Bajaj Housing Finance Ltd. के निदेशक की रिपोर्ट

Mar 31, 2026

Your directors present the 18^th Annual Report along with the financial statements for Financial Year
2025-26 (or ''FY2026).

Company Overview

Bajaj Housing Finance Limited (''BHFL'' or ''the Company) is registered with National Housing Bank (''NHB) as a
non-deposit taking Housing Finance Company (''HFC) engaged in the business of mortgage lending since July
2017. The Company is a subsidiary of Bajaj Finance Limited (''BFL''/''Holding Company).

The Company offers financial solutions tailored to individuals and corporate entities for the purchase and
renovation of homes and commercial spaces. The Company''s mortgage product suite is comprehensive and
comprises () home loans; (ii) loans against property; (ii) lease rental discounting; (iv) developer financing and
(v) others, covering non-collateralized loans. The financial products offered by the Company caters to every
customer segment, from individual homebuyers to large-scale developers/HNIs.

BHFL is also a registered intermediary within the meaning of Insurance Regulatory and Development Authority
of India (''IRDAI) as a corporate agent.

The Company is classified as an Upper Layer NBFC by the Reserve Bank of India (''RBI). The Company''s
equity shares got listed on National Stock Exchange of India Limited (''NSE) and BSE Limited (''BSE) on
16 September 2024.

Financial results

The key highlights of the financial results for FY2026 are given below:

Particulars	FY2026	FY2025	% change over FY2025
Total income	11,151	9,554	17%
Finance Cost	6,760	5,979	13%
Net total income	4,391	3,575	23%
Total operating expenses	867	747	16%
Pre-provisioning operating profit	3,524	2,828	25%
Impairment on financial instruments	191	58	229%
Profit before exceptional items and tax	3,333	2,770	20%
Exceptional items	13	-
Profit before tax (PBT)	3,320	2,770	20%
Profit after tax (PAT)	2,560	2,163	18%
Retained earnings as at the beginning of the year	5,448	3,719	46%
Profit after tax	2,560	2,163	18%
Other comprehensive income		(1)	(101)%
Retained earnings before appropriations	8,009	5,881	36%
Appropriations
Transfer to reserve fund u/s 29C of the NHB Act, 1987	512	433	18%
Retained earnings as at the end of the year	7,496	5,448	38%

By virtue of rounding off, numbers presented in above table may not add up precisely to the totals provided.

Working results of the Company

• Asset Under Management (''AUM'') as on 31 March 2026 was H 1,40,706 crore as compared to H 1,14,684
crore as on 31 March 2025, representing an increase of 23% over the previous year.

• Loan receivables as on 31 March 2026 was H 1,23,745 crore as compared to H 99,513 crore as on
31 March 2025, an increase of 24% over the previous year.

• Total income during FY2026 increased to H 11,151 crore from H 9,554 crore during FY2025 registering a
growth of 17% over the previous year.

• Operating cost to net total income in FY2026 decreased by 120 basis points to 19.7% from 20.9% in FY2025.

• Impairment on financial instruments was H 191 crore. The Company holds macro-economic overlay of
H 29 crore as at 31 March 2026.

• The Company ended FY2026 with a Gross NPA of 0.27% and Net NPA of 0.11% as against 0.29% and 0.11%
for FY2025.

• Profit before tax for FY2026 was H 3,320 crore as against H 2,770 crore for FY2025, an increase of 20% over
the previous year. This is mainly due to the Company''s healthy net interest margin, operating efficiencies and
prudent risk management.

• The profit after tax for FY2026 was H 2,560 crore as compared to H 2,163 crore for FY2025, an increase of
18% over the previous year.

Transfer to Reserve Fund

Under Section 29C of the National Housing Bank Act, 1987, Housing Finance Companies (''HFCs'') are required
to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any
dividend. Accordingly, the Company has transferred a sum of H 512.07 crore to reserve fund, being 20% of its
net profit.

Pursuant to Section 71 of Companies Act, 2013 (the ''Act'') read with Rule 18 of the Companies (share capital
and debentures) Rules, 2014, the Company, being an HFC, is exempt from creating a debenture redemption
reserve in respect of privately placed debentures including the requirement to invest up to 15% of the amount
of debentures maturing during the next financial year. However, the Company maintains sufficient liquidity
buffer to fulfil its obligations arising out of debentures. In case of secured debentures, an asset cover of at least
100% is maintained at all times.

Minimum Public Shareholding

• The promoter of the Company i.e., Bajaj Finance Limited on 2 December 2025 sold 16.66 crore equity shares
of the Company representing ~2% of its equity share capital through open market mechanism by executing

a bulk deal in a secondary market, which is one of the methods provided under the SEBI Master Circular for
achieving Minimum Public Shareholding. Accordingly, the promoter holding stand reduced from 88.70% to
86.70%.

• SEBI vide Securities Contracts (Regulation) Amendment Rules, 2026 dated 13 March 2026 has extended the
timeline for complying with the Minimum Public Shareholding by revising the market capitalization thresholds
at the offer price. The Company has now an additional timeline of 2 years for complying with the Minimum
Public Shareholding i.e., till 15 September 2029.

Share capital

During FY2026, the Company issued and allotted 41,87,918 equity shares of the face value of H 10/- each at
grant price of H 54.5/- per equity share (including a share premium of H 44.5/- per equity share) to the Bajaj
Housing Finance ESOP Trust under the Bajaj Housing Finance Limited Employee Stock Option Scheme, 2024.

Pursuant to the aforesaid allotment of equity shares, the issued, subscribed and paid-up capital of the
Company stands increased to H 8,332.33 crore (833,23,34,619 Equity shares of H 10/- each).

During FY2026, the Company has not issued any convertible securities and there are no outstanding
convertible securities as on 31 March 2026.

Borrowings

The shareholders have approved an overall borrowing limit of H 1,50,000 crore. The outstanding borrowings as
on 31 March 2026 were H 1,03,703.99 crore as compared to H 82,071.92 crore as on 31 March 2025.

During FY2026, the Company raised fresh borrowings aggregating to a face value of H 49,767.24 crore
(excluding CC/WCDL/TREPS) from various sources, including refinance from the National Housing Bank
(''NHB''). The composition of the overall borrowings as on 31 March 2026 is set out below:

As per the Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management)

Directions, 2025, as amended from time to time, the Company is required to maintain a minimum Liquidity
Coverage Ratio (''LCR'') of 100%. The Company''s average daily LCR during Q4 stood at 146.10%, and the LCR as
on 31 March 2026 was 152.52%.

Dividend

Pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the ''SEBI Listing Regulations'') and in accordance with the
RBI guidelines, the Company has in place a dividend distribution policy, which sets out the parameters and
circumstances to be considered by the Board of Directors (''Board'') in determining the distribution of dividend
to its shareholders and/or retaining profit earned.

Further, during FY2026, the Company revised its Dividend Distribution Policy to incorporate a clause providing
for the exclusion of any exceptional or extraordinary income, as well as any portion of net profit affected by
statutory auditors'' qualifications, while computing the dividend payout ratio.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Dividend-Distribution-Policy.pdf.

Considering the capital-intensive nature of the business, the business growth plan of the Company and with a
view to plough back profits, your Board has not recommended any dividend for consideration of its members at
the ensuing Annual General Meeting to build a strong base for long-term sustainable growth.

Annual Return

The Annual Return as provided under Section 92(3) of the Act, in the prescribed form is available on the
website of the Company and can be accessed athttps://www.bajajhousingfinance.in/annual-reports.

Number of Meetings of the Board

Six (6) meetings of the Board were held during FY2026. Details of the meetings and attendance thereat forms
part of the Report on Corporate Governance. The gap between two consecutive meetings was less than one
hundred and twenty days.

Declaration by Independent Directors

All the Independent Directors have submitted a declaration of independence, stating that they meet the
criteria of independence provided under Section 149(6) of the Act read with Regulation 16 of the SEBI
Listing Regulations, as amended. They also confirmed compliance with the provisions of Rule 6 of Companies
(Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in
the databank of Independent Directors.

