CASH FLOW

Your Directors have pleasure in presenting the 22^nd Annual Report of the Company together with the audited financial
statements for the financial year ended March 31, 2025.

1. FINANCIAL SUMMARY /PERFORMANCE OF THE COMPANY:

The standalone and consolidated financial statements for the financial year ended March 31, 2025 ('FY25'), forming
part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified
by the Ministry of Corporate Affairs.

Key highlights of financial performance of your Company are summarized below:

During the year under review, the Income from
operations of the Company was '2,180.72 crore. The
Asset Under Management (AUM) of the Company was
'6,029.08 crore as on March 31, 2025 as compared
to ' 11,198.72 crore as on March 31, 2024. During the
year the Company suffered a loss of '1,273.85 crore
as compared to profit of ' 626.02 crore in FY 2024.

Since the Company has reported a loss for the year
ended March 31,2025, no amount has been transferred
to the statutory reserves.

During FY25, the Company disbursements reached
'5,017.00 crore. As on March 31, 2025 Return on Asset
("RoA") stood at (9.2%), Return on Equity ("RoE") stood
at (31.0%) on standalone basis and Capital Adequacy
Ratio was at 36.31 % on standalone basis.

Your Company has strong distribution network of 1,628
branches spread across 414 Districts of 19 states and
1 union territory. On portfolio quality, the Collection
Efficiency of portfolio was 92.0% for the quarter ended
March 31, 2025.

Your Company has AUM concentration norms at state,
district & branch level which ensures low impact

from region-specific issues. Detailed information is
provided in the Management Discussion and Analysis
report.

1.1 Resource Mobilization

Your Company has raised '4,078.87 crore of debt
during FY25. With the diversified lender base, your
Company has raised '731.51 crore through issue
of debentures, '1,510.54 crore through term loan,
'1,094.90 crore through securitization and '741.92
crore through direct assignment. Your Company has
a strong funding access with adequate cash and bank
balances of ' 1,790.80 crore as on March 31,2025. The
issue proceeds from non-convertible debentures have
been fully utilised as per the objects of the issue.

2. DIVIDENDS:

Considering your Company's growth, future strategy
and plans, your Directors consider it prudent to
conserve resources and do not recommend any
dividend on equity shares for FY25.

There are no unclaimed dividends pertaining to
previous years or the year under review. Accordingly,
there is no requirement to transfer any amount to the
Investor Education and Protection Fund (IEPF).

3. OPERATIONAL HIGHLIGHTS AND FUNDRAISE:

The operational highlights of your Company are as
follows:

• During FY25, the Company continued its operations
in 19 states and 1 union territory (viz. Andhra
Pradesh,Bihar, Chhattisgarh, Goa, Gujarat, Haryana,
Himachal Pradesh, Jharkhand, Karnataka, Kerala,
Madhya Pradesh, Maharashtra, Odisha, Rajasthan,
Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand,
West Bengal and Pondicherry).

• During FY25, the number of borrowers has decreased
from 33.19 lakh to 24.94 lakh on a consolidated basis.
The number of branches grew from 1,642 to 1,804
across the states on a consolidated basis.

• Total disbursements is '5,604.69 crore for FY25 on
consolidated basis.

3.1 Securitization:

Your Company has used securitization to improve its
asset and liability mix in line with extant guidelines
of RBI on securitization. As of March 31, 2025, out of
total AUM, securitized portfolio was '920.40 crore on
a standalone basis.

3.2 Direct Assignment :

During the year, your Company has sold loan portfolio
of ' 824.36 crore through Direct Assignment. Assigned
portfolio was ' 528.29 crore out of total AUM of
' 6,029.08 crore as of March 31, 2025 on a standalone
basis.

3.3 Public Deposits:

Your Company is registered with the Reserve Bank of
India (RBI), as a non-deposit accepting NBFC under
section 45-1A of the Reserve Bank of India Act, 1934,
(RBI Act, 1934) and reclassified as NBFC-MFI, effective
from April 13, 2015. Your Directors hereby report that
the Company has not accepted any public deposits
during the year and it continues to be a non-deposit
taking non-banking financial company in conformity
with the RBI guidelines.

3.4 RBI Guidelines:

As on March 31, 2025, the Company is in compliance
of the regulatory requirements of Net Owned Funds
('NOF') and Capital to Risk Assets Ratio ('CRAR'), as
defined under section 45-IA of the RBI Act, 1934, to
carry on the business of a Non-Banking Financial
Institution ('NBFI'). Your Company's Capital Adequacy
Ratio is as follows:

3.5 Statutory Reserve Fund:

As per section 45IC of RBI Act 1934, your Company
is not in requirement to transfer any amount towards
Statutory Reserve Fund for FY2025.

