To,

The Shareholders,

SK Finance Limited

The Directors have pleasure in presenting the 31^st (Thirty-First) Annual Report on the business and operations of SK Finance Limited (hereinafter referred as "the Company") together with the audited financial statements for the Financial Year ended on 31^st March, 2025.

The Company's financial performance for the year ended on 31^st March, 2025 is summarized below:

• Total income for the year increased by 32.73% to Rs 2,38,637.77/- Lakhs as compared to Rs 1,79,794.917- Lakhs in 2023-24.

• Profit before tax for the year was Rs 48,476.09/- Lakhs as compared to Rs 39,932.13/- Lakhs in 2023-24, showing a significant growth of 21.40%.

• Profit after tax for the year was Rs 37,966.71 /- Lakhs as compared to Rs 31,192.33/- Lakhs in 2023-24, showing a significant growth of 21.72%.

The detailed analysis of income and expenditure and financial ratios is made in the "Management Discussions and Analysis Report" forming part of this Annual Report.

The Company offers, a wide range of commercial loans such as New and Used Commercial vehicle (excluding M&HCV), Car Loan,Tractor Loan, Two-Wheeler Loan, Micro, Small & Medium Enterprises (MSME) Loan and Others (Co-lending, Trade Advance and Personal Loan). The product wise disbursement of the Company for Financial Year 2024-25 is summarized here below:

(Rs in lakhs)

During the Financial Year 2024-25, the Company crossed the total asset size of Rs 15,41,939.917- Lakhs. The AUM of the Company stood at Rs 13,26,112.89/- Lakhs as at 31^st March, 2025 compared to Rs 10,47,609.08/- Lakhs as at 31^st March, 2024 registering a robust growth of 26.58% on Year on Year (YoY) basis.

The Company further expanded its geographical presence by reaching out to semi urban/rural areas and increased its footprint by opening new branches and making it more accessible to its customers. The Company strengthened its presence across the 12 states and union territories with a network of more than 648 branches by adding 69 branches during the year under review.

Capital adequacy ratio ("CAR") as at 31^st March, 2025 under Ind-AS stood at 29.51% which is well above the minimum regulatory norms for non-deposit accepting NBFCs. Out of the above, Tier I capital adequacy ratio stood at 29.51% and Tier II capital adequacy ratio stood at 0% respectively.

The following material events which are covered in detailed in the later section of this Board Report inter-alia are as mentioned below:

1. The Company has filed draft red herring prospectus dated May 1, 2024 ("DRHP") with the Securities and Exchange Board of India ("SEBI"),

BSE Limited ("BSE") and the National Stock Exchange of India Limited("NSE") for the Initial public offer of its equity shares of face value of Rs1 each comprising a fresh issue of Equity Shares and an offer for sale of Equity Shares by certain selling shareholders ("Offer"). The Company has received In-Principal Approval from SEBI and both the stock exchanges i.e. NSE and BSE.

2. The Company has approved the new set of Articles of Association of the Company.

3. The Company has approved revision in Employee Stock Option Plan 2018 ("ESOP PLAN").

4. The Company has approved the change in the composition of the Board of Directors.

A detailed discussion on the following aspects is included in the "Management Discussion and Analysis Report" in accordance with the applicable provisions of the Master Direction - Reserve Bank of India (Non-Banking Financial Company Scale Based Regulation) Directions, 2023 ("RBI Master Directions") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") annexed as Annexure-1:

a. Global and Indian Economy;

b. Industry structure and developments;

c. Opportunities and Threats;

d. Segment-wise or product-wise performance;

e. Outlook;

f. Risks and concerns;

g. Internal control systems and their adequacy;

h. Discussion on financial performance with respect to operational performance;

i. Material developments in Human Resources / Industrial Relations front, including number of people employed;

j. Details of significant changes in key financial ratios along with a detailed explanation therefore;

k. Such other material aspects.

During the year there was no change in the nature of business of the Company.

However, your Company had amended object clause of its Memorandum of Association ("MOA") to solicit and procure insurance business as Composite Corporate Agent without any risk participation as per Insurance Regulatory and Development Authority of India (IRDAI) guidelines as approved by the shareholders in the Extra-ordinary General meeting dated 11^th March, 2 024. Thereafter the Company had received certificate of registration to act as a Corporate Agent (composite) under the IRDAI (Registration of Corporate Agents) Regulations, 2015 on December 18, 2024.

Thereafter, The Company has started the business and operations of Corporate Agent.

The Board of Directors and the shareholders of the Company by resolutions passed on April 18,2024 and April 25, 2024 respectively, have approved, subject to necessary approvals, Initial public offer of its equity shares of face value of Rs1 each comprising a fresh issue of Equity Shares up to 5,000 million and an offer for sale of Equity Shares by certain selling shareholders of up to 17,000 million ("Offer"). The Company has filed draft red herring prospectus dated May 1, 2024 ("DRHP") with the Securities and Exchange Board of India ("SEBI'j, BSE Limited ("BSE") and the National Stock Exchange of India Limited("NSE").

The Company has received the In-principal approval from both the Stock exchanges i.e. National Stock Exchange of India Limited & BSE Limited and SEBI.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OFTHE COMPANY WHICH HAVE OCCURRED IN BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT There were no material changes and commitments, affecting the financial position of the Company which have occurred in between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

Since the Company is a Middle-Layer Non-Banking Financial Company ("NBFC") registered with Reserve Bank of India ("RBI"), therefore as required under section 45-IC of the Reserve Bank of India Act, 1934 ("RBI Act"), the Company has transferred a sum of Rs 7,593.34/- Lakhs to statutory reserves out of profits.