The Board took on record the declaration and confirmation submitted by the Independent Directors regarding
them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the
same in terms of the requirements of Regulation 25 of the SEBI Listing Regulations.

In the opinion of the Board, the Independent Directors fulfil the conditions specified in the Act read with rules
made thereunder and have complied with the code for Independent Directors prescribed in Schedule IV to
the Act.

Meeting of Independent Directors

Pursuant to Act and SEBI Listing Regulations, the Independent Directors must hold at least one meeting in a
financial year without attendance of Non-Independent Directors and members of the Management. Accordingly,
Independent Directors of the Company met on 17 March 2026 and:

• noted the report of performance evaluation of the Board and Committees for the year 2025-26;

• reviewed the performance of Non-Independent Directors and the Board as a whole;

• reviewed the performance of the Chairman of the Board taking into account the views of executive and
non-executive directors; and

• assessed the quality, quantity and timeliness of flow of information between the Company''s Management
and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Suggestions of the Independent Directors were noted by the Board.

In addition, the Independent Directors have a separate meeting with the Senior Management Team (''SMTs''),
during which, the SMTs are encouraged to express their views and concerns pertaining to the business.
Suggestions from the directors were noted by the Management.

Directors and Key Managerial Personnel (''KMP'')

A. Change in Directors:

i. Re-appointment of Anami N Roy (DIN: 01361110)

The Members vide special resolutions passed through postal ballot on 7 May 2025, approved the
continuation of Anami N Roy as an Independent Director beyond the age of 75 years for his first tenure.
They have also approved his re-appointment as an Independent Director for a second term of three
consecutive years, commencing from 19 May 2025. The Board is of the opinion that Anami N Roy is a
person of integrity, expertise, and competent experience and proficiency to serve the Company as an
Independent Director.

ii. Appointment of Ajay Kumar Choudhary (DIN: 09498080)

On recommendation of the Nomination and Remuneration Committee (''NRC''), the Board has appointed
Ajay Kumar Choudhary as a Non-Executive Independent Director of the Company for a term of five
consecutive years effective 1 March 2026. Members through special resolution passed by postal ballot
on 11 April 2026, approved the appointment of Ajay Kumar Choudhary as a Non-Executive Independent
Director for a term of five consecutive years effective 1 March 2026.

The Board is of the opinion that Ajay Kumar Choudhary is a person of integrity and possesses relevant
expertise & experience and proficiency to serve the Company as an Independent Director that can
strengthen the overall composition of the Board.

Pursuant to the provisions of Rule 6(4) (c) of the Companies (Appointment and Qualifications of Directors)
Rules, 2014, as amended, Ajay Kumar Choudhary is exempted from completion of online proficiency
self-assessment test.

B. Directors liable for rotation:

Rajeev Jain, (DIN: 01550158) retires by rotation at the ensuing Annual General Meeting (''AGM''), and being
eligible, offers himself for re-appointment.

Brief details of Rajeev Jain are given in the Notice of 18^th AGM.

C. Key Managerial Personnel (KMP):

During FY2026, there was no change in the KMP.

Remuneration Policies

A. Policy on Directors'' Appointment and Remuneration

Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule
II of the SEBI Listing Regulations, the Board has framed a Remuneration Policy. This policy, inter alia,
lays down:

a) The criteria for determining qualifications, positive attributes and independence of directors; and

b) Broad guidelines of compensation philosophy and structure for Non-Executive Directors, key
managerial personnel and other employees.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Remuneration-Policy.pdf.

During FY2026, there were no pecuniary relationship/transactions of any of the Non-Executive Directors
with the Company apart from sitting fees and commission, payable to them as directors.

Hitherto, the Company has not paid any commission and sitting fees to its Independent Directors for
attending separate meeting of Independent Directors. Considering the value addition from these meetings
to Management and the Board as a whole, the Board has approved the payment of sitting fees of
H 1,00,000 and commission of H 2,00,000 per meeting, for separate meetings of Independent Directors.

B. Policy for Compensation of Key Managerial Personnel (''KMP'') and Senior Management Team
(''SMT'') pursuant to the RBI Guidelines

Pursuant to Reserve Bank of India (Non-Banking Financial Companies - Governance) Directions dated
28 November 2025, issued in supersession of RBI guidelines on Compensation of Key Managerial Personnel
and Senior Management in NBFCs dated 29 April 2022, the Company has in place a Board approved policy
exclusively governing compensation payable to KMP and SMT. This policy lays down detailed framework,
inter alia, encompassing the following:

• Principles of compensation;

• Compensation components;

• Principles of variable pay;

• Deferral of variable pay;

• Compensation for control and assurance function personnel; and

• Provisions for malus and clawback and circumstances under which application of malus and clawback is
to be considered.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Remuneration-Policy-RBI.pdf.

Particulars of Loans, Guarantees and Investments

The Company, being a HFC registered with the NHB and engaged in the business of providing loans in ordinary
course of its business, is exempt from complying with the provisions of Section 186 of the Companies Act,

2013, with respect to loans. Accordingly, the Company is exempted from complying with the requirements to
disclose in the financial statement the full particulars of the loans given, investment made, guarantee given, or
security provided.

Related Party Transactions

All contracts/arrangement/transactions entered by the Company during FY2026 with related parties
were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Approval of the
Audit Committee was obtained for all related party transactions entered during FY2026 as per SEBI Listing
Regulations. Such transactions are reviewed by the Audit Committee on a quarterly basis.

The Company had engaged an independent law firm to review the transactions carried out with related parties
during FY2026, to affirm that the transactions were entered into on an arm''s length basis. The said firm, based
on its review performed every quarter, has concluded that the aforementioned transactions were entered into
on an arm''s length basis.

Pursuant to Regulation 23(4) of the SEBI Listing Regulations, 2015, all material related party transactions and
subsequent material modification as defined in the policy on materiality of related party transaction shall require
prior approval of the shareholders through resolution and no related party shall vote to approve such resolutions
whether the entity is a related party to the particular transaction or not.

Approval of shareholders was obtained at the last AGM held on 23 July 2025 for transactions with Bajaj Finance
Limited (Holding Company) for an aggregate amount of H 12,612 crore for the period from the date of 17^th AGM
up to the date of 18^th AGM of the Company.

A transaction with a related party is considered material, if the transaction(s) to be entered into individually
or taken together with previous transactions during a financial year, exceeds the thresholds as per Regulation
23(1) of SEBI Listing Regulations, 2015. With effect from 19 December 2025, SEBI has revised the criteria for
determination of material related party transactions. Accordingly, a transaction with a related party shall be
considered material if the transaction(s), individually or taken together with previous transactions during a
financial year, exceeds the thresholds specified in Schedule XII of the said Regulations.

Details of transactions with related parties during FY2026 are provided in the notes to the financial statements.
Also, details of transactions with related parties during FY2026 as reported to the stock exchanges in
the prescribed format is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/financial-information.

Accordingly, the Company proposes to seek approval of the shareholders at the upcoming AGM for material
related party transaction with Bajaj Finance Limited, as under:

Material Related Party Transactions with Bajaj Finance Limited

Particulars	Amount
Transfer/sale of loans or loan pools by way of assignment and servicing arrangements	12,550
Availing of loans or advances, credit facilities, or any other form of fund-based facilities	2,500
Down-sell/Consortium Lending/Novation of Loans	3,039
Charges for inter-company services rendered between the Company and BFL	42
Sourcing of products by the Company and BFL	21
Total	18,152

Further details are provided in the Notice of the 18^th AGM.

There were no contracts or arrangements entered under Section 188(1) of the Act. Accordingly, the disclosure
of Related Party Transactions as required under Section 134(3) (h) of the Act in Form AOC-2 is not applicable to
the Company for FY2026 and hence, does not form part of this Report.