3.6 Asset Liability Management:

Your Company has a strong funding access with high
quality liquid assets (HQLA) which covered the net
cash outflow during FY25 in compliance with the RBI
Circular on Liquidity Risk Management Framework
for Non-Banking Financial Companies and Core
Investment Companies dated November 04, 2019.

Your Company continued to secure confidence from its
lenders for providing funds for its business operations.
Your Company has been maintaining a higher liquidity
surplus with positive mismatch across all ALM buckets.
Details of HQLA and LCR during FY25 are given below:

4. SHARE CAPITAL/DEBENTURES:

During FY25, the Paid-Up Equity Share Capital of the
Company has increased from '71,29,74,440/- (Rupees
seventy-one crore twenty-nine lakh seventy-four thousand
four hundred and forty) consisting of 7,12,97,444 (Seven
crore twelve lakh ninety-Seven thousand four hundred
forty-four) Equity shares of the face value of '10/- each
to '71,30,51,440 /- (Rupees seventy-one crore thirty lakh
fifty one thousand four hundred and forty) consisting of
7,13,05,144 (Seven crore thirteen lakh five thousand one
hundred forty-four) Equity shares of the face value of
10/- each on account of allotment of share pursuant to
exercise of ESOPs.

Allotment of shares under Employee Stock Options

Pursuant to the exercise of Employee Stock Options
(ESOPs) by the eligible employees under the Spandana
Employee Stock Option Scheme 2018 (ESOP Scheme
2018) and Spandana Employee Stock Option Scheme,
2021 (ESOP Scheme 2021) under Spandana Employee
Stock Option Plan 2018 (ESOP Plan 2018); and under
Spandana Employees Stock Option Scheme 2021-
Series A under Spandana Employees Stock Option Plan
2021- Series A (ESOP 2021-Series A), the Company has
allotted 7,700 (Seven thousand seven hundred) Equity
Shares of the face value of '10/- each during FY25.

Details of Secured Debt Securities as on March 31, 2025:

5. EMPLOYEE STOCK OPTION PLAN (ESOP PLAN)
AND EMPLOYEE STOCK OPTION SCHEME
(ESOP SCHEME):

Your Company had instituted Spandana Employees
Stock Option Scheme, 2018 ("the "ESOP Scheme
2018") and Spandana Employees Stock Option Scheme,
2021 ("the "ESOP Scheme 2021") under Spandana
Employees Stock Option Plan, 2018 (the "ESOP Plan
2018"); and Spandana Employees Stock Option Scheme

2021- Series A" under Spandana Employees Stock
Option Plan 2021- Series A ("ESOP 2021 - Series A")
to attract, retain, motivate the personnel for positions
of substantial responsibility and to provide additional
incentive to the Management team, Directors and
Employees of the Company and its Subsidiaries. The
Members of the Company have approved the ESOP
Plan 2018 and ESOP Scheme 2018 by passing a special
resolution at their Meeting held on June 14, 2018. ESOP

Scheme 2021 (under ESOP Plan 2018) was approved by
the Members on March 26, 2021 by passing a special
resolution through Postal Ballot. ESOP Scheme 2021 -
Series A (under ESOP Plan 2021) was approved by the
Members at the 18^th Annual General Meeting ("AGM")
of the Company held on September 28, 2021.

The NRC monitors the Plan in compliance with the
Companies Act, 2013 ("the Act"), the SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021
{"SEBI (SBEB & SE) Regulations"} and related laws. A
certificate from Secretarial Auditors of the Company
that the Scheme has been implemented in accordance
with SEBI (SBEB & SE) Regulations and are as per the
resolutions passed by the Members of the Company is
being placed at the ensuing Annual General Meeting.
The disclosures as required under the SEBI (SBEB &
SE) Regulations have been placed on the website of the
Company at https:// spandanasphoorty.com/investors.

6. AUDITORS:

6.1 Statutory Auditors:

As per Section 139 of the Act, read with the Companies
(Audit and Auditors) Rules, 2014, the Members of the
Company at the 21^st Annual General Meeting held on
July 30, 2024, had appointed BSR & Co. LLP, Chartered
Accountants (Firm Registration No101248W/W-100022)
as Statutory Auditors of the Company to hold office for
a term of three consecutive years from conclusion of
the 21^st Annual General Meeting till the conclusion of the
24^th Annual General Meeting of the Company to be held
in the calendar year 2027, subject to their continuity of
fulfilment of the applicable eligibility norms.