Further, the Board of Directors does not propose to transfer any amount to general reserves of the Company.

With a view to enhance the growth and business of the Company and in order to deal with the uncertain economic environment, the board of directors aim to retain the resources of the Company. Accordingly, they do not recommend any dividend for the financial year ended on 31^st March, 2025.

The company has put in place a dividend distribution policy and observes compliance of the same. The policy is available on the website of the company at https://www.skfin.in/investor/policies-codes

Being a non-deposit taking NBFC, the Company has not accepted any deposits from the public within the meaning of the provisions of Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and provisions of the Companies Act, 2013 ("the Act") are not applicable on the Company. Further, the Company shall not accept deposits from public without obtaining prior approval from the RBI.

The RBI granted the Certificate of Registration to the Company vide Registration No. B-10.00080, to commence the business of a Non-Banking Financial Institution without accepting deposits. The Company is categorized as Non-Banking Financial Company - Middle Layer (NBFC-ML), and has complied with and continued to comply with RBI Master Directions and other applicable regulations issued by the RBI from time to time, to the extent applicable. The Company is majorly operating in two verticals, vehicle financing and financing for Micro, Small and Medium Enterprises ("MSME").

During the year, following changes took place in the Share Capital structure of the Company:

There has been no change in the Authorized Capital Structure of the Company during the year under review.

As at March 31,202 5, the authorized share capital of the Company was Rs 30,00,00,000/- (Rupees Thirty Crore only) consisting of 30,00,00,000 (Thirty Crore) equity shares of face value of Rs 1 (Rupees One only) each.

During the year, the following changes were effected in the issued, subscribed and paid-up share capital of the Company

Based onshareholder'sapproval dated 11^th March, 2024, the Board has approved the resolution for allotment of Bonus shares on 08^th April, 2024.

During the year, 2,57,140 (Two Lakh Fifty-Seven Thousand One Flundred and Forty) equity shares of the face value of Rs 1/- (Rupees One only) each were allotted to the eligible employees upon the exercise of the stock options by the eligible employees with due approvals from the Nomination and Remuneration Co m m i ttee (" N RC").

Post the allotment of equity shares as mentioned aforesaid, the issued, subscribed and paid-up equity share capital of the company as on 31^st March, 2025 stood at 13,40,02,204/- (Rupees Thirteen Crore Forty Lakhs Two Thousand Two Flundred and Four only) consisting of 13,40,02,204(Thirteen Crore Forty Lakhs Two Thousand Two Flundred and Four) equity shares of Rs 1/- (Rupees One only) each. The new equity shares issued ranked pari-passu with the existing equity shares of the Company.

No Equity Shares were issued with differential rights as to dividend, voting or otherwise.

Capital adequacy as at March 31, 2025 under Ind-AS stood at 29.51% which is well above the minimum regulatory norms for non-deposit accepting NBFCs.

The Company had formulated and implemented Employee Stock Option Plan 2018 ("Plan"/"Scheme") approved by the shareholders on 11^th September, 2018, as amended from time to time. The Board of Directors and/or the NRC being the administrator(s) under the Plan, inter-alia, administers and monitors the Plan in accordance with the provisions of the Act and rules made thereunder. During the year under review, 21,600 options were granted to eligible employees under the Plan. The details of the Options under the scheme are summarized below:

Employee-wise details of options granted to:

a) Key Managerial Personnel:

b) Any other employee who received a grant of Options in any one year of Options amounting to five percent or more of Options granted during that year: The following employees have received grant of options amounting to five percent or more of Options granted during that year:

1. Sameer Arora, 2. Ritesh Sharma, 3. Pratit Vijayvargiya, 4. Cirish Dangayach, 5. Nripendra, Singh, 6. Rohit Srivastava, 7. Anshul Jain, 8. Joydeep Mitra, 9. Shyam Singh Chandel, 10. Kunal Solanki, 11. Rohit Bhatt, 12. Yogesh Sethi, 13. Munish Dayal

c) Identified employees who were granted Options, during any one year, equal to or exceeding

one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant: None

The Company has diversified funding sources from Public Sector Banks, Private Sector Banks, Foreign Bank, Financial Institutions including foreign institutions, Mutual Funds, etc. During the year under review, the Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured Debentures, Term Loans,

Commercial Papers, External commercial Borrowing etc., and has also maintained prudential Asset Liability Match throughout the year. The Company sourced long-term debentures and loans from banks and other institutions in line with Company's Resource Planning Policy.

The overall borrowing limit of the Company has been increased to Rs 18,000 crores by special resolution by the shareholders through Postal Ballot on 07^th December, 2024.

During the year under review, your Company has issued Non-Convertible Debentures ("NCDs") and raised an amount aggregating to Rs 1,60,000/- (Rupees One Lakh Sixty Thousand) Lakhs on a private placement basis, in various tranches and the NCDs are listed on the debt market segment of BSE Limited.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing debts, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Stock Exchange on a quarterly basis.

The briefdetailsof NCDs issued on a private placement basis during theyear 2024-25 is mentioned as under:

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption. The assets of the Company which are available byway of security are sufficient to discharge the claims of the debt security holders as and when they become due.

During the year, the Company assigned/securitized its loan portfolio having principle value ofRs 3,48,172.707- Lakhs of which Rs 2,30,331.98/- Lakhs were securitized through issue of Pass Through Certificates in tranches and Rs 1,17,840.72/- Lakhs was assigned /securitized in Direct Assignment mode in 11 tranches.

During the year, the Company has raised fresh Secured Loans of Rs 3,33,750.00/- Lakhs from Banks and Financial Institutions.