Material Changes and Commitments

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

Conservation of Energy

Though the operations of the Company are not energy intensive, the Company implements various energy
conservation measures across all its functions, vertical and value chain partners. Key initiatives of the Company
include the following:

• Energy-efficient LED lights are installed across all offices;

• Selecting and designing offices to facilitate maximum natural light utilization;

• Use of cloud based virtual servers to increase energy efficiency and data security; and

• The Company has adopted strategy to minimize usage of non-production workload during night hours which
helps in cost optimization and reduce greenhouse effect.

Technology Absorption

The Company leverages technology across its acquisition and servicing lifecycle. It hosted its enterprise
IT ecosystem on cloud, enabling a flexible architecture for business applications, data warehousing, and
analytics. This cloud-native foundation supports improved performance, scalability, cost efficiency, and
security. The Company has also enhanced its web-based application stack to ensure compatibility across
devices, enabling mobility, and has implemented API gateways to facilitate seamless integration.

The Company continues to adopt Artificial Intelligence (''AI) to strengthen customer service and other areas
with potential of significant impact. BHFL is further reinforcing its information security posture through
expanded attack-surface monitoring, process refinement, and proactive remediation of identified gaps. Security
solutions and controls-including VAPT, cloud architecture reviews, managed endpoint detection & response
(''MDR''), and PII data masking-have been implemented to enhance security and strengthen customer data
protection. The Company has also improved productivity in business operations and customer service by
leveraging robotic process automation (''RPA'') and AI along with machine learning (''ML).

Foreign Exchange Earnings and Outgo

During FY2026, the Company did not have any foreign exchange earnings in terms of actual inflow and the
foreign exchange outgo in terms of actual outflow amounted to H 0.31 crore.

Composition of Committees

The details of all the Board Committees including composition, attendance, terms of reference, etc, are provided
under Report on Corporate Governance. Pursuant to Section 177 and Section 135 of Companies Act, 2013, the
composition of Audit Committee and Corporate Social Responsibility committee are provided hereunder:

Audit Committee

The composition as on 31 March 2026, comprises of Anami N Roy (Chairman) (DIN: 01361110), Dr. Arindam
Bhattacharya (DIN: 01570746), Jasmine Chaney (DIN: 07082359), S M N Swamy (DIN: 10367727) and Rajeev
Jain (DIN: 01550158).

Further details on Audit Committee, brief terms of reference and attendance record of members are given in
the Report on Corporate Governance.

During FY2026, all recommendations of the Audit Committee were accepted by the Board.

Corporate Social Responsibility (''CSR'')

The composition as on 31 March 2026, comprises of Anami N Roy (Chairman) (DIN: 01361110), Sanjiv Bajaj
(DIN: 00014615) and Rajeev Jain (DIN: 01550158).

The CSR policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/CSR-Policy.pdf.

Pursuant to Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual Report on
CSR activities is annexed to this Report.

Further, the Company has met the CSR obligation, and no CSR amount remains unspent for FY2026.

Risk Management Framework

The Board of Directors have adopted a Risk Management Policy for the Company which provides for
identification of key events/risks impacting the business objectives of the Company and attempts to develop
risk policies and strategies to ensure timely evaluation, reporting and monitoring of key business risks.

This framework, inter alia, provides the set of components that provide the foundations and organisational
arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management
throughout the organisation. It covers principles of risk management, risk governance with roles and
responsibilities, business control measures, principle risks and business continuity plan. The Management
identifies and controls risks through a defined framework in terms of the aforesaid policy.

The Company has in place Operational Risk Management (''ORM) framework which enables systematic
identification, assessment, measurement, monitoring, mitigation and reporting of operational risks. This is
achieved through determining key process areas, converting them to measurable and quantifiable metrics
(KRI''s), setting thresholds for KRI''s, monitoring and reporting on breaches of the threshold levels. Corrective
actions are initiated, to bring back the breached metrics within their acceptable thresholds by conducting the
root cause analysis to identify the failure of underlying process, people, systems, or external events, if any. It
also establishes governance mechanisms, defined roles and responsibilities, and risk monitoring tools to support
effective oversight. A management level Operational Risk Management Committee (''ORMC) has also been put
in place to oversee implementation of the ORM framework.

The Board is of the opinion that there are no elements of risk that may threaten the existence of the Company.

As per the Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management) Directions,
2025, all non- deposit taking HFCs with asset size of more than H 100 crore shall pursue liquidity risk
management which, inter alia, should cover adherence to gap limits. The Board has in place a Liquidity Risk
Management framework encompassing, inter alia, strategies and practices, internal controls, maturity profiling,
liquidity coverage ratios and high-quality liquid assets.

Pursuant to the Reserve Bank of India (Housing Finance Companies) Directions, 2025, HFCs shall comply
with the directions for Internal Capital Adequacy Assessment Process (''ICAAP'') as prescribed in paragraph
54 of the Reserve Bank of India (Non-Banking Financial Companies - Prudential Norms on Capital Adequacy)
Directions, 2025.

The Company has an ICAAP policy in place. The policy is developed considering the requirements as per the
RBI Directions and is based on the Pillar -2 requirements under Basel III Framework developed by the Basel
Committee on Banking Supervision (''BCBS). Accordingly, the Company has also framed ICAAP with an
objective to ensure availability of adequate capital to support all risks in business as also to develop and use
better internal risk management techniques for monitoring and managing risks.

The objective of the policy is to provide an ongoing assessment of the Company''s entire spectrum of risks and
the methodology to assess current and future capital, reckoning other mitigating factors and to assist and
apprise the Board on these aspects and on Company''s ICAAP and Company''s approach to capital management.

In terms of the RBI Directions, the Committee also has an independent meeting with the Chief Risk Officer
without the presence of management.

Further details on the Risk Management Committee, brief terms of reference and attendance record of
members are given in the Report on Corporate Governance.

More detailed discussion on the Company''s risk management and portfolio quality is covered in the
Management Discussion and Analysis.

Fraud monitoring and reporting

The Reserve Bank of India vide Master Directions on Fraud Risk Management in Non-Banking Financial
Companies (''NBFCs) (including Housing Finance Companies) dated 15 July 2024 issued directions on
fraud risk management. Pursuant to the RBI Directions, the Company has adopted comprehensive Fraud Risk
Management Policy covering aspects viz, measure towards fraud prevention, fraud detection, investigation,
staff accountability, monitoring of frauds, recovery of frauds, reporting of frauds and roles & responsibilities of
Board/Board Committees and Senior Management.

Further, a Special Committee of the Board is formed for Monitoring and Follow-up of cases of Frauds (''SCBMF'')
to oversee the effectiveness of fraud risk management. The SCBMF committee reviews and monitor cases of
frauds, including root cause analysis, and suggests mitigating measures for strengthening the internal controls,
risk management framework and minimizing the incidence of frauds.

The Company also has in place a senior management Early Warning Signal Committee for review and
implementation of a robust framework for Early Warning Signal. During the year under review, no instances of
fraud have been committed against the Company by officers or employees.

The Company has a comprehensive Risk Containment Unit infrastructure. The risk containment unit, through
prevention and deterrence actions, is responsible for preventing fraud perpetrated by customers, sourcing
channels and employees either alone or in connivance with others. It ensures that most fraud checks
are performed well before any disbursal of loan through fraud controls/checks built in its loan origination
systems & processes.

Formal annual evaluation of the performance of the Board, its Committees and Directors

Pursuant to Section 178 of the Act, the NRC and the Board have decided that the evaluation shall be carried out
only by the Board and the NRC will only review its implementation and compliance.

Further as per Schedule IV of the Act and provisions of the SEBI Listing Regulations, the performance
evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director
being evaluated, based on performance and fulfillment of criteria of independence and their independence
from management.

Based on the report of the performance evaluation, it shall be determined whether to extend or continue the
term of appointment of Independent Director.

Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its
Committees, Chairperson and Individual Directors.

The manner in which formal annual evaluation of performance was carried out by the Board for the year
2025-26 is given below:

• Based on the criteria approved by the Board, a questionnaire-cum-rating sheet was circulated for seeking
feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and
individual directors.

• From the individual ratings received from the directors, a report on summary of ratings in respect of
performance evaluation of the Board, its Committees, Chairperson and individual directors for the year
2025-26 and a consolidated report thereof arrived at.

• The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on
17 March 2026.

• The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting
held on 17 March 2026.

• Based on the report and evaluation, the NRC and Board at their above-mentioned meetings, determined that
the appointment of all Independent Directors may continue.

• Details on the evaluation of Board, Non-Independent Directors and Chairperson of the Company, carried
out by the Independent Directors at their separate meeting held on 17 March 2026 have been furnished in a
separate paragraph elsewhere in this report.

• During the year under review, the process followed by the Company was reviewed by the NRC, which opined
these to be in compliance with the applicable provisions and found it to be satisfactory.

• The evaluation criteria for Independent Directors as required under Chapter VI - D of the SEBI Master Circular
dated 30 January 2026 is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Performance-Evaluation-Criteria.pdf.

Other than the Chairman of the Board and NRC, no other Director has access to the individual ratings given
by directors.

Subsidiaries, Associates and Joint Ventures

The Company does not have any subsidiaries, associates, or joint ventures. Accordingly, the requirement of
attaching Form AOC-1 is not applicable to the Company.

The Company''s policy for determination of material subsidiary, as adopted by the Board of Directors, in
conformity with Regulation 16 of the SEBI Listing Regulations, is available on the website of the Company and
can be accessed athttps://www.bajajhousingfinance.in/Policy-for-determining-material-subsidiaries.pdf.

As per Regulation 16(1) (c) of SEBI Listing Regulations, a Company, whose turnover or net worth exceeds
ten percent of the consolidated turnover or net worth respectively, of its holding Company in the immediately
preceding accounting year, is deemed to be its material subsidiary.

For FY2026, the Company continues to be classified as material subsidiary of Bajaj Finance Limited (''BFL''), the
Holding Company, and Bajaj Finserv Limited (''BFS''), the ultimate Holding Company.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During FY2026, 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.

Internal Financial Controls

Internal Financial Controls laid down by the Company is a systematic set of controls and procedures to ensure
orderly and efficient conduct of its business including adherence to the Company''s policies, safeguarding of its
assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records
and timely preparation of reliable financial information. Internal financial controls not only require the system to
be designed effectively but also to be tested for operating effectiveness periodically.

The Audit Committee and Board is of the opinion that internal financial controls with reference to the financial
statements are adequate and operating effectively. The internal financial controls are commensurate with the
size, scale, and complexity of operations.

Internal Control Systems and their adequacy have been discussed in more detail in Management Discussion
and Analysis.

Whistle-Blower Policy/ Vigil Mechanism

The Company has a Whistle-blower Policy encompassing vigil mechanism pursuant to the requirements of the
Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations and Regulation 9A of the SEBI
(Prohibition of Insider Trading) Regulations, 2015.

The whistle-blower framework has been introduced with an aim to provide employees, directors and value
chain partners with a safe and confidential channel to share their input about such aspects which are
adversely impacting their work environment. The policy/vigil mechanism also enables directors, employees
and value chain partners to report their concerns about unethical behaviour, actual or suspected fraud or
violation of the Company''s code of conduct or ethics policy and leak or suspected leak of unpublished price
sensitive information.

The concerns may be reported anonymously either through e-mail or through a ''Confidential Feedback
Mechanism'', which is reviewed by a Whistle-Blower Committee comprising of senior management from within
and outside the organisation. Pursuant to the Whistle-Blower Policy, the summary of incidents investigated,
actioned upon, founded and unfounded are reviewed by the Audit Committee on a quarterly basis. In addition,
the Committee conducts an annual review of the effectiveness and functioning of the vigil mechanism/
Whistle-Blower Policy. The Policy provides safeguards against victimization of directors, employees and value
chain partners who utilize the mechanism and enables direct access to the Chairperson of the Audit Committee
by writing to[email protected].

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Vigil-Mechanism-Policy.pdf.

Employees of the Company are required to undergo mandatory online learning module on code of conduct
which includes whistle-blower policy and affirm that they have understood and are aware of vital aspects
of the Policy.

During FY2026, no person was denied access to the Audit Committee or its Chairperson under this policy
and two complaints were received under the whistleblower mechanism of the Company which have been
investigated and addressed as per the policy of the Company.

Employee Stock Options (''ESOPs'')

With a view to maintain a right balance between fixed pay, short-term incentives and long-term incentives and
to effectively align with the risk considerations and build focus on consistent long-term results, the Company
has formulated an Employee Stock Option Scheme in accordance with the Securities and Exchange Board of
India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''SEBI SBEB Regulations'').

Bajaj Housing Finance Limited Employee Stock Option Scheme, 2024 is in compliance with the SEBI SBEB
Regulations and there were no changes in the scheme during the year. The same is available on the website
of the Company and can be accessed athttps://www.bajajhousingfinance.in/Employee-Stock-Option-
Scheme-2024.pdf. No acquisition has been undertaken by the trust through the secondary market route.

The Company follows an annual appraisal process of its employees. Various factors such as past year''s
performance, grade of the employee, length of service, role and overall contribution, the performance of
business/function to which the employee belongs, merits of the employee, future potential contribution by
the employee and/or such other similar factors would be considered by the Compensation Committee while
approving the grant of options.

A certificate obtained from the Secretarial Auditors confirming that the scheme has been implemented in
accordance with the aforesaid regulations and the shareholders'' resolution shall be placed before the Members
at the ensuing Annual General Meeting.

A statement giving details as at 31 March 2026, under Regulation 14 of the SEBI SBEB Regulations, and Rule
12(9) of Companies (Share Capital and Debentures) Rules, 2014 are available on the website of the Company
and can be accessed athttps://www.bajajhousingfinance.in/annual-reports.

Grant wise details of options vested, exercised, and cancelled are provided in the notes to the financial
statements. The Company has not issued any sweat equity shares or equity shares with differential voting
rights during FY2026.

Business Responsibility and Sustainability Report (''BRSR'')

Pursuant to the SEBI circular dated 10 May 2021 read with the SEBI Listing Regulations, as amended from time
to time, top 1,000 listed entities based on market capitalization are required to submit Business Responsibility
and Sustainability report with effect from FY2023.

SEBI has further introduced BRSR Core, a focused sub-set of the BRSR, comprising Key Performance Indicators
(''KPIs'') across nine Environmental, Social, and Governance (''ESG'') attributes. As per the glide path outlined
in the circular, the top 500 listed entities are mandated to obtain reasonable assurance on the BRSR Core
disclosures. In compliance with the SEBI requirements, the Company has appointed SGS India Private Limited.
(''SGS'') as an Assurance provider for carrying out the Reasonable Assurance for BRSR Core and Limited
Assurance for the remaining BRSR disclosures, in alignment with the SEBI''s requirements, for FY2026.

The Company has in place an executive level cross functional ESG Committee headed by the Managing
Director. The Committee chalks out plans and other initiatives, keeping in view the leading practices and the
requirements. It also monitors the implementation of ESG related initiatives and reporting thereof. The BRSR
in the updated format (including KPIs of BRSR Core) prescribed by the SEBI is annexed to the Annual Report.

A detailed ESG Report describing various initiatives, actions, and process of the Company towards the ESG
endeavor is available on the website of the Company and can be accessed athttps://www.bajajhousingfinance.
in/annual-reports.

Corporate Governance

In terms of the SEBI Listing Regulations, a separate section titled Report on Corporate Governance has
been included in this Annual Report, along with the Management Discussion and Analysis and General
Shareholder Information.