The Audit Reports given by the Statutory Auditors on the
Annual Audited Consolidated and Standalone Financial
Statements of the Company for FY25 is unmodified
and the same forms part of the Annual Report. The
Auditors' Reports read along with the Notes on the
Annual Audited Consolidated and Standalone Financial
Statements are self-explanatory and do not call for any
further clarifications under Section 134(3) (f) of the Act.

There has been no qualification, reservation or adverse
remark or disclaimer in our Reports.

During FY25, the Auditors had not reported any matter
under Section 143(12) of the Act, therefore no detail is
required to be disclosed under Section 134(3) (ca) of
the Act.

6.2 Secretarial Auditors:

Pursuant to the requirements of Section 204(1) of the
Act read with Rule 9 of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
M/s. Alwyn Jay & Co., Company Secretaries in Practice,
(CP No.6915), were appointed as the Secretarial Auditor
of the Company for FY25.

During FY25, the Secretarial Auditors had not reported
any matter under Section 143(12) of the Act, therefore
no detail is required to be disclosed under Section 134
(3)(ca) of the Act.

Further, in accordance with Regulation 24A of SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations"), M/s
Alwyn Jay & Co., Company Secretaries in Practice,
has issued the Annual Secretarial Compliance
Report, confirming compliance of the applicable SEBI
regulations and circulars / guidelines issued thereunder
by the Company. The Secretarial Audit Report and
Annual Secretarial Compliance Report for the financial
year ended March 31, 2025, are annexed to this report
as ''Annexure I and Annexure II" respectively.

During FY25, your Company has complied with the
provision of applicable Acts, Rules, Regulations,
Guidelines and applicable Secretarial Standards issued
by the Institute of Company Secretaries of India, etc.
except in respect of the matters mentioned in Annexure
A of Annual Secretarial Compliance Report along with
the Company's response as mentioned therein.

Furthermore, Regulation 24(A) of SEBI Listing
Regulations provides detailed norms for appointment,
re-appointment and removal of secretarial auditor.
Pursuant to recent amendments in the SEBI Listing
Regulations, a listed entity should appoint or re¬
appoint a peer reviewed Secretarial auditor firm as a
Secretarial auditor for not more than two terms of five
consecutive years, with the approval of its Members.

In conformity with above the Board has appointed
M/s Alwyn Jay & Co., Company Secretaries in
Practice, (Firm Registration No: P2010MH021500) as
Secretarial Auditors of the Company to hold office
for a consecutive term of 5 years from FY 2025-26 to
FY 2029-30, subject to the approval of the Members
of the Company. A proposal on the same forms part of
the AGM Notice.

6.3 Internal Auditors:

The Company has an independent internal audit
department headed by Chief Internal Auditor,
Mr. Sunand Sahu. The internal audit department broadly
assesses and contribute the overall improvement of
the organization's governance, risk management, and
control processes using a systematic and disciplined
approach. The internal audit team follows Risk Based
Internal Audit which helps the organization to identify
the risks and address them accordingly based on the
risk priority and direction provided by the Board of
Directors. The Internal audit reports are presented to
the Audit Committee of the Board on a quarterly basis.
Based on the reports of the internal audit team, the
process owners undertake corrective action in their
respective areas.

6.4 Cost Auditors:

The provisions of Section 148 of the Act read with
the Companies (Cost Records and Audit) Rules, 2014
relating to Cost Audit and maintaining of cost audit
records does not apply to the Company.

7. HOLDING / SUBSIDIARY COMPANIES /
ASSOCIATES / JOINT VENTURES:

The Company has following subsidiaries as on March
31, 2025:

The statement required to be provided with respect to
subsidiaries, associate companies and joint ventures
pursuant to the provisions of Section 129(3) of the Act
and Rule 5 of the Companies (Accounts) Rules, 2014 in
Form AOC - 1 is annexed herewith as “Annexure III".

During FY25, none of the Company ceased to be the
Company's subsidiaries, joint ventures, or associate
companies.

Regulation 16(1)(c) of the SEBI Listing Regulations,
defines "material subsidiary" as a subsidiary whose
turnover or net worth exceeds 10% of the consolidated
turnover or net worth respectively, of the listed
holding company and its subsidiaries at the end of
the immediately preceding financial year. None of
the subsidiaries mentioned hereinabove is a material
subsidiary as per the thresholds laid down under the
SEBI Listing Regulations.