During the year, the Company had availed total External Commercial Borrowing (ECBs) of US$ 100 Million from Asian Development Bank for financing prospective borrower as per the ECB guidelines issued by RBI from time to time. Out of same US$ 60 Million was raised in FY 24-25. The maturity of the borrowing is sixty (60) months after the Disbursement Date of each Tranche of Loan.

As at 31^st March, 2025, the Company has outstanding Commercial Paper (CPs). The brief details of the CPs issued during theyear are tabled below:

The Company has observed compliance with the Operational Circular for issue and listing of Non-Convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper issued by SEBI and the Fixed Income Money Market and Derivatives Association of India (FIMMDA) guidelines in all its CP issuances.

The above-mentioned Commercial Papers were listed on BSE Limited.

The Company's financial discipline and prudence is reflected in the credit ratings ascribed by rating agencies. During the year under review, the Company reported the following changes in the credit ratings.

All of the above ratings indicate a high degree of safety with regard to timely payment of interest and principal. The company has placed on its website all credit ratings obtained for all its outstanding instruments and has intimated the revision in the ratings to the stock exchange.

Pursuantto Sections 124and 125oftheAct read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividend, if not claimed for a period of 7 years from the date of transfer to Unpaid Dividend Account of the Company, shall be transferred to the Investor Education and Protection Fund ("IEPF"). TheCompany hasa board approved Policyforclaiming unclaimed interest or principal on Non-Convertible Securities in pursuance to the Regulation 61A

(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, read with Circular SEBl/HO/DDHS/DDHS-RAC-l/P/ CIR/2023/176 issued on 08^th November, 2023(as amended from time to time).

The Company issued Compulsory Convertible preference shares (CCPS) in the year 2012 which were converted into the equity shares of the company on 27^th March, 2017. During the year under review, the company has transferred dividend of Rs 1,199/- (Rupees One Thousand One Hundred and Ninety Nine only) remaining unclaimed on the aforesaid CCPS relating to the financial year 2016-17 to IEPF and necessary filings were made to the relevant authorities. The details of the same are provided on the website of the company at https://www.skfin.in/ other-disclosure.

Further, there are no amount lying in the unclaimed dividend account.

The company has appointed Ms. Anagha Bangur, Company Secretary & Compliance Officer of the company as the "Nodal Officer" of the company for the purpose of the IEPF Rules.

The Board of Directors of the Company has an optimum combination of Executive and Non- Executive Directors in adherence to the applicable provisions of the Companies Act, 2013 and SEBI LODR. As on March 31, 2025, the Board comprised of Eight Directors, which comprises of two Executive (Managing Director & Whole-Time Director), Six Non-Executive Directors out of which Four are Independent directors and two are Nominee Directors including two women directors.

During the year, the following changes took place in the Directors and KMPs' of the Company:

During the year under review, there was no cessation or resignation of Directors from the Board.

1. The Board of Directors based on the recommendation of NRC approved the appointment of Ms. Nanda Sameer Dave (DIN: 08673208), as an Additional Director (Non-Executive and Independent) on the Board of the Company in their meeting held on 14^th March, 2024.

The Shareholders of the Company in their Extra-Ordinary General Meeting held on 25^th April, 2024 approved the appointment of Ms. Nanda Sameer Dave as an Independent Director on the Board of the Company for the tenure of 5 years effective from 14^th March, 2024 to 13^th March, 2029 considering her qualification, expertise, track record, integrity and other evaluation criteria and found her fit and proper to appoint herasan independent director of the Company.

2. The Board of Directors based on the recommendation from NRC approved the appointment of Mr. Mukul Mathur (DIN: 10025806), as an Additional Director (Non-Executive and Independent) on the Board of the Company in their meeting held on 29^th March, 2024.

The Shareholders of the Company in their Extra-Ordinary General Meeting held on 25^th April, 2024 approved the appointment of Mr. Mukul Mathur as an Independent Director on the Board of the Company for the tenure of 5 years effective from 29^th March, 2024 to 28^th March, 2029 considering his qualification, expertise, track record, integrity and other evaluation criteria and found him fit and proper to appoint him as an independent director of the Company.

The company has received all the requisite declarations from the aforesaid directors of the Company as prescribed in the Act, SEBI LODR, RBI Master Directions and enabling provisions of any other regulatory authority as applicable.

In accordance with the provisions of Section 152(6) of the Act read with the rules made thereunder and in terms of Articles of Association of the Company, Ms. Debanshi Basu (DIN: 07135074), Nominee Director got retired by rotation at the 30^th Annual General Meeting (ACM) of the Company held on 07^th August, 2024 and was re-appointed by the Shareholders of the company.

Further, Mr. Yash Setia (DIN: 09831391),

Whole-Time Director of the Company shall retire by rotation at the ensuing ACM and being eligible for reappointment, offers himself for re-appointment.

Pursuant to the provisions of Section 203 of the Act read with rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, SEBI LODR and RBI Master Directions, the following are the whole time key managerial personnel of the company as on 31^st March, 2025.

a) Mr. Rajendra KumarSetia, Managing Director and Chief Executive Officer (CEO)

b) Mr. Yash Setia, Whole time Director

c) Mr. Atul Arora, Chief Financial Officer

d) Ms. Anagha Bangur, Company Secretary and Compliance Officer

Therewasnochangein Key Managerial Personnel took place during the year under review.

