Your Company’s total income increased by 28% from
' 10,198.20 million for the year ended March 31, 2024 to
' 13,061.09 million for the year ended March 31, 2025. The
Profit after tax has increased by 46% from ' 2,370.21 million
for the year ended March 31, 2024 to ' 3,451.68 million for
the year ended March 31, 2025.

Material changes from the end of the
financial year till the date of this report

No material changes and commitments have occurred after
the closure of the FY 2025 till the date of this Report, which
would affect the financial position of your Company.

Transfer to Reserves

The Company transferred an amount of ' 690.34 million to
the Reserve Fund under section 45-IC of the RBI Act, 1934.

Pursuant to provisions of Companies Act, 2013 (“the Act”)
read with relevant rules thereunder, the Company, being
a NBFC, is exempt from creating debenture redemption
reserve in respect of privately placed debentures including
the requirement to invest up to 15% of the amount of
debentures maturing during the next financial year. However,
the Company maintains sufficient liquidity buffer to fulfill its
obligations arising out of debentures.

Dividend

The Directors do not recommend payment of any dividend
on the Equity Shares for the financial year ended March 31,
2025, to conserve capital for future business expansion.

As stipulated in Regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (“SEBI
Listing Regulations”) the Dividend Distribution Policy can
be accessed on the Company’s website at the web link:
https://www.sbfc.com/faq.

Operations

During the financial year, the Company continued to
strengthen its presence by expanding to 205 branches across
16 states and 2 union territories in the underserved credit
markets of India by focusing on Secured MSME and Gold
Loan products, primarily targeting customers in tier II and
tier III cities. The Company’s approach remained centered
on promoting financial inclusion by offering accessible,
collateral-backed credit solutions tailored to the needs of
micro and small enterprises, as well as individual borrowers
seeking short-term liquidity.

Assets Under Management (“AUM”) has grown by 28 %
during the year under review from ' 68,219 million as at
March 31, 2024 to ' 87,474 million as at March 31, 2025.
During the year under review, your Company has disbursed
Secured MSME loans of ' 26,707 million against ' 27,933
million during the previous year.

Material Developments

During the year under review, Insurance Regulatory and
Development Authority of India has issued a Certificate of
Registration dated November 25, 2024 to your Company to
act as ‘Corporate Agent (Composite)’ under the Insurance
Act, 1938. Your Company will provide options to its customers

in the areas of life insurance, health insurance and general
insurance under group (Corporate Agent-Composite) in the
geographies that the Company operates in.

Change in Nature of Business

There has been no change in the nature of business and
operations of the Company during the year under review.

RBI Compliances

The Company continues to comply with the Master Direction

- Reserve Bank of India (Non-Banking Financial Company

- Scale Based Regulation) Directions, 2023 and all the
applicable laws, regulations, guidelines, etc. as prescribed
by RBI from time to time.

Capital Adequacy

As on March 31, 2025, the Capital to Risk Assets Ratio
(“CRAR”) of your Company was 36.10% (Tier I- 36.10%)
which is well above the minimum requirement of 15% as
prescribed by RBI.

Share Capital

The issued, subscribed and paid-up Equity Share
Capital of the Company as on March 31, 2025 stood
at ' 10,859,990,880/-. During the Financial Year under
review, the paid-up Equity Share Capital of the Company
has increased on account of issuance and allotment of
12,244,102 Equity Shares of ' 10/- each pursuant to the
exercise of stock options by the eligible employees under
Employee Stock Option Schemes of the Company.

No Equity Shares were issued with differential rights as to
dividend, voting or otherwise during the year under review.
None of the Directors of the Company holds instruments
convertible into Equity Shares of the Company.

Equity

Your Company has total equity of ' 31,901.31 million and
Goodwill of ' 2,603.92 million as on March 31, 2025. Net of
Goodwill, your Company has Tangible Equity of ' 29,297.39
million.

Employee Stock Options

Your Company has in force various Employees Stock Option
Schemes viz. SBFC Stock Option Policy I 2018, SBFC Stock
Option Policy 2021 -I, SBFC Stock Option Policy 2021 -II,
SBFC Stock Option Policy 2021 -III -Special Grant, SBFC
Stock Option Policy 2021 -IV, SBFC Stock Option Policy
2021 -V, SBFC Stock Option Policy 2023 -I, SBFC Stock
Option Policy 2023 -II, SBFC Stock Option Policy 2023 -III,
SBFC Stock Option Policy 2024 -I.

With a view to attract, retain and motivate talent, align
employee interests with long-term growth, and foster a sense
of ownership to drive a sustained Company success, your
Company with the approval of members at Annual General
Meeting (“AGM”) held on June 28, 2024, has formulated a
SBFC Stock Option Policy 2024 - I, contemplating grant of
5,000,000 equity shares, constituting 0.46% of the paid-up
share capital of the Company as on March 31, 2025.

Further, the Nomination and Remuneration Committee at its
Meeting held on April 24, 2025 and the Board of Directors
at its Meeting held on April 26, 2025 had considered and
approved the amendments to SBFC Stock Option Policy I
2018 (‘ESOP 2018-I Policy’) and SBFC Stock Option Policy
2021 I (‘ESOP 2021-I Policy’). The special resolution for
seeking approval of the members of the Company is set out
in the Notice of the ensuing 18th Annual General Meeting.
The proposal to amend these policies is with reference to
Definition of Eligible Employee, Exercise Period, Relevant
Date, SBFC Trust Deed, Vesting Period, Vesting Schedule
and Exercise Price details.

