

33. Extract of Annual Return

I n accordance with the provisions of Section 92(3) of the Act, Annual return in Form-MGT - 7 has been uploaded in

the website of the Company at https://www.manappuram. com/investors/annual-reports.html

34. Details of Adequacy of Internal Financial Controls and Internal Audit

The Company has put in place, well defined and adequate Internal Control System, and Internal Financial Control (IFC) mechanism commensurate with size, scale, and complexity of its operations to ensure control of entire business and assets. The internal audit policy has been upgraded as Risk Based Internal Audit Policy based on the RBI Circular - RBI/2020-21/88 (Ref. No. DoS. CO. PPG. / SEC.05/11.01.005/2020-21) dated February 03, 2021 and functioning of internal audit is also realigned as per the policy. The functioning of controls is regularly monitored to ensure their efficiency in mitigating risks. A comprehensive internal audit department functions in-house to continuously audit and report gaps if any, in

the diverse business verticals and statutory compliances applicable.

During the year, Internal Financial Controls were reviewed periodically by the management and Audit Committee. Key areas were subject to various statutory and internal audits to review the adequacy and strength of IFC followed by the Company. As per the assessment, Controls are strong and there are no major concerns. The internal financial controls are adequate and operate effectively to ensure orderly and efficient conduct of business operations.

Your Company has an independent internal audit function

which carries out regular internal audits to test the design, operations, adequacy, and effectiveness of its internal control processes and to suggest improvements to the management. The Board of Directors of your Company also appointed M/s. Deloitte, to provide co-sourced internal audit services to assist the Management of the Company in the appraisal of its internal control functions, recommend improvements in processes and procedures and surface significant observations and recommendations for process improvements. Their observations along with management response are periodically reviewed by the Audit Committee and the Board and necessary actions are taken.

35. Listing with Stock Exchanges

Your Company confirms that it has paid the Annual Listing Fees for the financial year 2022-23 to BSE Limited and National Stock Exchange of India Limited where the Company's securities are listed.

36. Sexual Harassment of Women at Workplace

During the year under review, there were seven (7) complaints filed with the Internal Complaints Committee of the Company, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same were investigated and resolved. No complaints were pending for more than 90 days during FY 2022-23.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

37. Consolidated Financial Statements

In accordance with the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Indian Accounting Standard (Ind AS) 27 on Consolidated Financial

Statements, the audited consolidated financial statement is provided in the Annual Report.

40. Particulars of Employees and Related Disclosure

The particulars of employees and related disclosures are annexed herewith as Annexure - VIII as per Section 197 of the Act.

41. Certificate on Corporate Governance

Certificate provided by KSR & Co., Practicing Company Secretaries LLP, Indus Chambers, Ground Floor, No. 101, Govt. Arts College Road, Coimbatore - 641018 towards compliance of the provisions of Corporate Governance, forms an integral part of this Report and is given as Annexure - IX

42. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the company's operations in future.

There are no significant and material orders passed by the regulators or courts or tribunals during the year under review that would impact the going concern status of the Company and its future operations.

43. Material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year to which the financial statement relates and the date of the report.

There were no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year of the Company and the date of the Directors' report.

44. Maintenance of Cost Records

The provision of Section 148 of the Act relating to maintenance of cost records and cost audits is not applicable to the Company.

45. Acknowledgement

Your directors express sincere appreciation and gratitude to the employees of the Company at all levels for their dedicated service and commitments, to the Reserve Bank of India, Rating Agencies, Stock Exchanges, Debenture Trustees, RTA's, Depositories, Central and State Governments and its statutory bodies for the support, guidance, and co-operation. Your directors wish to thank the Customers, Investors, Shareholders, Debenture holders, Bankers, Auditors, Scrutinizer and other financial institutions and other stakeholders for the wholehearted support and confidence reposed on the Company.

For and on behalf of the Board of Directors

Sd/-

Place: Valapad Shailesh. J. Mehta

Date: May 12, 2023 DIN: 01633893