The Independent Directors have submitted the requisite declarations under Section 149(7) of the Act and Regulation 25(8) of the SEBI LODR confirming that they meet the criteria of independence as stipulated under the provisions of Section 149(6) of the Act, Regulation 16 (1) (b) of SEBI LODR and are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations on record and after undertaking due assessment of the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company. The Independent Directors have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Act.

Pursuant to Schedule IV to the Act and theSEBI LODR, The independent directors met on March 19, 2025 without the presence of non-independent directors and members of the management and all the independent directors were present at such meeting.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the names of all the Independent Directors of the Company have been included in the Independent Director's databank maintained by the Indian Institute of Corporate Affairs (MCA). Further, all the Independent Directors of the Company are exempted from appearing for the Online Proficiency Exam except Mr. Mukul Mathur, who has appeared and passed the Online Proficiency Exam.

The Directors and Officers (D&O) insurance is liability insurance which covers or protects Directors of the Company from claims which may arise from decisions and actions taken while serving their duty. The Company has taken Directors & Officers Liability Insura nee for Board of Directors including Independent Directors and members of Senior Management for such quantum and risks as determined by the Board.

The Company has adopted a Code of Conduct for its Directors and Senior Management Personnel including a code of conduct for Independent Directors which suitably incorporates the duties of Independent Directors as laid down in Schedule IV of the Act and SEBI LODR. The said Codes can be accessed on the Company's website at https://www.skfin.in/ investor/policies-codes

In terms of the SEBI LODR, all Directors and Senior Management Personnel have affirmed compliance with their respective codes as at 31^st March, 2025. The Managing Director and Chief Executive Officer has also confirmed and certified the same, which forms part of Report on Corporate Governance.

Pursuant to the Regulation 25 of SEBI LODR, the Company has put in place a Familiarisation Programme to familiarise the Independent Directors about the Company and their roles, rights and responsibilities in the Company. Also, in terms of Schedule IV of the Companies Act, 2013, read with the rules made thereunder, the Independent Directors shall undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company.

The Company conducts programs/ presentations, periodically at regular intervals, to familiarise the Independent Directors with the strategies, operations and functions of the Company.

Further, on an ongoing basis as a part of the agenda of meetings of the Board/ Committee(s), presentations are regularly made to the Independent Directors on various matters inter alia covering the Company's businesses and financial operations, strategies, risk management framework, regulatory updates and other relevant matters. These presentations enable one-on-one interaction between the Independent Directors and the senior management of the Company/ internal auditor/chief compliance officer/ chief risk officer of the Company.

The details of the Familiarisation Programme during the Financial Year 2024-25 is explained in the Corporate Governance Report and the same is also available on the website of the Company https:// www.skfin.in/investor/policies-codes.

Pursuant to the provisions of Section 134(3)(e) of the Act, the Company's Nomination, Remuneration and Compensation Policy (NRC Policy) on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act is available on the website of the Company https://www.skfin.in/ investor/policies-codes.

The NRC Policyfor Directors, Key Managerial Personnel and Senior Management Personnel is aligned to the philosophy on the commitment of fostering a culture of leadership with trust. The policy aims to ensure that the level and composition of the remuneration of the Directors, Key Managerial Personnel and Senior Management Personnel is reasonable and sufficient to attract, retain and motivate them to successfully run the Company.

The Board of Directors during the year under review has reviewed and approved the revision in the NRC Policy on 28^th May, 2024, owing to the RBI Master Directions and RBI Circular vide letter no. DOR.COV. REC.No.2 9/18.10.002/2 022-2 3 on Guidelines on Compensation of Key Managerial Personnel (KMP) and Senior Management in NBFCs dated 29^th April, 2022.

Further, the Company has also adopted a ‘Policy on Fit and Proper Criteria for Board of Directors' for ascertaining the ‘Fit and Proper' criteria to be obtained at the time of appointment of directors and on a continuing basis, pursuant to the Master Direction - Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023. All the Directors of the Company have confirmed that they satisfy the ‘fit and proper' criteria as prescribed under the RBI Master Direction.

The Board, the Committees of the Board and independent directors continuously strive for efficient functioning of Board and its Committees and better corporate governance practices. Accordingly, pursuant to the provisions of Section 149(8) read with Schedule IV, Section 178(2), Section 134 of the Act, and Regulation 17 of SEBI LODR, the NRC in its meeting held on 3^rd May, 2023 has laid down the criteria for the performance evaluation of Board, its committees and individual directors after taking into consideration the guidance note issued by the Institute of Company Secretaries of India (ICSI) and Securities and Exchange Board of India (SEBI).

In addition, pursuant to the Schedule IV of the Act and SEBI (LODR), the Independent directors in their meeting held on March 19, 2025 reviewed the performance of non-independent directors, Board of Directors as a whole and chairperson of the listed entity taking into account the views of executive directors and non-executive directors.

Feedback was sought by way of well-defined structured online questionnaire forms covering various aspects of the Board's functioning and the evaluation was carried out based on responses received from the Directors. The Board also considered the evaluation results as collated by the NRC while conducting the evaluation and expressed their satisfaction with the evaluation process. The evaluation process endorsed cohesiveness amongst directors, smooth communication between the Board and the management and the openness of the management in sharing the information with the Board and placing various proposals for the Board's consideration and approval.

The evaluation process, manner and performance criteria for Independent Directors in which the evaluation has been carried out is explained in detail in the "Report on Corporate Governance" forming part of this report.

Pursuant to Section 2(52) of the Act read with Rule 2 A of the Companies (Specification of Definitions Details) Rules, 2014, public companies which have not listed their equity shares on a recognized stock exchange but have listed their non-convertible debt securities issued on private placement basis in terms of Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021, shall not be considered as listed company in terms of the Act. Hence, provisions of section 197(12) of the Act read with rules 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable on the company.