The proposed amendments to the ESOP 2018-I Policy and
ESOP 2021-I Policy would be applicable to the Employee
Stock Options not yet granted and hence any variation in
the ESOP 2018-I Policy and ESOP 2021-I Policy will not be
considered as prejudicial to the interest of the employees.

In terms of Regulation 14 of the Securities and Exchange
Board of India (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021, (SBEB Regulations) the
disclosures with respect to the ESOP Schemes have been
provided on the website of the Company at https://www.sbfc.
com/investors.

The certificate(s) from secretarial auditor M/s Parikh &
Associates, Company Secretaries confirming implementation
of the ESOP Schemes in accordance with the SBEB
Regulations and shareholders resolutions would be made
available for inspection of the shareholders at the ensuing
Annual General Meeting.

Utilisation of funds raised through
Initial Public Offering (IPO)

During FY 2024, your Company made an Initial Public Offer
(“IPO” or “Issue”) comprising a fresh issue of 105,301,883
Equity Shares aggregating to ' 6,000 million and an offer
for sale of 74,561,402 Equity Shares aggregating to ' 4,250
million and pursuant to the IPO, the shares of the Company
were listed on The National Stock Exchange of India Limited
(NSE) and BSE Limited (BSE) on August 16, 2023.

Pursuant to the provisions of regulation 32(6) of the SEBI
Listing Regulations, the Company has fully utilised the
funds raised through IPO for the objects stated in the offer
document. The reports from ICRA Limited, monitoring agency
appointed for IPO has been filed with the stock exchanges
and is also available on the Company’s website.

Internal Capital Adequacy Assessment
Policy (‘ICAAP’)

Pursuant to Master Direction - Reserve Bank of India (Non¬
Banking Financial Company - Scale Based Regulation)
Directions, 2023 (SBR), NBFCs are required to have an
ICAAP in place. The objective of ICAAP is to ensure availability
of adequate capital to support all risks in business and also
to encourage NBFCs to develop and use better internal risk
management techniques for monitoring and managing their
risks. Accordingly, your Company has framed an ICAAP
policy. This policy is developed considering the requirements

of the SBR and is based on the Pillar-2 requirements under
Basel III Framework developed by the Basel Committee on
Banking Supervision (BCBS). The objective of the policy is
to provide an ongoing assessment of the Company’s entire
spectrum of risks and the methodology to assess current and
future capital, reckoning other mitigating factors and also
to assist and apprise the Board on these aspects and on
Company’s internal capital adequacy assessment process
and Company’s approach to capital management.

Information Technology Governance
and Cyber Security

In alignment with the Reserve Bank of India’s Master Direction
on Information Technology Governance, Risk, Controls
and Assurance Practices, the Company has established a
robust IT governance structure. An IT Strategy Committee
chaired by an Independent Director and comprising of
Independent, Executive and Nominee Directors, the Chief
Technology Officer (CTO) and other member of Senior
Management provides strategic oversight on technology
initiatives and the overall cybersecurity posture. Your
Company has implemented a comprehensive suite of IT and
security policies, including those for Information Security,
Cybersecurity, Business Continuity, IT Outsourcing, Cyber
Crisis Management and Incident Response, ensuring a
structured and risk-based approach to regulatory compliance
and operational resilience.

Cybersecurity remained a key focus area during the year.
The Company successfully retained its ISO 27001:2022
certification, reaffirming its commitment to global standards
in information security management. Regular Business
Continuity and Disaster Recovery (BC/DR) drills were
conducted to validate system robustness and response
readiness. Advanced threat detection capabilities were
enhanced through the deployment of Xtended Detection and
Response (XDR) tools, with infrastructure and application
logs integrated into a centralized Security Operations Centre
(SOC). The SOC operates on a 24x7 basis, enabling real¬
time threat analysis and risk-based incident response.

To further strengthen the security framework, the Company
integrated all endpoints into a unified Active Directory (AD)
environment, significantly improving access governance and
endpoint control. Key cybersecurity controls including Data
Loss Prevention (DLP), email security, and vulnerability
management were rigorously assessed, with identified risks
promptly mitigated as part of a continuous improvement plan.
Periodic Vulnerability Assessment and Penetration Testing
(VAPT) exercises were conducted on critical systems and
core business applications to ensure ongoing resilience.
Furthermore, cybersecurity and privacy awareness across
the organization was carried out through structured
employee training programs, phishing simulations, and
the dissemination of best practice guidelines, reinforcing a
culture of cyber vigilance and shared responsibility.

Mobilisation of funds

Your Company has diversified borrowing profile comprising
of availing Term loans/Cash Credit facilities from Banks and
financial institutions, issue of Non-Convertible Debentures,
External Commercial Borrowings through loans. Your
Company continues to further expand/diversify its borrowing
profile by tapping new lenders.

Mobilisation of funds as on March 31, 2025 are as under:

As specified in the respective offer documents, the funds
raised from issuance of NCDs were utilised for on lending
to secured micro, small and medium enterprises and gold
loans. 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. During the year,
your Company has redeemed NCDs worth ' 930 million.