Pursuant to the approval of the Members of the
Company on March 25, 2024, during FY25, the
Company had invested Rupees one hundred crore in
Criss Financial Limited by subscribing to the equity
shares offered by Criss Financial Limited

The Audited Financial Statements, the Auditors Reports
thereon and the Board's Reports for the year ended
March 31, 2025, of the subsidiary companies, shall be
available for inspection by the Members of the Company
at the registered office, during business hours on all
working days up to the date of the ensuing Annual
General Meeting. A Member who is desirous of obtaining
a copy of the accounts of the subsidiaries companies
is requested to write to the Company Secretary of the
Company at shareholders@spandanasphoorty.com.
Further, pursuant to the provisions of section 136 of
the Act, the financial statements, consolidated financial
statements of the Company and separate financial
statements along with auditors reports thereon of
each of the subsidiary is available on the website of the
Company at https:// spandanasphoorty.com/investors.

8. CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated financial statements have been
prepared in accordance with Indian Accounting
Standards (Ind AS) as prescribed in the Companies
(Indian Accounting Standards) Rules, 2015 as
amended from time to time and notified under section
133 of the Companies Act, 2013 (the Act), the circulars,
guidelines and directions issued by the Reserve Bank

of India (RBI) from time to time ("the RBI guidelines")
and other accounting principles generally accepted
in India.

9. DIRECTORS AND KEY MANAGERIAL
PERSONNEL:

The composition of the Board is in accordance
with the provisions of Section 149 of the Act and
Regulation 17 of the SEBI Listing Regulations, with an
optimum combination of Non-Executive Directors and
Independent Directors. The affairs of your Company are
being managed by a professional board comprising of
eminent personalities having experience and expertise
suited to guide the Company in the right direction.
Details (including changes) of the Directors of your
Company during FY 25 and till the date of this report
are as below:

*Mr. Kartikeya Dhruv Kaji resigned and ceased to be a Non-Executive
Nominee Director at the close of business hours on May 21,2024. Ms.
Saakshi Gera was appointed as Non-Executive Nominee Director
with effect from May 22, 2024 in place of Mr. Kartikeya Dhruv Kaji.
**Mr. Shalabh Saxena resigned and ceased to be a Managing
Director & Chief Executive Officer with effect from April 23, 2025.

The terms and conditions of appointment of
Independent Directors are available on the website
of the Company at https://spandanasphoorty.
com/investors. The Board is of the opinion that the
Independent Directors of the Company possess
requisite qualifications, experience, expertise and hold
highest standards of integrity.

The profile of the Directors is provided in the beginning
of the Annual Report. For more details of the Directors,
please refer the Corporate Governance Report.

9.1 Rotation of Directors:

In terms of the provisions of Section 152 of the Act,
Mr. Ramachandra Kasargod Kamath and Mr. Neeraj
Swaroop Non- Executive Nominee Director of the
Company, are liable to retire by rotation at the 22^nd Annual

General Meeting and are eligible for reappointment.
The Board of Director's at their meeting held on
May 28, 2025, recommended the reappointment of
Mr. Ramachandra Kasargod Kamath and Mr. Neeraj
Swaroop as the Non-Executive Nominee Directors to
the Members of the Company.

Brief profile of Mr. Kamath and Mr. Swaroop along with
Information as required under Regulation 36 of the SEBI
Listing Regulations and SS-2 -Secretarial Standard
on General Meetings with respect to Director's
appointment forms part of the AGM Notice.

9.2 Declaration by Independent Directors:

The Company has received a declaration from all the
Independent Directors of the Company, confirming that
they meet the criteria of independence as prescribed
under section 149 of the Act and have complied with
the Code for Independent Directors as prescribed in
Schedule IV to the Act.

9.3 Change in the Key Managerial Personnel of the
Company:

In terms of Section 203 of the Act, the Key Managerial
Personnel ('KMPs') the Company as on March 31,2025,
are: -

- Mr. Shalabh Saxena- Managing Director and Chief
Executive Officer

- Mr. Ashish Kumar Damani- President and Chief
Financial Officer

- Mr. Vinay Prakash Tripathi- Company Secretary

During FY 2025 there has been no change in KMPs of
the Company.

Further, Mr. Shalabh Saxena resigned and ceased to
be the Managing Director and Chief Executive Officer
of the Company with effect from April 23, 2025 and
the Board in its Meeting held on April 23, 2025, has
appointed Mr. Ashish Kumar Damani as Interim Chief
Executive Officer w.e.f April 23, 2025.

9.4 Familiarisation Programme for Independent
Directors:

The details of Familiarisation Programme for
Independent Directors is elaborated in the Report
on Corporate Governance which forms a part of this
Report as Annexure VIII.

9.5 Board evaluation:

The details of Board evaluation of all the directors,
committees, Chairperson of the Board, and the Board
as a whole is elaborated in the Report on Corporate
Governance which forms a part of this Report.