The calendar of the Board Meetings is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the meetings. Additional Board Meetings are convened by giving appropriate notices to address company's specific needs. The Board meets at regular intervals to discuss and decide on significant strategic, financial, operational and compliance matters.

The Board of Directors met 10 times during the year under review i.e. on 18^th April 2024, 30^th April 2024, 14^th June 2024, 28^th May 2024, 15^th July 2024, 14^th August 2024, 26^th September 2024, 24^th October 2024, 29^th January 2025 and 19^th March 2025.

Frequency and quorum at these meetings and the intervening gap between any two meetings were in conformity with the provisions of the Act, SEBI LODR and Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI).

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. As on 31^st March, 2025, the Board has 12 Committees, namely:

• Audit Committee

• Risk Management Committee

• IT Strategy Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholder Relationship Committee

• Investment Committee

• Executive Committee

• Product Approval Committee

• Customer Service Committee

• IPO Committee

• Wilful Defaulters-ReviewCommittee

Further, the Board has also formed sub-committees of the management in order to facilitate quick decision making and encourage delegation of authority. Presently, there are 6 sub-committees, namely:

• Asset Liability Management Committee

• IT Steering Committee

• Risk Management Committee of Executives

• Internal Complaint Committee

• Information Security Committee

• Wilful Defaulter-Identification Committee

During the year under review, all recommendations made by the committees were accepted by the Board of Directors.

Details of Board Committees along with their composition, name of members, chairperson, change in Composition during the year, terms of reference, meetings held during theyearand attendance thereat are provided in ‘Report on Corporate Governance' forming part of the Annual Report.

The Company's internal financial control system is designed to ensure operational efficiency, compliance with laws and regulations and accuracy and promptness in financial reporting. Review of the internal financial controls of the Company is undertaken annually which covers testing of process, assessing the risk where a material weakness exists, and testing and evaluating the operating effectiveness of internal control based on the assessed risk, review of key business processes for updating risk control matrices, etc. Moreover, the Company continuously upgrades its systems and undertakes review of policies, Standard Operating Procedure (SOP), guidelines, manuals and authority matrix and the Company has documented internal audit and control system for all layers compliances of the Company.

The internal financial control is supplemented by extensive internal audits, regular reviews by the management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements, its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses. The Audit Committee also monitors

the implemented suggestions. The statutory auditors of the Company have also certified on the existence and operating effectiveness of the internal financial controls relating to financial statements as at 31^st March, 2025. The details of the Internal Financial Controls and issues related thereto have been explained in the "Management Discussion and Analysis Report", forming part of this Annual Report.

The Board of directors, based on the recommendation of the Audit Committee, at their meeting held on July 15, 2024 appointed M/s. Deloitte Haskins and Sells, Chartered Accountants (Firm Registration No. 117365W) as Statutory Auditors of the Company, in terms of the RBI guidelines, to hold office for a continuous period of three years until the conclusion of 33^rd Annual General Meeting of the Company to be held in the FY 2027-28, for carrying out the audit of the financial statements of the Company. The said appointment was also approved by the shareholders in its meeting held on 7^th August, 2024.

M/s. Deloitte Haskins and Sells, Chartered Accountants have given their confirmation to the effect that they are eligible and have not been disqualified in any manner from continuing as Statutory Auditors of the Company.

Further, the Auditors' Report "with an unmodified opinion", given by the Statutory Auditors on the Financial Statements of the Company for FY 2024-25, is disclosed in the Financial Statements of the Company. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report for the year under review.

No instance of fraud in terms of the provisions of section 143(12) of the Act have been reported by the Statutory Auditors in their report for the FY 2024-25.

The Reserve Bank of India, through its circular dated 27^th April, 2021, issued Guidelines for Appointment of Statutory Auditors (the ‘Guidelines'/'circular'), mandating NBFCs (including HFCs) with an asset size of Rs 15,000 crore and above to appoint minimum two audit firms as joint auditors for a continuous period of three years. Further, the Guidelines also specifies that an auditor who has completed a period of three years (counted as one tenure) as on the date of the circular shall not be eligible for re-appointment in the same entity for six years (two tenures) after completion of one tenure of three years.

In line with the RBI requirements, the Board of Directors, based on the recommendation of the Audit Committee, at their meeting held on 28^th May, 2025, have approved and recommended the appointment M/s A. BAFNA & CO, Chartered Accountants (Firm Regn. No. - 003660C), as Joint Statutory Auditors for a period of three years from the ensuing 31^st Annual General Meeting till the conclusion of the 34^th Annual General Meeting to be held in the calendar year 2028 to the shareholders of the company. The Profile and other details of the proposed Joint statutory Auditors forms part of the Annual General Meeting notice.

M/s A. BAFNA & CO, Chartered Accountants have furnished a certificate of their eligibility as per Section 141 of the Act and have provided their consent for appointment as Statutory Auditors of the Company.

Pursuant to the provisions of section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI (LODR), the board of directors had appointed M/s V.M. & Associates, Company Secretaries (Firm Registration No P1984RJ039200) to conduct secretarial audit of the company for the financial year ended 2024-25 in their meeting held on 28^th May, 2024. The Secretarial Audit Report in Form MR-3 is annexed to this report as Annexure-3. Your Directors are pleased to inform that there were no qualifications, reservation or adverse remark or disclaimer in the audit report for the financial year 2024-25.