There has been no default in making payments of principal
and interest on all the NCDs issued by the Company on a
private placement basis. Further, there was no deviation/
variation in the use of proceeds raised, from the objects
stated in the offer document.

Credit Rating

During FY 2025, the credit rating of your Company was
upgraded & affirmed by ratings agencies. It reaffirms the high
reputation and trust the Company has earned for its sound
financial management and its ability to meet all its financial
obligations.

The brief details of the ratings received from the credit rating
agencies by the Company for its outstanding instruments are
given in ‘Annexure -II'.

Management Discussion and Analysis Report

The information on the affairs of the Company is provided
in the Management Discussion and Analysis Report in
accordance with the SEBI Listing Regulations and Master
Direction issued by the Reserve Bank of India. This report
is presented as a separate section, forming part of the
Annual Report.

Corporate Governance

Your Company is committed to maintaining the highest
governance standards and has also implemented several
best governance practices. Pursuant to Regulation 34(3) read
together with Schedule V of the SEBI Listing Regulations, the
Company has prepared Corporate Governance Report which
forms part of this Report, marked as ‘Annexure - VI'. As per
Para C and E of Schedule V of the SEBI Listing Regulations,
the Company has obtained two certificates from M/s Parikh
& Associates, Company Secretaries (a) Certificate on Non¬
Disqualification of Directors; and (b) Certificate on the
compliance of the conditions of the Corporate Governance.
These certificates forms part of this Report, marked as
‘Annexure - IX' and ‘Annexure - VII' respectively.

The Managing Director and the Chief Financial Officer have
given their certificate as required under Regulation 17(8) read
with Part B of Schedule II of the SEBI Listing Regulations
regarding the Annual Financial Statements of the Company
for the year ended on March 31, 2025, which forms part of
this Report, marked as ‘Annexure - X'.

Compliance Management

The Company has adopted a compliance management tool
viz. Compliance Insights which comprehensively covers all
compliances under various regulatory frameworks applicable
to the Company and provides system-driven alerts to the
respective owners.

Business Responsibility and
Sustainability Report

In compliance with Regulation 34(2)(f) of the SEBI Listing
Regulations, as applicable, your Company’s Business
Responsibility and Sustainability Report for the year ended
March 31, 2025, forms part of this Annual Report annexed as
‘Annexure - XII'.

Details of subsidiary/ joint ventures/
associate companies

During FY 2025, SBFC Home Finance Private Limited (‘SBFC
Home Finance’), the Company’s wholly-owned subsidiary
had made an application to Reserve Bank of India (RBI)
for obtaining a Certificate of Registration for operating as
a ‘Housing Finance Company’. RBI had not considered the
said application, as SBFC Home Finance is a subsidiary of
a registered NBFC-ICC, leading to layering of NBFCs. Since
the intended objective behind the incorporation of SBFC
Home Finance was not achieved, SBFC Home Finance,
decided to pursue the process of Voluntary Liquidation. The
shareholders of SBFC Home Finance at their meeting held
on January 27, 2025 had approved the voluntary liquidation
process. The liquidator has completed the process of
realization of assets and liabilities of SBFC Home Finance.
Consequently, the net proceeds of the realization have been
distributed to your Company on March 27, 2025.

The subsidiary had not commenced any business or
conducted any operations since the date of its incorporation.
Further, SBFC Home Finance is not a material subsidiary of
the Company.

In terms of the provisions of Section 129(3) of the Act, the
Consolidated Financial Statements of the Company and its
subsidiary, SBFC Home Finance, are prepared and form part
of this Annual Report.

During the FY 2025, there was no other entity which became
or ceased to be joint venture or associate of the Company.

A statement containing salient features of the financial
statement of subsidiaries or associate companies or joint
ventures is provided in Form AOC - 1, which is attached
hereto as ‘Annexure - IV'.

Loans and Advances

During the year under review, your Company has not given
any loans and advances to its subsidiaries or to firms/
companies in which Directors are interested.

Particulars of Loans, Guarantees or Investments

Your Company, being an NBFC registered with RBI and
engaged in the business of giving loans in ordinary course of
its business, is exempt from complying with the provisions of
Section 186 of the Act with respect to loans.

Pursuant to the provisions of Section 186(4) of the Act,
details with regard to the investments made by the Company,
as applicable, are given in Notes to the Standalone financial
statements, forming part of this Annual Report.

Deposits

Your Company being a non-deposit taking Non-Banking
Financial Company has not accepted or renewed any
amount falling within the purview of provisions of Section 73
of the Act read with the Companies (Acceptance of Deposit)
Rules, 2014 during the financial year under review. Hence,
the requirement for furnishing the details relating to deposits
covered under Chapter V of the Act or the details of deposits
that are not in compliance with Chapter V of the Act is not
applicable.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility (CSR) Committee
comprises of three members viz., Ms. Surekha Marandi,
Chairperson, Mr. John Mescall and Mr. Ravi Venkatraman,
members. The CSR interventions for the year focused on
child education and preventive health care. The CSR Policy,
approved by the Board, outlines SBFC's commitment to
integrate CSR as a core business process for the sustainable
development of society.