10. MEETINGS OF THE BOARD OF DIRECTORS:

During FY25, 13 (Thirteen) Board Meetings were
convened out of which 01 (One) Board Meeting
were convened through Audio-Visual Electronic
Communication Means (AVEC) ,03 (Three) Board
Meetings were convened physically and 09 (Nine)
meeting were convened through in-person and AVEC
means. The details related to Board Meetings are
provided in Corporate Governance Report forming part
of this Report as Annexure VIII.

The intervening gap between the Board Meetings is
within the period prescribed under the Act and SEBI
Listing Regulations. The notice and agenda of the
meeting is circulated to all Directors sufficiently well
in advance. All material information and minimum
information required to be made available to the Board
under Regulation 17 read with Schedule II Part-A of the
SEBI Listing Regulations, were made available to the
Board of Directors.

11. CODE OF CONDUCT FOR ITS DIRECTORS AND
SENIOR MANAGEMENT:

Pursuant to Regulation 17(5) of the SEBI Listing
Regulations, the Company has a Code of Conduct
for its Directors and Senior Management (Code). The
Code provides guidance and support needed for ethical
conduct of business and compliance of law. The Code
reflect the core values of the Company viz. Customer
Value, Ownership Mindset, Respect, Integrity, One Team
and Excellence. The Code is available at the website of
the Company at https://www.spandanasphoorty.com/
code-of-conduct.

The Directors and Senior Management Personnel, have
affirmed compliance as per Regulation 26(3) of the
SEBI Listing Regulations. A declaration signed by the
Company's Interim Chief Executive Officer to this effect
forms part of this Report as Annexure IV.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of Section 135 and Schedule VII of the Act
read with rules made thereunder; the Board of Directors
of your Company have constituted a CSR Committee.
The composition of the Committee is provided in the
Corporate Governance Report forming part of this
Report.

The details of the Corporate Social Responsibility
Policy adopted by the Company have been
disclosed on the website of the Company at https://
spandanasphoorty.com/policies and the details of
various CSR initiatives taken by the Company have been
disclosed on the website of the Company at https://
www.spandanasphoorty.com/programs-impact-latest

The Annual Report on CSR activities is annexed to this
report as “Annexure V".

13. DETAILS OF COMMITTEES OF THE BOARD OF
DIRECTORS OF COMPANY:

The Committees of the Board of Directors focuses on
certain specific areas and make informed decisions in
line with the delegated authority. They facilitate debate
on important issues and can be effective forums for
decision making. The following Board Committees,
constituted by the Board of Directors functions as per
their respective roles and defined scope:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders' Relationship Committee

5. Risk Management Committee

6. IT Strategy Committee

7. Management Committee

8. Asset Liability Management Committee

The details of Committee's composition, terms
of reference, number of meetings held including
attendance for respective committee meetings are
elaborated in the Report on Corporate Governance
which forms a part of this report.

14. CORPORATE GOVERNANCE:

In terms of Regulation 34(3) read with Schedule V of
the SEBI Listing Regulations, the detailed Report on
Corporate Governance along with a certificate on
compliance of Corporate Governance conditions,
received from M/s. Alwyn Jay & Co., Company
Secretaries in Practice, forms part of this report as
''Annexure VIII".

15. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:

The Management Discussion and Analysis Report
as required under Schedule V of the SEBI Listing
Regulations, forms part of this Annual Report.

16. BUSINESS RESPONSIBILITY AND

SUSTAINABILITY REPORT:

In pursuance of Regulation 34 of SEBI Listing
Regulations, the Business Responsibility and
Sustainability Report for FY25 is annexed to this report
as “Annexure IX".

17. THE ANNUAL RETURN:

Pursuant to sub-section (3)(a) of Section 134 and sub¬
section (3) of Section 92 of the Act read with Rule 12
of the Companies (Management and Administration)
Rules, 2014, a copy of Annual Return as at March 31,
2025 is available on the website of the Company at the
link: https://spandanasphoorty.com/investors.

18. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:

Information required under Section 134(3)(m) of the Act
read with Rule 8 of the Companies (Accounts) Rules,
2014 for the financial year ended March 31, 2025, are
as follows:

18. 1 Conservation of Energy:

Your Company operations are not energy intensive.
However, measures are being undertaken to reduce
energy consumption by using energy-efficient
computers and electrical equipment. The Company
believes in the optimum utilization of resources to
reduce usage and conserve energy. Your Company is
also exploring products to promote the use of renewable
energy sources among clients in their households.