Pursuant to Regulation 24A(2) of SEBI LODR, a report on secretarial compliance for Financial Year ended 31^st March, 2025 has been issued by M/s V.M. & Associates, Company Secretaries (Firm Registration No P1984RJ039200). The said report is also available on the website of the Company at https://www.skfin.in/investor/ stock-exchanae.

Further, the Board of Director has approved the re-appointment of M/s V. M. & Associates, Company Secretaries as Secretarial Auditors of the Company to carry out secretarial audit of the Company for the financial year 2025-26 in their Board meeting held on 28^th May, 2025.

During the period under review, the auditors of the Company did not report, under section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's Report.

Pursuant to Section 186(1 l)(a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a NBFC registered with RBI 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

As regards to investments made by the Company, the details have been provided in notes to the financial statements of the Company for the year ended 31^st March, 2025 (Refer Note No. 9).

Pursuant to the provisions of the Act, Regulation 23 of SEBI LODR and as required under the RBI Master Directions, the Board based on the recommendation of its Audit Committee, adopted a Policy on Materiality on Related Party Transactions and on Dealing with Related Party Transactions and the said policy is available on the website of the Company at https:// www.skfin.in/investor/policies-codes.

All the related party transactions that were entered during the financial year were in the ordinary course of business and on an arm's length basis. There were no materially significant transactions made by the company with the related parties either individually or taken together with the previous transactions which may have a potential conflict with the interest of the companyat large. All the related party transactions are placed before the Audit Committee and subsequently before the Board of Directors for approval and review on quarterly basis. Transactions with related parties, as per the requirements of Ind-AS, are disclosed in the Notes to Accounts annexed to the financial statements (Refer Note No. 38)

Pursuant to the provisions of Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions were entered by the Company during the year which required to be reported. Accordingly, the disclosure of Related Party Transactions in Form AOC-2 is not applicable on the company.

Pursuant to Section 177(9) and 177(10) of the Act and Regulation 4(2)(d)(iv) and Regulation 22 of the SEBI LODR, the Company has in place a whistle blower policy/vigil mechanism to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. A whistle blowing or reporting mechanism, as set out in the Policy, invites all Directors and employees to act responsibly to uphold the reputation of the Company. The Policy aims to ensure that serious concerns are properly raised and addressed and are recognized as an enabling factor in administering good governance practices.

ThisVigil Mechanism oftheCompanyisoverseen bythe Audit Committee and provides adequate safeguard against victimization of employees and also provides direct access to the Chairman of the Audit Committee in exceptional circumstances. The whistle blower complaints are reviewed by the Audit Committee on a yearly basis. The Vigil Mechanism/Whistle Blower policy is available on the website of the Company at https://www.skfin.in/investor/policies-codes.

During the year, Six (6) whistle blower event was reported and which was resolved by taking necessary action. Thus, the mechanism is functioning well. None of the personnel have been denied access to the Chairperson of Audit Committee.

The Company has a Board approved Anti-Bribery and Anti-Corruption Policy ("Policy") which serves as a guide for all employees, directors and associated persons for ensuring compliance with applicable anti-bribery and anti-corruption laws, rules and regulations.

The Company follows a ‘zero-tolerance approach' towards bribery and corruption and is committed to act professionally, fairly and with integrity in all its business dealings and relationships. The Company a Iso conducts training for employees to make them aware of the corrupt practices and mandatorily compliance of Code of Conduct of the Company. The said policy is disclosed on the website of the Company at https:// www.skfin.in/policies.

Brief details of Anti-Bribery complaints during the year is mentioned as follows:

i. The steps taken or impact on conservation of energy:

The operations of the Company, being a financial service do not require intensive consumption of electricity. However, the Company is taking all possible measures to conserve energy. Several environment friendly measures were adopted by the Company as prescribed below.

ii. The steps taken by the Company for utilizing alternate sources of energy:

• The Company has installed energy efficient LEDs lighting fixtures in all newly opened branches during the Financial Year.

• Discontinued the use of paper towels at the registered office, conserving approx. 12 lakh paper sheets annually and reducing carbon emission by around 32 tC02e.

• Generated and consumed 76,505 KWh of Solar power during the financial year, avoiding approx. 54.78 tC02e of emissions.

• Implemented administrative controls to ensure all unused lights and appliances are switched off at work hours.

• Rolled out energy audits at the registered officeand all branches, promoting awareness, establishing efficient systems and reduction in energy consumption and wastage.

• Formed an ESC Council to lead sustainability efforts, with dedicated housekeeping staff trained to optimize energy usage.

• Replaced plastic bottles at the registered office with steel alternatives to reduce plastic waste and enhance employee health.

• The Company has updated its Environmental and Social (E&S) policy to include:

• Workplace health and safety, recycling and climate change.

• Stakeholder engagement and additional clauses referring to Supplier Code of Conduct (COC), sustainable sourcing and supply chains, Indigenous community impact, Land acquisition & involuntary resettlement.

• Updated the HR policy with clauses on workplace protection, security, social justice & employee well-being.