The CSR Policy has been hosted on the website of the
Company at: https://www.sbfc.com/faq.

As per the provisions of Section 135 of the Act read with
the Companies (Corporate Social Responsibility Policy)
Rules, 2014 (“CSR Rules”), the mandatory CSR spend of
the Company for FY 2025 was ' 43.78 million, against which

your Company has spent ' 44.91 million during the year.
Further, in terms of the CSR Rules, Chief Financial Officer
has certified that the funds disbursed have been utilised for
the purpose and in the manner approved by the Board for
FY 2025.

The Annual Report on the CSR activities undertaken by your
Company during the year under review, as prescribed in the
Companies (Corporate Social Responsibility Policy) Rules,
2014, as amended, is set out in 'Annexure - I' of this Report.

Annual Return

In accordance with the requirements under Section 92(3)
and Section 134(3)(a) of the Act and the applicable rules,
the annual return in Form No. MGT-7 as on March 31, 2025
is available on the website of the Company www.sbfc.com.

Board & Its Committees

Board

The Company has an optimum combination of executive,
non-executive and independent directors, including an
independent woman director. As on March 31, 2025, the
Board is comprised of a Non-Executive Chairman, 2 (two)
Executive Directors, 2 (two) Non-Executive Non-Independent
Directors and 5 (five) Independent Directors including 1 (one)
Women Director.

Committee(s) of Board

Pursuant to various requirements under the Act and the SEBI
Listing Regulations, and the requirements under applicable
RBI Regulations, the Board of Directors has constituted/
reconstituted various committees such as Audit Committee,
Nomination and Remuneration Committee, Stakeholders’
Relationship Committee, Corporate Social Responsibility
Committee, Risk Management Committee, IT Strategy
Committee. The details of composition, terms of reference,
number of meetings held during the year, attendance there
at and other details pertaining to these committees are
mentioned in the Corporate Governance Report.

All recommendations made by the Audit Committee during
the year were approved and accepted by the Board of
Directors of the Company.

As on March 31, 2025, the Audit Committee comprised
of the 4 (four) Directors, namely, Mr. Ravi Venkatraman
(Chairperson), Ms. Surekha Marandi (Independent Director),
Mr. Neeraj Swaroop (Independent Director) and Mr. John
Mescall (Non-Executive Non-Independent Director).

Meetings and Postal Ballot

The Board of Directors met 5 (five) times during the year
under review i.e., on April 27, 2024, July 27, 2024, October
26, 2024, January 25, 2025 and February 28, 2025, as
against the statutory requirement of at least four meetings.
The requisite quorum was present at all the Board Meetings.
The maximum time gap between any two meetings was not
more than one hundred and twenty days.

During the year under review, no Extraordinary General
Meeting of the Members was held. The Members have
passed the following items by way of special resolution
through postal ballot:

^ On May 19, 2024 approved the appointment of Mr.
Ravi Venkatraman (DIN: 00307328) as an Independent
Director of the Company for a term of five consecutive
years commencing from February 21, 2024 to February
20, 2029 and Mr. Koni Uttam Nayak (DIN: 02543830)
as an Independent Director of the Company for a term
of five consecutive years commencing from March 26,
2024 to March 25, 2029 and;

^ On April 7, 2025, approved the appointment of Mr.
Mahesh Dayani as a Whole-time director designated as
‘Executive Director’ of the Company.

Detailed information on the Meetings of the Board, its
Committees, Postal Ballot and the AGM is included in the
Report on Corporate Governance, which forms part of this
Annual Report.

Meetings of Independent Directors

The Independent Directors met during the year under review,
on March 15, 2025. The Meeting was conducted without
presence of the Whole-time Director(s), the Non-Executive
Non-Independent Directors, Chief Financial Officer or any
other Management Personnel to enable the Independent
Directors to discuss matters pertaining to, inter-alia, review
of performance of Non-Independent Directors and the Board
as a whole, review the performance of the Chairman of the
Company, assess the quality, quantity and timeliness of
flow of information between the Company Management &
the Board and its Committees and free flow discussion on
any matter that is necessary for the Board to effectively and
reasonably perform their duties.

Directors and Key Managerial Personnel

Appointment of Directors

Based on the recommendation of the Nomination and
Remuneration Committee and the Board of Directors, the
Members of the Company by means of a Special Resolution
passed through Postal Ballot on May 19, 2024 approved
the appointment of Mr. Ravi Venkatraman (DIN: 00307328)
as an Independent Director of the Company for a term of
five consecutive years commencing from February 21,
2024 to February 20, 2029 and Mr. Koni Uttam Nayak (DIN:
02543830) as an Independent Director of the Company for a
term of five consecutive years commencing from March 26,
2024 to March 25, 2029.

The Board of Directors based on the recommendation of
the Nomination and Remuneration Committee and in terms
of Section 161 of the Act at its meeting held on February
28, 2025 appointed Mr. Mahesh Dayani (DIN: 06561389)
as an Additional and Whole-time Director, designated as
‘Executive Director’, for a term of 5 (five) consecutive years
commencing from February 28, 2025 to February 27, 2030,
subject to approval of Members of the Company. On April
7, 2025, the Members of the Company passed the Special
Resolution through Postal Ballot for the appointment of

Mr. Mahesh Dayani as Whole-time Director designated as
‘Executive Director’ of the Company.