18.2 Research and Development (R&D):

Research and Development (R&D) remains a perpetual
endeavour for our Company, encompassing social
research and the creation of novel products and
methodologies. This endeavour serves to elevate our
service quality and bolster borrower satisfaction by
fostering continuous innovation. Within the framework
of Microfinance Institution (MFI) norms, your Company

has been tailoring diverse lending product to fulfil
customer needs and thus reinforcing our commitment
to serving our customers effectively.

18.3 Technology absorption, adaptation, and innovation:

As we continue to evolve in the digital age, it is
imperative that we embrace technology to drive
efficiency, enhance customer experience and maintain
our competitive edge. Your Company is focused on
modernizing core business solutions coupled with
digitization and automation, leverage transformation
solutions to drive cost and process efficiencies,
enable analytics to reduce NPA, minimize credit
loss, increase profitability, leverage insights driven
data to upsell / cross sell products, manage risks
effectively, design and deliver a scalable infrastructure
to address expansion, build a secured environment to
ensure no data breaches and comply with regulatory
requirements.

To ensure successful technology absorption,
the Company prioritizes continuous learning and
training for our team members. By investing in their
skill development and providing access to relevant
resources, we empower our workforce to adapt to
new technologies and drive innovation within the
organization.

In adapting technology and innovations to
support business needs, the Company focuses on
implementing solutions that are specifically tailored to
meet the unique needs and challenges of our industry
and bring efficiency in the ecosystem. The Company
is in the process of developing micro-services-based
architecture to make all applications fully capable of
becoming agile in change management processes
as per continuously changing business needs of the
industry.

The Company additionally recognizes the importance
of customizing and integrating technology solutions
to seamlessly fit into our existing processes and
infrastructure. By working closely with technology
partners and vendors, we ensure that the solutions
we implement enhance efficiency and effectiveness
across the Organization.

18.4 Foreign exchange earnings and outgo:

During the year under review, the foreign exchange
outgo was equivalent to ' 19.46 crore towards term
loan interest payments to foreign lenders, procurement
of software license and travelling expenses etc.

19. PARTICULARS OF EMPLOYEES AND RELATED
DISCLOSURES:

The ratio of the remuneration of each director to the
median's employee's remuneration and other details
in terms Section 197(12) of the Act read with Rule
5(1) of the Companies (Companies Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
has been annexed herewith as "Annexure VI" to this
Report.

The details of employee remuneration as required under
Section 197(12) of the Act, read with Rule 5 (2) and 5 (3)

of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and second proviso
to Section 136 of the Act are available for inspection
without any fee, up to the date of the ensuing AGM
and shall also be made available to any Member upon
request. Members seeking to inspect such documents
can send an email to shareholders@spandanasphoorty.
com.

None of these employees is a relative of any Director
of the Company.

20. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE
GOING CONCERN STATUS AND COMPANY'S
OPERATIONS IN FUTURE:

During FY25, there were no significant and material
orders passed by the Regulators or Courts or Tribunals
impacting the going concern status and Company's
operations in future, therefore the disclosure under
Rule 8 (5)(vii) of Companies (Accounts) Rules, 2014, is
not applicable to the Company.

21. DETAILS OF ESTABLISHMENT OF VIGIL
MECHANISM FOR DIRECTORS AND
EMPLOYEES:

The details of Vigil mechanism are covered in the
Corporate Governance Report forming part of this
Report as Annexure VIII.

22. INVESTOR RELATION:

Your Company has set up an Investor Relations
Program through which the Company on a regular
basis keep all its investors updated on all the crucial
information by disseminating the same on the
Company's website. The Company also informs the
National Stock Exchange of India Ltd. (NSE) and BSE
Limited (BSE) regarding earnings call, investors meet,
press release on the financial results of the Company
and such other matters having direct/indirect bearing
on the share price of the Company, in compliance with
the SEBI Listing Regulations.

23. BORROWER GRIEVANCES:

Your Company has a dedicated Borrower Grievance
Cell to receive and handle the day-to-day grievances
of the borrowers. Further, details of the Customer
Support Service, Grievance Redressal Officer of
MFIN (Microfinance Institution Network), Grievance
Redressal Officer of Sa-dhan and Principal Nodal Officer
are also mentioned on the website of the Company,
and a toll-free number is also displayed at every branch
for the borrowers to lodge their complaints, if any. The
borrowers can also directly reach out to the grievance
redressal cell through the tollfree number to raise their
concerns. All the grievances of borrowers are dealt
expeditiously, in a fair and transparent manner.

The Board of Directors have also appointed an Internal
Ombudsman as per RBI notification CO.CEPD.PRS.
NO.S874/13-01-008/2021-2022 dated November 15,
2021.