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

A certificate from Secretarial auditor of the Company regarding compliance of conditions of corporate
governance is annexed to this Report and it does not have any observations.

Secretarial Standards of ICSI

The Company has followed the applicable Secretarial Standards with respect to meetings of the Board of
Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

Statutory Audit

Mukund M. Chitale & Co., Chartered Accountants (Firm Registration No. 106655W) and Singhi & Co., Chartered
Accountants (Firm Registration No. 302049E), the Joint Statutory Auditors of the Company have conducted
audit of the financial statements of the Company for the FY2026.

The Audit Report given by the Joint Statutory Auditors for FY2026 is unmodified, i.e., it does not contain any
qualification, reservation, adverse remark or disclaimer.

The statutory auditors have not reported any matter under Section 143(12) of the Act, and therefore, no details
are required to be disclosed under Section 134(3) (ca) of the Act.

In terms of the RBI Directions, the Joint Statutory Auditors have also submitted an additional Report dated
27 April 2026, for FY2026. There were no comments or adverse remarks in the said Report as well.

Secretarial Audit

Pursuant to Regulation 24A(1) of the SEBI Listing Regulations, the Members at the 17^th Annual General
Meeting held on 23 July 2025, approved the appointment of DVD & Associates, (Firm Registration No.
S2016MH35900D), a peer reviewed firm of Company Secretaries in Practice as the Secretarial Auditor of the
Company for a term of 5 (five) consecutive years from FY2026 till FY2030.

Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, and Regulation 24A (1) of the SEBI Listing Regulations, the secretarial audit
for FY2026 was conducted by DVD & Associates. The Secretarial Audit report in the prescribed Form MR-3 is
annexed to this Report. The report is unmodified i.e., it does not contain any qualification, reservation, adverse
remark or disclaimer.

The secretarial auditor has not reported any matter under Section 143(12) of the Act, and therefore, no details
are required to be disclosed under Section 134(3) (ca) of the Act.

Pursuant to Regulation 24A(2) of SEBI Listing Regulations, a report on secretarial compliance for FY2026
has been issued by DVD & Associates, Practicing Company Secretaries and the same will be submitted with
the stock exchanges within the given timeframe. The report will also be made available on the website of
the Company.

Internal Audit

Internal Audit function provides an independent view to the Audit Committee on the quality and efficacy of
internal controls, governance systems and processes.

In line with the RBI''s guidelines on Risk Based Internal Audit, the Company has adopted a Risk Based Internal
Audit policy.

The Internal Audit provides assurance to the Audit Committee / Board of Directors and Senior Management
on quality and effectiveness of the internal controls, and governance related systems and processes. The
concurrent review process has been strengthened for all products covering underwriting, collateral and
operations to mitigate transaction risk.

At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. The
Audit Committee regularly reviews the internal audit reports along with the corrective and preventive actions
thereon. Significant audit observations, corrective and preventive actions thereon are presented to the Audit
Committee on a quarterly basis. The Committee also reviews adequacy and effectiveness of internal controls
based on such reports.

The Audit Committee independently meets the internal auditor every quarter without the presence of
management. As per the RBI guidelines, quality assurance and improvement program (''QAIP'') is required to
be carried out at least once a year covering all aspects of internal audit function. Accordingly, QAIP was carried
out by an external agency for FY2025 to assess functioning of the internal audit function, adherence to the
internal audit policy, objectives and expected outcomes. Similarly, QAIP for FY2026 will be carried out by an
external agency.

Information System Audit

In terms of the RBI Master Direction on Information Technology Governance, Risk, Controls and Assurance
Practices dated 7 November 2023, the Company is required to put in place IS Audit Policy which shall inter alia
contain a clear description of its mandate, purpose, authority, audit universe, periodicity of audit etc.

During the year under review, an IT system audit was conducted by a CERT-in empaneled audit firm.

The areas audited were IT General Controls, Cyber Security Controls and Information Security Controls as per
the regulatory framework applicable to the Company.

Necessary continuous improvement actions have been taken in line with the audit observations.

The 2^nd surveillance audit under the ISO 27001:2022 standard was conducted by BSI, and the overall outcome
of the audit was found to be satisfactory.

Information Technology Governance, Business Continuity, Cyber Security and IT
Infrastructure

The Reserve Bank of India (''RBI) issued the Master Direction on Information Technology Governance, Risk,
Controls and Assurance Practices dated 7 November 2023, effective 1 April 2024. In line with these Directions,
the Company revised the Terms of Reference of the IT Strategy Committee during the year, which, interalia,
includes annual review of the adequacy and effectiveness of Business Continuity Planning (''BCP) and Disaster
Recovery (''DR'') management, review of IT capacity assessments and mitigation measures, approval of
documented standards for access to information assets, and constitution of an Information Security Committee
(''ISC) comprising the Chief Information Security Officer (''CISO) and representatives from business and
other functions.

Pursuant to the directions, the CISO is responsible for driving the cyber security strategy and ensuring
compliance with applicable regulatory/statutory requirements on information/cyber security. The Company
has implemented an IT governance policy framework, including the Business Continuity Policy, Information
Security Policy, Information Technology Policy, Cyber Security Policy, IT Outsourcing Policy, Cyber Crisis
Management Plan, Information Security Incident Management Policy, Access Management Policy, and Change
Management Policy.

The IT Strategy Committee is supported by the IT Steering Committee and the ISC comprising senior
executives. The IT Steering Committee supports strategic IT planning, oversight of IT performance, and
alignment of IT initiatives with business objectives, including implementation of robust IT architecture and
compliance with statutory and regulatory requirements. The ISC oversees cyber and information security under
the IT Strategy Committee, comprising the CISO and representatives from business, finance and IT functions,
and is headed by personnel from the risk management function.

To further strengthen secure remote working, the Company implemented Zero Trust Network and VPN
capabilities and deployed Network Access Control across LAN and Wi Fi. Privileged access controls enable
secure remote support for identified partners. The cloud infrastructure includes DR capabilities; DR drills are
conducted twice a year, and periodic backup restoration exercises are performed. While Senior management
laptops are backed up, all laptop disks are encrypted, and security logs are monitored 24x7 by the Security
Operations Center (''SOC).

During the year, the Board was apprised of cyber security developments and incident trends, and
Directors & Senior Management underwent annual IT security training. The Company has also adopted
measures to minimize non production workload during night hours to support cost optimization and reduce
greenhouse effects.

Customer Engagement

Customer engagement and experience are core pillars of our organisation, and we are dedicated to
upholding customer fairness in both letter and spirit across all our actions. Proactive engagement empowers
institutions to gain meaningful insights, manage risks effectively, ensure compliance, and seamlessly adopt
new technologies.

The Company maintains a robust grievance redressal framework with defined turnaround timelines and a
structured escalation matrix. Leveraging Machine Learning-based sentiment analysis and advanced analytics,
we prioritize and categorize customer queries for faster, personalized resolution. Straight-through processing
capabilities and data-driven insights enhance efficiency while enabling proactive engagement, portfolio
segmentation, and tailored financial solutions to strengthen long-term relationships.

Service quality is continuously monitored through structured feedback mechanisms, root cause analysis of
complaints, and active monitoring of social and digital platforms to address concerns promptly and implement
corrective actions where required.

Further details on the Customer Service Committee, brief terms of reference and attendance record of
members are given in the Report on Corporate Governance.

Initiatives of the Company towards customer engagement are detailed in the Management Discussion
and Analysis.

Succession Planning

The Company has in place a succession planning framework to address anticipated, as well as unscheduled
changes in leadership. The plan is revisited, re-evaluated, and updated every year. The key attribute of the
plan involves:

• Organisational level Long Range Strategy wherein talent required to fulfil the Company''s strategy and annual
operating plan is discussed and planned.

• Performance appraisal system which helps in identifying people demonstrating consistent performance on
their goals and leadership behaviour in line with our cultural anchors.