Based on the recommendation of the Nomination and
Remuneration Committee, the Board of Directors at their
meeting held on April 26, 2025, appointed Mr. Leroy James
Langeveld (DIN: 11068486) as an Additional and Nominee
Director (Non- Executive), liable to retire by rotation effective
from April 26, 2025. The approval of the members at the
ensuing 18th Annual General Meeting will be sought for
appointment of Mr. Leroy James Langeveld as Nominee
Director of the Company.

Re-appointment of director retiring by rotation

In accordance with the applicable provisions of Section 152 of
the Act, Mr. John Mescall (DIN: 08385575), Nominee Director
of the Company, retires by rotation at the forthcoming Annual
General Meeting (AGM) of the Company. Being eligible, Mr.
John Mescall have offered himself for re-appointment as
Director. Brief particulars of Mr. John Mescall as required
under the Secretarial Standard on General Meetings issued
by ICSI have been provided in the notice of the 18th AGM of
the Company.

Fit and Proper and Non-Disqualification
Declaration by Directors

All the Directors of the Company have confirmed that they
satisfy the ‘fit and proper’ criteria as prescribed under Master
Direction - Reserve Bank of India (Non-Banking Financial
Company - Scale Based Regulation) Directions, 2023,
and that they are not disqualified from being appointed/re-
appointed/continuing as Director in terms of Section 164(1)
and (2) of the Act. None of the Directors of the Company are
disqualified and/or debarred as per the applicable provisions
of the Act and the Securities and Exchange Board of India
(SEBI).

Declaration by Independent Directors of the Company

The Company has received declarations under section 149
of the Act and Regulation 16 of the SEBI Listing Regulations
from Mr. Neeraj Swaroop, Mr. Ravi Venkatraman,
Ms. Surekha Marandi, Mr. Rajesh Mannalal Agrawal and
Mr. Koni Uttam Nayak, Independent Directors and
a confirmation that there has been no change in the
circumstances which may affect their status as Independent
Director during the year. Further, the Board after taking these
declarations/ disclosures on record and acknowledging
the veracity of the same, concluded that the Independent
Directors hold highest standards of integrity and possess the
relevant proficiency, expertise and experience to qualify and
continue as Independent Directors of the Company and are
Independent of the Management of the Company.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act read
with the rules made there under, Mr. Aseem Dhru, Managing
Director & CEO, Mr. Mahesh Dayani, Executive Director, Mr.
Narayan Barasia, Chief Financial Officer and Ms. Namrata
Sajnani, Company Secretary & Chief Compliance Officer are
the whole-time key managerial personnel of the Company as
on March 31, 2025.

Changes in Key Managerial Personnel

^ Mr. Jay Mistry, ceased to be the Company Secretary and
Chief Compliance Officer of the Company with effect
from close of business hours on August 7, 2024. The
Board noted the same and placed on record its sincere
appreciation for the valuable contribution made by Mr.
Jay Mistry during his tenure as the Company Secretary
and Chief Compliance Officer of the Company.

^ Based on the recommendation of the Nomination and
Remuneration Committee, the Board of Directors of the
Company at its Meeting held on July 27, 2024 appointed
Ms. Namrata Sajnani as the Company Secretary and
Chief Compliance Officer of the Company with effect
from August 8, 2024.

^ The Board of Directors of the Company at its Meeting
held on February 28, 2025, basis the recommendation of
the Nomination and Remuneration Committee appointed
Mr. Mahesh Dayani as an Additional and Whole-time
Director, designated as ‘Executive Director’, subject
to approval of Members of the Company. On April 7,
2025, the Members of the Company passed the Special
Resolution through Postal Ballot for the appointment of
Mr. Mahesh Dayani as Whole-time Director designated
as ‘Executive Director’ of the Company.

Policies on Directors’ Appointment
and Remuneration

In accordance with the provisions of Section 134(3)(e) of the
Act read with Section 178 of the Act and Regulation 17 of
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”), your
Company has adopted a Nomination and Remuneration
Policy which, inter-alia, includes the criteria for determining
qualifications, positive attributes and independence of
Directors, identification of persons who are qualified to
become Directors and who may be appointed in the Senior
Management team and also adopted Policy on Succession
Planning for the Board and Senior Management which inter
alia, includes succession planning for Board and Senior
Management.

Further, RBI has vide its circular dated April 29, 2022 issued
Guidelines on Compensation of Key Managerial Personnel
and Senior Management in NBFCs pursuant to RBI Scale
Based Regulations. Accordingly, the Company has adopted
a Board approved policy exclusively governing compensation
payable to Directors, Key Managerial Personnel (KMP) and
Senior Management Personnel (SMP).

In view of detailed RBI Guidelines for NBFCs concerning
compensation of KMP and SMP, the Company has in place
a specific policy to this effect. Accordingly, this remuneration
policy has to be read along with the specific policy adopted
pursuant to RBI Guidelines as regards compensation of KMP
and SMP.

The Nomination and Remuneration Policy and Policy on
Succession Planning for the Board and Senior Management
is available on the website of the Company and can be
accessed at https://www.sbfc.com/faq.