24. CODE OF CONDUCT FOR INSIDER TRADING:

Your Company has duly formulated and adopted a
Code of Conduct for Prohibition of Insider Trading and
Internal Procedure in accordance with SEBI (Prohibition
of Insider Trading) Regulations, 2015, as amended. The
objective of this Code is to regulate, monitor and report
trading by its Designated Persons and Immediate
Relatives of Designated Persons towards achieving
and protecting the interest of the Stakeholders at large.

This Code of Conduct is available on the Company's
website at https://spandanasphoorty.com/code-of-
conduct.

25. FAIR PRACTICE CODE:

Your Company has duly formulated and adopted
Fair Practice Code (FPC) in compliance with the
guidelines issued by RBI, to deliver quality services
to the borrowers by maintaining highest levels of
transparency and integrity. It also aims to provide
valuable information to the borrowers for making an
informed decision. The FPC (in English, Hindi, Oriya,
Gujarati, Kannada, Bengali, Malayalam, Marathi, Tamil,
Telugu Version) is available on the Company's website
at https://spandanasphoorty.com/code-of-conduct.

26. RISK MANAGEMENT:

Risk management is ingrained in the Company's
operational framework. Proper processes are in place
for risk identification, measurement, reporting and
management. The Company has a Risk Management
Policy, wherein risk management practices are
integrated into governance and operations and has
developed a strong risk culture within the Organization.
Further, the risk management process is continuously
reviewed, improved and adapted in the context of
changing risk scenario and the agility of the risk
management process is monitored and reviewed for
its appropriateness in the changing risk landscape.
The process of continuous evaluation of risks includes
taking stock of the risk landscape on an event-driven
basis. Major risks identified by the businesses and
functions are systematically addressed through
mitigating actions on a continuing basis.

The Board of Directors has constituted Risk
Management Committee to identify, monitor and review
all the elements of risk associated with the Company.
The detail of the Risk Management Committee and
its terms of reference are elaborated in the Report
on Corporate Governance which forms a part of this
Report.

27. DIVIDEND DISTRIBUTION POLICY:

Your Company has formulated a Dividend Distribution
Policy in accordance with SEBI Listing Regulations,
for bringing transparency in the matter of declaration
of dividend and to protect the interest of investors.
The Dividend Distribution Policy is available on the
website of the Company at https://spandanasphoorty.
com/ policies.

28. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS UNDER SECTION 186 OF THE
ACT:

Pursuant to the provisions of Section 186 (11) of the Act,
disclosure requirement w.r.t. particulars of loans given,
investments made or guarantee given or securities
provided is not applicable to the Company.

29. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES:

Your Company has formulated a policy on Related
Party Transactions (RPT Policy) and is available on
Company's website at https://spandanasphoorty.com/
policies .

This Policy deals with the review and approval of
Related Party Transactions. The Board of Directors
of the Company has approved the criteria for granting
the omnibus approval by the Audit Committee within
the overall framework of the RPT Policy. Prior omnibus
approval is obtained for Related Party Transactions
which are of repetitive nature and entered in the
ordinary course of business and on an arm's length
basis.

As per Regulation 23 of the SEBI Listing Regulations,
any transaction with a Related Party shall be
considered material, if the transaction(s) entered into/
to be entered into individually or taken together with the
previous transactions during a financial year, exceeds
'1,000 crore or 10% of annual consolidated turnover
as per the last audited financial statements of the
Company, whichever is lower, and the same requires
prior approval of Members by means of an ordinary
resolution. The said limits are applicable, even if the
transactions are in the ordinary course of business
of the concerned company and undertaken on an
arm's length basis. The annual consolidated turnover
of the Company for the Financial Year 2023- 24 was
'2,533.95 crore and accordingly, the limit applicable
to the Company is ' 253.39 crore ('applicable threshold
for Material RPTs').

Accordingly, during FY25, the Company obtained
approval from the Members of the Company for entering
into certain material Related Party Transactions and
the details of the postal ballot and business transacted
thereto are mentioned in the Corporate Governance
Report forming part of this Report.

There are no materially significant Related Party
Transactions made by the Company with Promoters,
Key Managerial Personnel or other designated persons
which may have potential conflict with interest of the
Company at large. All Related Party Transactions are
placed before the Audit Committee for approval. The
details of the Related Party Transactions are disclosed
as per Indian Accounting Standard (IND AS) - 24 and
set out in the notes to the Financial Statements forming
part of this annual report.

Particulars of contracts/ arrangements with Related
Parties under Section 188 of the Act in Form AOC-2 is
annexed with this report as "Annexure VII".