• Creating environmental awareness by way of distributing the information in electronic /digital form;

• Reduction in water and energy consumption and recycling of waste paper generation at various locations; and

• Education and awareness programs for employees.

iii. The Capital investment on energy conservation equipment:

As per the business activities carried out by your Company, this year the Company has installed Motion sensors for saving the energy at large at its registered office as capital investment on energy conservation equipment.

i. The efforts made towards technology absorption:

The Company has improved operational process and patron overall journey, and has launched cognitive chatbot platform for self-service with the regional level support to manage customer accounts 24X7 which results in reducing customer queries. Along with effective communication with customers, the Company's integrated WhatsApp chatboat provides instant updates on their queries resulting in reducing the waiting time of the agents.

ii. The benefit derived like product improvement, cost reduction, product development or import substitution:

The Company uses the enhanced information technology in business operations which results in quicker loan turnaround time, reduction in transaction costs and digitized the collection processes.

iii. In Case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

a) The details of technology

imported: Not Applicable

b) The year of import: Not Applicable

c) Whether the technology has been fully absorbed: Not Applicable

d) If not fully absorbed, areas where absorption has not taken place, and the reason thereof: Not Applicable

iv. The expenditure incurred on Research and Development: Not Applicable

The details of foreign exchange earnings and foreign exchange expenditures are as below:

(Amount in Lakh)

Pursuanttothe provisions of the RBI Master Directions, SEBI LODR and the Act, your Company has adopted a Risk Management policy which ensure sustainable business growth with stability and minimize unfavorable impact on the business objectives, develop stakeholder value, undertake businesses that are well understood and within acceptable risk appetite and develop a strong risk culture across the Company. Further, this Policy seeks to sustain and enhance long-term competitive advantage for the Company and enable the Company to proactively manage uncertainty and changes in the internal and external environment to limit negative impacts and capitalize on opportunities. The Risk Management policy is available on the website of the Company at https://www.skfin.in/invest.or/policies-codes.

Your Company is exposed to various risks that are an inherent part of any financial service business which inter alia include the following:

a) Credit Risk: Credit risk framework is defined by credit policies and product policies that set out the principles and control requirements under which credit is extended to customers in various business verticals. The policies and standards cover all stages of the credit cycle, including origination, credit approval, documentation, administration, monitoring and recovery. The Company has laid down limits and caps on various aspects to control the magnitude of credit risk. Regular and timely risk reporting with adequate control mechanism is prevalent across the organisation. Loan administration and monitoring is carried out through portfolio profiling, early warning framework and other credit risk activities around asset quality trends and concentration. The credit culture of the Company mandates that lending is based on credit analysis, with full understanding of the purpose of the loan and is commensurate to customer's financials and ability to repay from business operations.

b) Market & Liquidity Risk: Market risks framework reviews and monitor the risks arising from movement in interest rates and exchange rates. It ensures adherence to the RBI guidelines and Policy framework on Liquidity Risk Management Policy as well monitors and ensures adherence to the tolerance limit as approved by the Board. It a Iso develops a contingency funding plan in case of exigencies. It establish the principles for Market & Liquidity Risk Stress Testing in the system.

c) Operational Risk: Operational Risk has been defined by the RBI as the risk of loss due to inadequate or failed internal processes, people, system or external events, including legal risk but excluding strategic and reputational risks and it is inherent in all banking/ financial products, activities, processes and systems. This is managed through a Board-approved Operational Risk Management Policy, structured around the Three Lines of Defence: business unit (first line), an independent Operational Risk Management Department (ORMD) (second line), and Internal Audit (third line). These units collaborate to manage, monitor, and mitigate operational risks effectively. The ORMD implements the framework, overseen by the Operational Risk Management Department, which reports to the Risk Management Committee of Executive (RMCE). Outsourcing Risks, being vital part of operational risk, are managed under an Outsourcing Risk Policy, ensuring due-diligence, oversight and compliance with RBI guidelines. The Company has a comprehensive Business Continuity Management (BCM) plan in place with policies, and procedures meticulously designed to align with regulatory guidelines. The ORMD is tasked with coordinating with various Units to identify the critical business functions and processes across the Company, for which effective Business Continuity Plan ("BCP") needs to be planned for.

d) Foreign Exchange Risk: defined as the risk that a Company may suffer losses as a result of adverse exchange rate movements during a period in which it has an open position, either spot or forward, or a combination of the two, in an individual foreign currency. Companies are also exposed to interest rate risk, which arises from the maturity mismatch of foreign currency positions. Even in cases where spot and forward positions in individuals currencies are balanced, the maturity pattern of forward transactions may produce mismatches. As a result, Companies may suffer losses as a result of changes in permia/ discounts of the currencies concerned.

Compliance risk has been defined asthe risk of legal or regulatory sanctions, material financial loss, failure to protect customer information or loss to reputation a Company may suffer as a result of its failure to comply with laws, regulations, rules, policies related self-regulatory organization standards, and codes of conduct as applicable

f) Information Technology and Information/ Cyber Security Risk: I nformation Tech nology a nd Information/Cyber Security Risk defines as the business risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an enterprise. Your Company is committed towards creating an environment of increased risk awareness at all levels. It aims to constantly upgrade the security measures to ensure avoidance and mitigation of various risks. Your Company has policies and procedures in place to measure, assess, monitor, and manage these risks systematically across all its portfolios and also implemented required security technology to mitigate identified risks.

The Board has formed a Risk Management Committee to identify the risks impacting the business, formulate strategies/ policies aimed at risk mitigation as part of risk management. The Risk Management Committee (RMC), functions in line with the RBI Master Directions and SEBI LODR. The Board of Directors has also constituted Risk Management Committee of Executives and Asset Liability Management Committee ("ALCO Committee") to provide the support functions to the Risk Management Committee of Board in the day to day affairs of the company.

The details of the Risk Management Framework and issues related thereto have been explained in the "Management Discussion and Analysis Report" forming part of this Annual Report.

The Company's Corporate Social Responsibility (‘CSR') initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as health and wellness, sanitation and hygiene, education including education through Cinema on Wheels and vocational skill development, women empowerment, animal welfare, promoting sports for underprivileged children, environmental conservation, Fitness Programs, Autism Care Centre & Supporting Hospitals, Traffic Road Safety programs and Art and Culture.