Performance evaluation at Board

The Act and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“SEBI Listing
Regulations”) stipulate the evaluation of the performance
of the Board, its Committees, Individual Directors and the
Chairperson. Your Company has formulated a process for
performance evaluation of the Independent Directors, the
Board, its Committees and other individual Directors which
includes criteria for performance evaluation of the Non¬
Executive Directors and Executive Directors.

An annual performance evaluation exercise was carried out
on the basis of a structured questionnaire on performance
criteria. The observations made during the evaluation process
were noted and based on the outcome of the evaluation and
feedback of the Directors, the Board and the management
agreed on various action points to be implemented in
subsequent meetings. The evaluation process endorsed
cohesiveness amongst directors, the openness of the
management in sharing the information with the Board and
placing various proposals for the Board’s consideration and
approval. Overall, the Board expressed its satisfaction on
the performance evaluation process as well as performance
evaluation of all Directors, Committees and Board as a whole.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for
orientation of all Directors including the Independent Directors
so as to familiarise them with the Company- its operations,
business, industry, environment in which it functions, Indian
and global macro-economic front and the regulatory regime
applicable to it. The Management updates the Board
Members on a continuing basis of any significant changes
therein and provides them an insight to their expected roles
and responsibilities so as to be in a position to take well-
informed and timely decisions and contribute significantly to
the Company.

The Independent Directors of your Company are made
aware of their roles and responsibilities at the time of
their appointment through a formal letter of appointment,
which also stipulates various terms and conditions of their
engagement. The terms of reference of all the Committees
with updations, if any, is shared with all the Board Members
on quarterly basis.

Pursuant to the provisions of the Act and Regulation 25(7) of
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”), your
Company has during the year conducted familiarization
programmes through briefings at Board/ Committee meetings
for all its Directors including Independent Directors. Details
of familiarization programmes imparted to the Independent
Directors during the financial year under review in accordance
with the requirements of the SEBI Listing Regulations are
available on the Company’s website and can be accessed
at the weblink: https://www.sbfc.com/investors and is also
provided in the Corporate Governance Report forming part
of this Annual Report.

Directors’ Responsibility Statement

Pursuant to Section 134 of the Act, the Directors of the
Company do hereby confirm that:

a. in the preparation of the annual accounts for financial
year ended March 31, 2025, the applicable accounting
standards were followed, and that there are no material
departures thereof;

b. such accounting policies had been selected and applied
consistently and made judgments and estimates that
are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at March
31, 2025 and of the profits of the Company for the FY
2025;

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

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

e. internal financial controls to be followed by the Company
was laid down, and such internal financial controls are
adequate and were operating effectively, and

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

Internal Financial Controls

Your Company has in place, adequate and effective internal
financial controls with reference to financial statements,
commensurate with the size, scale and complexity of its
operations.

Internal Audit Framework

The Internal Audit function at SBFC plays a critical role
in providing assurance to the Audit Committee, Board of
Directors and Senior Management regarding the quality
and effectiveness of the Company’s internal controls, risk
management practices, and governance frameworks. In
accordance with the Reserve Bank of India’s guidelines on
Risk-Based Internal Audit (RBIA), SBFC has adopted and
implemented a Risk-Based Internal Audit Policy.

At the start of each financial year, a comprehensive audit plan
is developed and approved by the Audit Committee. Internal
audit reports, prepared in alignment with this approved plan,
are reviewed by the Committee on a quarterly basis. These
reports include key audit findings along with recommended
corrective and preventive actions. Based on the insights from
these audits, the Committee assesses the adequacy and
effectiveness of internal control systems.

Additionally, the Audit Committee holds independent
discussions with the internal auditor, in the absence of
management, to ensure objectivity and transparency in the
audit process.

Statutory Auditor’s certification on
Internal Financial Controls

The Statutory Auditors of your Company viz. M M Nissim &
Co. LLP, Chartered Accountants have examined the internal
financial controls of the Company and have submitted
an unmodified opinion on the adequacy and operating
effectiveness of the internal financial controls over financial
reporting as at March 31, 2025.

Risk Management

Risk Management forms an integral part of the Company’s
business. Your Company has a comprehensive Enterprise
Risk Management (ERM) framework, which is applied in
strategy setting and across the enterprise, designed to
identify potential events that may affect the entity, manage
risk within its risk appetite, to provide reasonable assurance
regarding the achievement of Company’s objectives.
The objective of ERM is to lay down the broad principles,
guidelines and procedures governing the framework for
risk identification, assessment, measurement and reporting
process of the business risks. The policy aims to ensure that
all material risks can be identified and managed in a timely
and structured manner.

In compliance with Scale Based Regulations, the Board of
Directors have basis recommendation of Risk Management
Committee adopted ICAAP Policy and Framework with
the objective of ensuring availability of adequate capital to
support all risks in business as also 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
apprises the Risk Management Committee and the Board on
the risk assessment, process of identifying and evaluating
risks, major risks as well as the movement within the risk
grades, the root cause of risks and their impact, key risk
indicators, risk management measures and the steps being
taken to mitigate these risks.

Auditors and Audit Reports

Statutory Auditors and their Reports

The Members of the Company at the 15th Annual General
Meeting had approved the appointment of M/s Suresh
Surana & Associates LLP, Chartered Accountants, Mumbai
(Firm Registration No. 121750W/W- 100010) as the Statutory
Auditor of the Company till the 17th Annual General Meeting
for a term of 2 consecutive years. Accordingly, their tenure
as the Statutory Auditor concluded at the 17th AGM of the
Company held on June 28, 2024.