30. INTERNAL CONTROL SYSTEM AND THEIR
ADEQUACY:

The Company has a sound Internal Control System,
commensurate with the nature, size, scale and
complexity of its operations, which ensures that
transactions are recorded, authorized and reported
correctly. The Company has put in place policies and
procedures for continuously monitoring and ensuring
the orderly and efficient conduct of the business,
including adherence to the Company's Policies, for
safeguarding its assets, the prevention and detection
of frauds and errors, the accuracy and completeness
of the accounting records. The Audit Committee
periodically reviews and evaluates the effectiveness
of internal financial control system.

31. DEBENTURE TRUSTEE:

To protect the Interest of the Debenture Holders of
the Company, your Company has appointed the below
mentioned Debenture Trustees:

Catalyst Trusteeship Limited

Registered Office: GDA House, Plot No. 85, Bhusari

Colony (Right), Paud Road, Pune-411038

Tel: 9122-49220590/ Extn-587/537ComplianceCTL-

Mumbai@ctltrustee.com

Website: www.catalysttrustee.com

32. INFORMATION REQUIRED UNDER SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION & REDRESSAL)
ACT, 2013:

Your Company has constituted an Internal Committee
as required to be formed under Section 4 of the Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and Rules made
thereunder which were notified on December 09, 2013.

The Company has zero tolerance towards sexual
harassment at the workplace and has adopted a
policy on prevention, prohibition and redressal of
sexual harassment at workplace in line with the
provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal)
Act, 2013 and the Rules thereunder. The Company
had also conducted several awareness programs
for the employees during the year. During FY25, two
complaints were received by the Committee under the
aforesaid Act. One was duly closed during the year as
on March 31, 2025, and another was closed during the
month of April 2025. No complaints were pending for
a period more than 90 days. The policy on Prevention
of Sexual Harassment at workplace is available on the
website of the Company at https://spandanasphoorty.
com/policies.

33. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according
to the information and explanations obtained by them,
your Directors make the following statements in terms
of Section 134(3)(c) of the Act:

a. that in the preparation of the annual financial
statements for the financial year ended March
31, 2025; the applicable accounting standards
had been followed along with proper explanation
relating to material departures;

b. that such accounting policies as mentioned in
Note no. 3 of the Notes to the Financial Statements
have been selected and applied consistently and
judgments and estimates have been made that are
reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as
at March 31,2025 and of the profit of the Company
for the year ended on that date;

c. that proper and sufficient care has 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. that the annual financial statements for the
financial year ended March 31, 2025 have been
prepared on a going concern basis;

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

f. 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.

35. APPLICATION UNDER INSOLVENCY AND
BANKRUPTCY CODE, 2016:

The Company has not made any application under the
Insolvency and Bankruptcy Code, 2016 during FY 25.

36. 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:

The Company has not made any such valuation during
the FY 25.

37. OTHER DISCLOSURES:

• The Company has not revised Financial
Statements as mentioned under Section 131 of
the Act during FY25.

• There were no material changes and commitments
affecting the financial position of the Company
which occurred between the end of the financial
year to which these financial statements relate
and the date of this Report.

• During the FY 25, the Company has received
approval from stock exchanges viz.BSE Limited
and National Stock Exchange of India Limited
for reclassification of Ms. Padmaja Gangireddy
and Mr. Vijaya Sivarami Reddy Vendidandi, from
"Promoter" and "Promoter Group" category of
shareholders to 'Public' Category of shareholders.

• Details of Penalty or Strictures are disclosed in
Corporate Governance Report forming part of this
Report.

• There has been no change in the nature of
business of the Company during FY25

• During the FY 25, the Company has complied with
provisions relating to the Maternity Benefit Act
1961.

• Information on Gender Wise Composition of
Employees has been provided in the Business
Responsibility and Sustainability report as
annexed to this report as Annexure-IX.

38. GRATITUDE AND ACKNOWLEDGEMENT:

Your Board expresses its deep sense of gratitude
to the Government of India, Reserve Bank of India,
Stock Exchanges, Depositories and other Regulators
for the valuable guidance and support, the Company
has received from them during the year. The Board
would also like to express its sincere appreciation of
the co-operation and assistance received from its
Stakeholders, Members, Bankers, Service Providers
and other Business Constituents during the year. The
Board places on record its appreciation of the dedicated
services and contributions made by the employees for
the overall performance of the Company.

For & on behalf of the Board of Directors
Spandana Sphoorty Financial Limited

Abanti Mitra Ashish Kumar Damani

Chairperson and Interim Chief Executive Officer,

Independent Director President & Chief Financial

DIN: 02305893 Officer

Place: Mumbai Place: Hyderabad

^{Date: August 8}, ²⁰²⁵ Date: August 8, 2025