During the year, the Company has, in consonance with the CSR policy of the Company, undertaken a number of initiatives that contribute to the society at large. The company has in place, a duly constituted CSR Committee for fulfilling the corporate social responsibility objectives of the Company. The details on CSR Activities undertaken by the Company for the Financial Year 2024-25, as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014, is provided in the "Annual Report on CSR Activities" annexed as Annexure - 4

The Company's CSR Projects are compliant with the CSR mandate as specified under Section 135 read with Schedule VII of the Act along with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), as amended from time to time and in line with notifications issued by the Ministry of Corporate Affairs ("MCA"), from time to time.

The Corporate Social Responsibility Policy has been hosted on the website of the Company at https:// www.skfin.in/investor/policies-codes.

The company has strong control to ensure adherence with all the applicable laws and regulations.

Secretarial Standards are formal guidelines that establish standard procedure and structure for undertaking specific tasks and actions within an organization. These standards are in addition to the provisions of the Companies Act, 2013 and not in substitution to the original legal requirements. Pursuant to section 118(10) of the Companies Act, 2013, every Company shall observe Secretarial Standards with respect to general and board meetings specified.

The company has implemented proper systems to ensure compliance with the all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and have complied with the same.

The Company has designed a robust and comprehensive internal control system across all major processes to ensure efficient operations, compliance with laws and reliability of financial reporting. Internal Audit is conducted by an in-house Head of Internal Audit. The internal audit is undertaken based on a robust internal audit charter and a risk-based internal audit policy, outlining the audit purpose, role, structure, authority and responsibilities of the Internal Audit Department. The Risk Based Internal Audit framework supports the system, which evaluates the effectiveness of internal controls, risk management and governance processes to provide independent assurance to the Board of Directors and Audit Committee of the Board. The Risk Based Internal Audit framework

is appropriate for the business's size, scale and complexity and the risk based internal audit plan is developed based on the risk profile of its activities. The Audit Committee of the Board approves the risk based internal audit plan annually and regularly reviews the Head of Internal Audit observations, performance status, providing guidance as needed.

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act, read with Rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at https:// www.s kf i n. i n /i n vesto r/i n vesto r-se rvi ces

The Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Act for any of the services rendered by the Company. Accordingly, the maintenance of cost records is not applicable on the company.

The company recognizes its role as a corporate citizen and endeavors to adopt the best practices and the highest standards of Corporate Governance through emphasizing on transparency and disclosures in and around the company. The Company is committed in carrying out its activities on ethical stances and providing accountability to its customers, government and others. The company believes in balancing the interests of its stakeholders such as shareholders, management, customers, suppliers, government, etc. The report on corporate governance forms integral part of this Annual Report.

The Company is a High Value Debt Listed Entity ("HVDLE") pursuant to the provisions of the SEBI LODR. Accordingly, Regulation 16 to Regulation 27 of the SEBI LODR in respect of Corporate Governance is applicable to the Company with effect from 07^th September, 2021 on a "comply or explain basis" until 31^st March, 2025 and on a mandatory basis thereafter. In accordance with the same the company has complied with all the provision of Regulation 16 to Regulation 27 of SEBI LODR and RBI Master Direction during the year.

A "Report on Corporate Governance" together with a certificate from the practicing company secretaries M/s V. M. & Associates, Company Secretaries regarding compliance of conditions of corporate governance as per the relevant provisions of the SEBI LODR is attached and forms part of this Annual Report. The report contains the details as required to be provided on the composition and category of directors, number

of meetings of the board, composition of the various committees, annual board evaluation, remuneration policy, criteria for board nomination and senior management appointment, whistle blower policy/ vigil mechanism, disclosure of relationships between directors inter-se, general body meetings and other disclosures etc.

As required in terms of Regulation 17(8) of the SEBI LODR, the Chief Financial Officer and the Managing Director & CEO of the Company have submitted a compliance certificate to the board as specified in Part B of Schedule II of the SEBI LODR regarding the Financial Statements and Internal Controls relating to financial reporting for the year ended on 31^st March, 2025. The said Certificate is attached as Annexure-2 and forms part of this Report.

The company has always believed in safety of Women in and around the organization, to achieve the same the company has in place a policy for Prevention of Sexual Harassment describing the procedure for the Redressal of complaints pertaining to sexual harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and rules made thereunder.

During the year, the company has conducted various workshops and sessions in relation to the awareness of the POSH Act amongst the employees.

An Internal Complaints Committee (ICC) has been set up in accordance with the POSH Act to redress complaints in relation to sexual harassment and all employees of the company are covered under this policy. During the FY2024-25, the Company had received 4 (Four) complaints on sexual harassment under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, which were duly investigated and resolved.

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 that would impact the going concern status of the Company and its future operations during the FY 2024-25.

No application or any proceeding has been filed against the Company under the Insolvency and Bankruptcy Code, 2016 (‘IBC Code') during the FY2024-25.

During the year under review and as on the date of this Report, your Company had no subsidiary, joint venture or associate company. Also, the Company did not become a part of anyjoint venture during theyear.

Other disclosures with respect to Board's Report as required under the Act read with the Rules notified thereunder and the SEBI LODR are either NIL or Not Applicable.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2025 and of the profit of the company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a going concern basis;

v. the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

FI

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

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Reserve Bank of India, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, government and other regulatory Authorities.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks, financial institutions, trustees for debenture holders and other business partners for the excellent support received from them during the year.

Finally, our employees, who are instrumental in helping the Company scale new heights, year after year, their commitment and contribution is deeply acknowledged. Your Directors look forward to your continuing support.