• Identifying key succession gaps for critical/expert roles especially in N-1 roles to create internal mobility and
career growth or identifying and periodically refreshing external hiring slate.

• To provide leaders with broader experience, cross-functional exposure, and meaningful developmental
challenges through structured rotations across roles, departments, and functions, thereby helping build
multi-dimensional leadership capability.

Compliance with the POSH Act, 2013

The Company is committed to creating a healthy working environment that enables employees to work without
fear of prejudice, gender discrimination and harassment. At BHFL, we believe that all employees have the right
to be treated with fairness and dignity.

The Company has a policy on prevention of sexual harassment at the workplace. The policy is gender neutral.
This policy has been framed in accordance with the provisions of The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013, and rules framed thereunder.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee
under POSH Act, 2013. The aforesaid policy is available on the website of the Company and can be accessed at
https://www.bajajhousingfinance.in/Prevention-of-Sexual-Harassment-at-Workplace.pdf.

Details of the complaints received during the year are as under:

No. of complaints of sexual harassment received in the year	No. of complaints disposed off during the year	No. of cases pending for more than ninety days
1	0	0

Other Statutory Disclosures

• In this report, any reference to the statutory or regulatory guidelines, acts, circulars, regulations,
notifications and directions, unless the context otherwise requires, is construed to include any amendments,
modifications, updations or re-enactment thereof as the case may be.

• More details regarding the operations of the Company and its state of affairs are covered in the Management
Discussion and Analysis.

• There is no change in the nature of business of the Company during FY2026.

• During FY2026, there were no changes to the Company''s constitutional documents.

• The provisions of Section 148 of the Act relating to maintenance of cost records and cost audit are not
applicable to the Company.

• Details required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia,
the ratio of remuneration of director to median remuneration of employees, percentage increase in the
median remuneration, are annexed to this Report.

• Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as
prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended, containing details prescribed under Rule 5(3) of the said rules, which form part of
the Directors'' Report, will be made available to any member on request, as per provisions of Section 136(1)
of the Act.

• As on 31 March 2026, the Company had 2,052 permanent employees, comprising 1,917 male and 135
female employees.

• Disclosure under Section 197(14) of the Act is not applicable to the Company as the Managing Director is not
on the Board of the Holding Company.

• The voting rights are exercised directly by the employees in respect of shares to be allotted under the
Employee Stock Option Scheme of the Company. Thus, the disclosure requirements pursuant to Rule 16(4)
of the Companies (Share Capital and Debentures) Rules, 2014, are not applicable.

• The Company being a non-deposit accepting HFC, the provisions relating to Chapter V of the Act, i.e.,
acceptance of deposit, are not applicable. Hence, information pursuant to Rule 8 of the Companies
(Accounts) Rule, 2014 is not applicable. The Board has also passed a resolution confirming non- acceptance
of public deposits.

• The Company remains committed to supporting working mothers and promoting a gender-inclusive
workplace. The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961.

• The Company has not defaulted on repayment of loans from any banks and financial institutions. There were
no delays or default in payment of interest/principal of any of its debt securities.

• Neither any application was made, nor any proceeding pending under the Insolvency and Bankruptcy Code,
2016 against the Company.

• During FY2026, there was no instance of one-time settlement with Banks or Financial Institutions. Therefore,
as per Rule 8(5) (xii) of Companies (Accounts) Rules, 2014, reasons of difference in the valuation at the time
of one-time settlement and valuation done while taking loans from the Banks or Financial Institutions are
not reported.

• Disclosures pursuant to the RBI Master Directions, unless provided in the Directors'' Report, form part of the
notes to the standalone financial statements and Report on Corporate Governance.

• The Company has in place various Board approved policies pursuant to Companies Act, 2013, SEBI
Regulations, RBI/NHB Directions and other regulations. These policies are reviewed from time to time keeping
in view the operational requirements and the extant regulations. The Report on Corporate governance
contains web-link for policies hosted on website.

Directors'' Responsibility Statement

The financial statements are prepared in accordance with the Indian Accounting Standards (''Ind AS'') under
historical cost convention on accrual basis except for certain financial instruments, which are measured at fair
values pursuant to the provisions of the Act and guidelines issued by the SEBI/RBI/NHB. Accounting policies
have been consistently applied except when a newly issued accounting standard is initially adopted or a revision
to an existing accounting standard requires a change in the accounting policy. These form a part of the notes to
the financial statements.

In accordance with the provisions of Section 134(3) (c) of the Act and based on the information provided by
the Management, the Directors state that:

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

ii. they have selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company for FY2026;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;

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

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

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

Acknowledgement

The Board of Directors places its gratitude and appreciation for the support and co-operation from its
members, debenture holders, the RBI, the IRDAI, the National Housing Bank, the Securities and Exchange Board
of India, BSE Limited & National Stock Exchange of India Limited, the Registrar to an issue and Share Transfer
Agent, the depositories, banks, financial institutions, trustees for debenture holders and customers.

The Board of Directors also places on record its sincere appreciation for the commitment and hard work
put in by the Management and the employees of the Company and thanks them for yet another good year
of performance.

On behalf of the Board of Directors,

Sd/-

Sanjiv Bajaj

Chairman
DIN: 00014615

Date: 27 April 2026

---

Mar 31, 2025

Your directors present the seventeenth Annual Report along with the financial statements for FY2025.

At the outset we thank all shareholders who have reposed confidence in us by participating in the maiden public
offer of the Company. This was the first public offer of the group after thirty years.

The Company''s Initial Public Offering (''IPO) secured remarkable level of interest from investors across all
categories with the issue over-subscribed almost 68 times, excluding bids from anchor investors. The portion
for Qualified Institutional Bidders (''QIBs) witnessed a significant 222.6 times subscription, while the portion
reserved for non-institutional investors witnessed 41.06 times and the retail portion 7.94 times subscription.

More details of the IPO are given in the section on Initial Public Offering of this report.

Company Overview

Bajaj Housing Finance Ltd. (''BHFL'' or ''the Company) is registered with National Housing Bank (''NHB) as a
non-deposit taking Housing Finance Company (''HFC) engaged in the business of mortgage lending since
Fiscal 2018. The Company is a subsidiary of Bajaj Finance Limited (''BFL''/''Holding Company).

The Company offers financial solutions tailored to individuals and corporate entities for the purchase and
renovation of homes and commercial spaces. The Company''s mortgage product suite is comprehensive and
comprises () home loans; (i) loans against property (''LAP); (ii) lease rental discounting; and (iv) developer
financing. The financial products offered by the Company cater''s to every customer segment, from individual
homebuyers to large-scale developers/HNIs. BHFL is also a registered intermediary within the meaning of
Insurance Regulatory and Development Authority of India (''IRDAI'') as a corporate agent.

The Company is classified as an Upper Layer NBFC under the Reserve Bank of India (''RBI) Scale Based Regulations.
Financial results

The key highlights of the financial results for FY2025 are given below:

(H in crore)

Particulars	FY2025	FY2024	over FY2024
Total income	9,576	7,618	26%
Finance Cost	5,979	4,693	27%
Net total income	3,597	2,925	23%
Total operating expenses	747	703	6%
Pre-provisioning operating profit	2,850	2,222	28%
Impairment on financial instruments	80	61	31%
Profit before tax (PBT)	2,770	2,161	28%
Profit after tax (PAT)	2,163	1,731	25%
Retained earnings as at the beginning of the year	3,719	2,335	59%
Profit after tax	2,163	1,731	25%
Other comprehensive income	(1)	(1)	0%
Retained earnings before appropriations	5,881	4,065	45%
Appropriations
Transfer to reserve fund u/s 29C of the NHB Act, 1987	433	346	25%
Retained earnings as at the end of the year	5,448	3,719	46%

Working results of the Company

• Asset Under Management (''AUM'') as on 31 March 2025 was H 1,14,684 crore as compared to H 91,370 crore
as on 31 March 2024, representing an increase of 26% over the previous year.