Consequent to the above and in terms of the provisions of
Section 139 of the Act and Guidelines for Appointment of
Statutory Auditors issued by the Reserve Bank of India and
basis the recommendation of the Audit Committee and the
Board of Directors of the Company, the Members have at
17th AGM held on June 28, 2024 approved the appointment

of M/s. M M Nissim & Co. LLP, Chartered Accountants, (Firm
Registration No. 107122W/W100672), as the Statutory
Auditors of the Company from the conclusion of the 17th
Annual General Meeting till the conclusion of the 20th Annual
General Meeting of the Company to be held in the year 2027.

In compliance with the Reserve Bank of India Guidelines
dated April 27, 2021 (“RBI Guidelines”), your Company has
in place a Policy for appointment of Statutory Auditors of the
Company.

The Statutory Auditors have issued unmodified Audit Reports
on the Standalone and Consolidated Financial Statements
for the financial year ended March 31, 2025. The Report
does not contain any qualification, reservation or adverse
remark or disclaimer. The Statutory Auditors have given a
confirmation to the effect that they have not been disqualified
in any manner from continuing as the Statutory Auditors.

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

Secretarial Auditor and Audit Report

Pursuant to the provisions of section 204 of the Act and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s.
Parikh & Associates, Practicing Company Secretaries to
undertake the Secretarial Audit of the Company for FY 2025.

The Company has annexed to this Board’s Report as
‘Annexure - VIII’, a Secretarial Audit Report for the FY 2025
given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.

Annual Secretarial Compliance Report
with additional confirmations on compliances

In compliance with Regulation 24A of SEBI Listing
Regulations, your Company has undertaken an audit for FY
2025 for all the applicable compliances as per SEBI Listing
Regulations and circulars/guidelines issued thereunder. The
Annual Secretarial Compliance Report has been issued by
M/s. Parikh & Associates, Practicing Company Secretaries,
Secretarial Auditor for FY 2025.

Appointment of Secretarial Auditor of the Company

In compliance with the SEBI Circular No. SEBI/HO/CFD/
CFD-PoD-2/CIR/P/2024/185 dated December 31, 2024
and in accordance with the provisions of Section 204 of
the Act read with the Rules framed thereunder and basis
the recommendation of Board of Directors, the approval
of Members of the Company is sought for appointment of
M/s. Parikh & Associates, Practicing Company Secretaries
as the Secretarial Auditor of the Company for conducting
the Secretarial Audit of the Company for a period of five (5)

consecutive years. The Secretarial Auditor have given a
confirmation to the effect that they are eligible to be appointed
and not disqualified from continuing as the Secretarial
Auditor. Necessary resolution(s) seeking Members approval
for appointment of M/s. Parikh & Associates, Practising
Company Secretaries as Secretarial Auditor of the Company
forms part of the Notice convening the 18th AGM.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit
as prescribed under the provisions of Section 148 of the Act
are not applicable in respect of the business activities carried
out by your Company and hence such accounts and records
were not required to be maintained by the Company.

Particulars of Contracts or Arrangements
with Related Parties

All the related party transaction(s) that were entered into
during the financial year were on arm’s length basis and
in ordinary course of business. Pursuant to the provisions
of Section 134(3)(h) read with Rule 8(2) of the Companies
(Accounts) Rules, 2014, particulars of the contracts or
arrangements with related parties referred to in section
188(1) in Form AOC-2 is annexed as ‘Annexure - III'.

In accordance with the applicable provisions of the Master
Direction issued by the Reserve Bank of India and the SEBI
Listing Regulations, the ‘Policy on Materiality of Related
Party Transactions and Dealing with Related Party
Transactions’, as updated is available on the Company’s
website: https://www.sbfc.com/faq.

Human Resources Management &

Health, Safety and Environment

At your Company, we prioritise the personal growth and job
satisfaction of our employees, recognising them as crucial
to our business’s success and expansion. We conduct
various training and awareness programs to enhance
professional skills, keeping our workforce informed about
our core values, behaviors and Company policies. Open
communication channels, coupled with regular updates
across all departments, facilitate the exchange of information
and enhance approachability and add to the transparent
work culture. We adhere strictly to health, safety, and
environmental standards, ensuring a responsible approach
to our operations. Through our initiatives, we aim to cultivate
fresh talent and nurture a pool of skilled manpower. All
employees are well-versed with our Insider Trading Code.

Particulars of Employees and
Related Disclosures

Details required under the provisions of section 197(12) of
the Act read with rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014,
as amended, containing, among other things, the ratio
of remuneration of Director to the median remuneration
of employees, the percentage increase in the median
remuneration, are annexed to this Report. This disclosure
forms part of this Report, and is marked as ‘Annexure - V'.

Details of top ten employees in terms of the remuneration
and employees in receipt of remuneration as prescribed
under rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, as

amended, containing details prescribed under rule 5(3) of the
said rules, which form part of the Directors’ Report, will be
made available to any member on request, as per provisions
of section 136(1) of the Act. Any shareholder interested
in obtaining such information may write to the Company
Secretary at complianceofficer@sbfc.com.