• Loan receivables as on 31 March 2025 was H 99,513 crore as compared to H 79,301 crore as on
31 March 2024, an increase of 25% over the previous year.

• Total income during FY2025 increased to H 9,576 crore from H 7,618 crore during FY2024 registering a growth
of 26% over the previous year.

• Total operating cost to net total income in FY2025 decreased to 20.8% from 24.0% in FY2024.

• Impairment on financial instruments was H 80 crore. The Company holds macro-economic overlay of
H 34 crore as at 31 March 2025.

• The Company ended FY2025 with a Gross NPA of 0.29% and Net NPA of 0.11% as against 0.27% and 0.10%
for FY2024.

• Profit before tax for FY2025 was H 2,770 crore as against H 2,161 crore for FY2024, an increase of 28% over
the previous year. This is mainly due to the Company''s healthy net interest margin, operating efficiencies and
prudent risk management.

• The profit after tax for FY2025 was H 2,163 crore as compared to H 1,731 crore for FY2024, an increase of
25% over the previous year.

Share capital

a. Allotment of Equity shares through Rights Issue

On 3 April 2024, the Special Committee for Rights Issue constituted by the Board of Directors has allotted,
on rights basis, 1,107,419,709 equity shares of face value of H 10/- each at premium of H 8.06 per equity
share, aggregating to ~ H 2,000 crore, to Bajaj Finance Limited.

b. Allotment of Equity shares through Initial Public Offering

On 13 September 2024, the Company has made an allotment of equity shares through IPO for 93,71,42,856
equity shares of H 10/- each, comprising a fresh issue of 50,85,71,428 equity shares of the Company and
42,85,71,428 equity shares offered for sale by selling shareholders. The equity shares were issued at a
price of H 70/- per equity share (including a share premium of H 60/- per equity share).

The Company''s equity shares got listed on National Stock Exchange of India Limited (''NSE'') and BSE
Limited (''BSE) on 16 September 2024.

c. Allotment of Equity shares to Bajaj Housing Finance ESOP Trust

On 11 April 2025, the Allotment Committee for ESOPs of the Board of Directors has allotted 41,87,918
equity shares of face value of H 10/- each at grant price of H 54.5/- per equity share (including a share
premium of H 44.5/- per equity share) to the Bajaj Housing Finance ESOP Trust under the Bajaj Housing
Finance Limited Employee Stock Option Scheme, 2024.

Pursuant to the aforesaid allotments of equity shares, the issued, subscribed and paid-up capital of the
Company stands increased to H 83,32,33,46,190 (8,33,23,34,619 Equity shares of H 10/- each).

During FY2025, the Company has not issued any convertible securities and there are no outstanding
convertible securities as on 31 March 2025.

Dividend Distribution Policy

Pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the ''SEBI Listing Regulations''), the Company had formulated
a dividend distribution policy, which sets out the parameters and circumstances to be considered by the
Board of Directors (''Board'') in determining the distribution of dividend to its shareholders and/or retaining
profit earned. The dividend distribution policy was approved at the meeting of the Board of Directors held on
6 June 2024. The aforesaid policy is available on the website of the Company and can be accessed at https://
www.bajajhousingfinance.in/documents/37350/53075/BHFI Dividend Distribution Policy.pdf.

Dividend

Considering the capital-intensive nature of the business, the business growth plan of the Company and with a
view to plough back profits, your Board has not recommended any dividend for consideration of its members at
the ensuing Annual General Meeting (''AGM) to build a strong base for long-term sustainable growth.

Transfer to Reserve Fund

Under Section 29C of the National Housing Bank Act, 1987, Housing Finance Companies (''HFCs) are required
to transfer a sum not less than 20% of their net profit every year to their reserve fund before declaration of any
dividend. The Company has transferred a sum of H 432.58 crore to reserve fund, which is 20% of its net profit.

Pursuant to provisions of Companies Act, 2013 (the ''Act'') read with relevant rules thereunder, the Company,
being an HFC, is exempt from creating a debenture redemption reserve in respect of privately placed
debentures including the requirement to invest up to 15% of the amount of debentures maturing during the
next financial year. However, the Company maintains sufficient liquidity buffer to fulfil its obligations arising out
of debentures. In case of secured debentures, an asset cover of at least 100% is maintained at all times.

Scale Based Regulations

The Reserve Bank of India issued a circular on "Scale Based Regulation (SBR): A Revised Regulatory Framework
for NBFCs" on 22 October 2021 (''SBR Framework). As per the SBR framework, based on size, activity, and risk
perceived, NBFCs are categorised into four layers, NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer (NBFC-
ML), NBFC - Upper Layer (NBFC-UL) and NBFC - Top Layer (NBFC-TL). The RBI vide its press release dated 16
January 2025 has continued categorising the Company as an NBFC - Upper Layer.

Initial Public Offering (IPO)

Reserve Bank of India ("RBI"), vide press release dated 30 September 2022, classified the Company as an NBFC
- Upper Layer, which required the Company to be mandatorily listed on or before 30 September 2025.

Pursuant to the same, the Company came out with it''s IPO for listing it''s equity shares on the BSE Limited
(''BSE) and National Stock Exchange of India Limited (''NSE) in September 2024. The IPO comprised of fresh
issue of H 3,560 crore and an offer for sale of H 3,000 crore, aggregating to H 6,560 crore. The equity shares were
issued at a price of H 70/- per equity share (including a share premium of H 60/- per equity share). The equity
shares of the Company were listed on both the stock exchanges on 16 September 2024. Further, the proceeds
of the IPO have been utilized for the object mentioned in the offer document.

Pursuant to the allotment of equity shares, the Company ceased to be wholly owned subsidiary of BFL with
effect from 13 September 2024.

Operations of the Company

Details regarding the operations of the Company and its state of affairs are covered in the ''Management
Discussion and Analysis Report''.

Corporate Agent

The Company has received Certificate of Registration from the Insurance Regulatory and Development
Authority of India (''IRDAI) to act as Corporate Agent (Composite) bearing registration no. CA0885 with validity
of three years from 22 December 2023 to 21 December 2026.

The Company has Corporate Agency agreement executed with HDFC Life Insurance Company Limited, ICICI
Prudential Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Bajaj Allianz General
Insurance Company Limited and Max Life Insurance Company Limited.

Borrowings

The overall borrowing limit of the Company has been increased to H 1,50,000 crore by shareholders at its Extra
Ordinary General Meeting held on 6 June 2024.

The total borrowing as on 31 March 2025 is H 82,071.94 crore. The break-up of the same is as under:

(H in crore)
Short-term

Bank Loans Non-Convertible Borrowings

Particulars	(TL/CC/OD/WCDL)	Debentures	(CP/ICD/TREPS)
Amount	42,068.68	37,524.58	2,478.68
% to total borrowing	51.26%	45.72%	3.02%

As per the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based
Regulations) Directions 2023, the Company was required to maintain a minimum Liquidity Coverage Ratio
(LCR) of 100% from 1 December 2024 onwards. The daily average LCR of the Company during Q4 and as of
31 March 2025 stood at 190.93% and 192.81% respectively.

Subsidiaries, Associates and Joint Ventures

The Company does not have any subsidiaries, associates, or joint ventures. Accordingly, the requirement of
attaching form AOC-1 is not applicable to the Company.

The Company''s policy for determination of material subsidiary, as adopted by the Board of Directors, in
conformity with Regulation 16 of the SEBI Listing Regulations, can be accessed on the Company''s website at
https://www.bajajhousingfinance.in/documents/37350/53075/

BHFI Policy for determining material subsidiaries 19.03.2025.pdf.

As per Regulation 16(1) (c) of SEBI Listing Regulations, a company, whose turnover or net worth exceeds
ten percent of the consolidated turnover or net worth respectively, of its holding company in the immediately
preceding accounting year, is deemed its material subsidiary.