Compliance with the Code of Conduct

All Directors, Key Managerial Personnel and Senior
Management of the Company have confirmed compliance
with the Code of Conduct applicable to the Directors and
employees of the Company. The Managing Director &
CEO has given the certificate as required under Regulation
34(3) read with Part D of Schedule V of the SEBI Listing
Regulations regarding compliance with the Code of Conduct
of the Company for the year ended on March 31, 2025, which
forms part of this Report, marked as ‘Annexure - XI'.

The Code of Conduct is available on the Company’s website
at weblink - https://www.sbfc.com/faq.

Vigil Mechanism

Your Company promotes ethical behaviour in all its business
activities and has established a vigil mechanism for its
Directors, Employees, and Stakeholders associated with
the Company to report their genuine concerns. The Vigil
Mechanism as envisaged in the Act and the Rules prescribed
thereunder and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is implemented through
the Whistle Blower Policy, to provide for adequate safeguards
against victimisation of persons who use such mechanism
and make provision for direct access to the Chairperson of
the Audit Committee.

The Whistle Blower Policy has been widely disseminated
within the Company. The Policy is available on the website
of the Company at the web link: https://www.sbfc.com/faq.

During the year, the Company received 9 whistle blower
complaints. All the 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.

Disclosure Under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 (“POSH Act”)

Your Company has in place a comprehensive Policy in
accordance with the provisions of POSH Act and Rules
made thereunder. The Policy has been widely communicated
internally and is placed on the Company’s intranet portal.
The Company ensures that no employee is disadvantaged
by way of gender discrimination.

Your Company has complied with the provisions relating to
the constitution of the Internal Complaints Committee under
the POSH Act to redress complaints received regarding
sexual harassment.

No cases were reported during the year under review. 4267
employees have undergone the POSH training in FY 2025.

Energy Conservation, Technology Absorption
and Foreign Exchange Earnings & Outgo

The particulars in respect of conservation of energy,
technology absorption and foreign exchange earnings and
outgo, as required under Section 134(3)(m) of the Act read
with Rule (8)(3) of the Companies (Accounts) Rules, 2014 for
FY 2025 are set out hereunder:

a. The Company has no activity involving the Conservation
of Energy or Technological or Technology Absorption;

b. The Company’s Foreign Exchange Earnings was Nil
during the year under review. The Company’s Foreign
Exchange Outgo was ' 521.18 million pertaining to
Interest expense on foreign currency borrowings and '
0.26 million pertaining to software license.

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 were no significant and material orders passed by the
regulators or courts or tribunals during the year impacting the
going concern status of the Company and its future operations.

Compliance with the Provisions of Secretarial
Standard - 1 and Secretarial Standard - 2

The Company has devised proper systems to ensure
compliance with the provisions of the Secretarial Standards,
i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of
Directors’ and ‘General Meetings’, respectively, issued by
The Institute of Company Secretaries of India (“ICSI”) and
such systems are adequate and operating effectively.

Disclosure pertaining to Insolvency &
Bankruptcy Code

There were neither any applications filed by or against the
Company nor any proceedings were pending under the
Insolvency and Bankruptcy Code, 2016 during the year under
review.

Disclosure on One-Time Settlement

During the year, the Company has not made any one-time
settlement for loans taken from the Banks or Financial
Institutions and hence the details of difference between
amount of the valuation done at the time of one-time
settlement and the valuation done while taking loan from the
Banks or Financial Institutions along with the reasons thereof
is not applicable.

General Disclosures

The Directors further state that no disclosure or reporting is
required in respect of the following items, as there were no
transactions/events related to these items during the financial
year under review:

^ There was no issue of equity shares with differential
rights as to dividend, voting or otherwise;

^ There was no issue of shares (including sweat equity
shares) to the employees of the Company under any
scheme, save and except Employee Stock Option
schemes referred to in this Report;

^ There was no raising of funds/issue of shares through
Preferential Allotment, Public Issue, Rights Issue or
Qualified Institutional Placement;

^ There was no buy back of the equity shares during the
year under review;

^ There were no voting rights which are not directly
exercised by the employees in respect of equity shares
for the subscription/purchase for which loan was given
by the Company (as there is no scheme pursuant to
which such persons can beneficially hold shares as
envisaged under Section 67(3)(c) of the Act);

^ The Company has completed all corporate actions
within the specified time limits. The securities were not
suspended from trading during the year due to corporate
actions or otherwise;

^ There was no revision made in the Financial Statements
or the Board’s Report of the Company;

^ Mr. Aseem Dhru, Managing Director & CEO and Mr.
Mahesh Dayani, Executive Director did not receive any
remuneration/commission from Holding/Subsidiary of
the Company during FY 2025.

^ The Company being an NBFC, the provisions relating to
Chapter V of the Act, i.e., acceptance of deposit, are not
applicable. Disclosures as per NBFC regulations have
been made in this Annual Report.

Acknowledgement

Your Directors would like to express their sincere
appreciation for the co-operation and assistance received
from shareholders, debenture holders, debenture trustee,
bankers, financial institutions, regulatory bodies and other
business constituents during the financial year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives,
officers and staff, resulting in the successful performance of
the Company during the financial year.