For FY2025, the Company continues to remain to be classified as material subsidiary of Bajaj Finance Limited
(''BFL''), the Holding Company, and Bajaj Finserv Limited (''BFS''), the ultimate Holding Company.

Directors and Key Managerial Personnel (KMP)

A. Change in Directorate:

i. Appointment

S M N Swamy (DIN: 10367727)

On recommendation of the Nomination and Remuneration Committee (''NRC''), the Board has
appointed S M N Swamy as a Non-Executive Independent Director of the Company for a period of

5 consecutive years effective from 1 August 2024. The same has been approved by the members vide
their special resolution dated 19 August 2024.

The Board is of the opinion that S M N Swamy is a person of integrity and possesses relevant expertise

6 experience and proficiency to serve the Company as an Independent Director that can strengthen
the overall composition of the Board.

Pursuant to the provisions of rule 6(4) (C) of the Companies (Appointment and Qualifications of
Directors) Rules, 2014, as amended, S M N Swamy is exempted from completion of online proficiency
self-assessment test.

He is a member of the Audit Committee, Stakeholders'' Relationship Committee, Customer Service
Committee and Special Committee for Monitoring and Follow-up of Cases of Frauds.

B. Directors liable for rotation:

Atul Jain, (DIN: 09561712) retires by rotation at the ensuing AGM, and being eligible, offers himself for re¬
appointment.

Brief details of Atul Jain, who is seeking re-appointment, are given in the Notice of seventeenth AGM.

C. Key Managerial Personnel (KMP):

During FY2025, there was no change in KMP.

Declaration by Independent Directors

All the Independent Directors have submitted a declaration of independence, stating that they meet the
criteria of independence provided under Section 149(6) of the Act read with Regulation 16 of the SEBI
Listing Regulations, as amended. They also confirmed compliance with the provisions of Rule 6 of Companies
(Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in
the databank of Independent Directors.

The Board took on record the declaration and confirmation submitted by the Independent Directors regarding
them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the
same in terms of the requirements of Regulation 25 of the SEBI Listing Regulations.

Remuneration Policies

a. Policy for Compensation of KMP and SMT pursuant to the RBI Guidelines

The RBI vide its circular dated 29 April 2022 issued Guidelines on Compensation of Key
Managerial Personnel (''KMP'') and Senior Management (''SMT'') in NBFCs pursuant to Scale Based
Regulatory Framework.

Accordingly, the Company has adopted a Board approved policy exclusively governing compensation
payable to KMP and SMT. This policy lays down detailed framework, inter alia, encompassing the following:

• Principles of compensation;

• Compensation components;

• Principles of variable pay;

• Deferral of variable pay;

• Compensation for control and assurance function personnel; and

• Provisions for malus and clawback and circumstances under which application of malus and clawback is
to be considered.

The Board at its meeting held on 24 April 2024 amended the policy to provide the reference of the
Company''s ESOP scheme.

The aforesaid policy can be accessed at https://www.bajajhousingfinance.in/documents/37350/53075/
Remuneration policy - RBI.pdf.

b. Policy on Directors'' Appointment and Remuneration

Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule
II of the SEBI Listing Regulations, the Board has framed a remuneration policy. This policy, inter alia,
lays down:

a) The criteria for determining qualifications, positive attributes and independence of directors; and

b) Broad guidelines of compensation philosophy and structure for Non-Executive Directors, key
managerial personnel and other employees.

The aforesaid policy can be accessed at https://www.bajajhousingfinance.in/documents/37350/53075/
Remuneration Policy - Companies Act.pdf

During FY2025, there were no pecuniary relationship/transactions of any of the Non-Executive Directors
with the Company apart from sitting fees and profit linked Commission, payable to them as directors.

Formal annual evaluation of the performance of the Board, its Committees and Directors

Pursuant to Section 178 of the Act, the Board decided that the evaluation shall be carried out by the Board and
the NRC shall only review its implementation and compliance.

Further as per Schedule IV of the Act and provisions of the SEBI Listing Regulations, the performance
evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director
being evaluated, based on performance and fulfillment of criteria of independence and their independence
from management.

Based on the report of the performance evaluation, it shall be determined whether to extend or continue the
term of appointment of Independent Director.

Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its
Committees, Chairperson and Individual Directors.

The manner in which formal annual evaluation of performance was carried out by the Board for FY2025 is
given below:

• The NRC at its meeting held on 27 January 2025, reviewed the criteria for performance evaluation and
recommended the modifications to the Board for its approval. The Board at its meeting approved the
proposed modifications.

• Based on the said criteria, a questionnaire-cum-rating sheet was deployed using an IT platform for seeking
feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and
individual directors. An option for qualitative feedback was also included.

• From the individual ratings received from the directors, a report on summary of ratings in respect of
performance evaluation of the Board, its Committees, Chairperson and individual directors FY2025 and a
consolidated report thereof was arrived at.

• The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on
19 March 2025.

• The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting
held on 19 March 2025.

• Based on the report and evaluation, the NRC and Board at their respective meetings held on 19 March 2025,
determined that the appointment of all Independent Directors may continue.

• Details on the evaluation of Board, Non-Independent Directors and Chairperson of the Company as carried
out by the Independent Directors at their separate meeting held on 19 March 2025 have been furnished in a
separate paragraph elsewhere in this report.

• During FY2025, the process followed by the Company was reviewed by the NRC, which opined it to be in
compliance with the applicable provisions and found it to be satisfactory.

Other than the Chairman of the Board and NRC, no other Director has access to the individual ratings given
by directors.

Meeting of Independent Directors

Pursuant to Section 149(8) read with Schedule IV of the Act, and Regulation 25(3) of SEBI Listing Regulations,
the Independent Directors shall hold at least one meeting in a financial year without the presence of Non¬
Independent Directors and members of the management. The meeting of Independent Directors of the
Company was held on 19 March 2025.

The Independent Directors at the meeting held on 19 March 2025, inter alia:

• Noted the report of performance evaluation of the Board & its committees for the year 2024-25.

• Reviewed the performance of Non-Independent Directors and the Board as a whole.

• Reviewed the performance of the Chairman of the Board taking into account the views of Executive Directors
and Non-Executive Directors; and

• Assessed the quality, quantity and timeliness of flow of information between the Company''s Management
and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Number of Board Meetings

The Board met ten times during FY2025 on 24 April 2024, 6 June 2024, 7 June 2024, 22 July 2024, 20 August
2024, 30 August 2024, 11 September 2024, 21 October 2024, 27 January 2025 and 19 March 2025. The gap
between any two consecutive meetings was less than one hundred and twenty days.

Directors'' Responsibility Statement

The financial statements are prepared in accordance with the Indian Accounting Standards (''IndAS'') under
historical cost convention on accrual basis except for certain financial instruments, which are measured at fair
values pursuant to the provisions of the Act and guidelines issued by the SEBI/RBI/NHB. Accounting policies

have been consistently applied except where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy. These form a part of the
notes to the financial statements.

In accordance with the provisions of Section 134(3) (c) of the Act, the Directors state that:

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

ii. they have selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company for FY2025;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;

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

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

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

Audit Committee

The Company has an Audit Committee fulfilling the requirements under the Act, RBI Master Direction -Non¬
Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 ("RBI Regulations")
and SEBI Listing Regulations.

The Committee comprises of Anami N Roy (DIN: 01361110), Chairman, Dr. Arindam Bhattacharya (DIN: 01570746),
Rajeev Jain (DIN: 01550158), Jasmine Chaney (DIN: 07082359) and S M N Swamy (DIN: 10367727).

The composition of Audit Committee is over and above the minimum requirement prescribed under the Act,
SEBI Listing Regulations, and RBI Regulations of having a minimum of two-thirds of Independent Directors,
including the Chairman. All members of the Committee are considered financially literate and are deemed to
have necessary accounting or financial management related expertise in terms of SEBI Listing Regulations.

All recommendations of the Audit Committee were accepted by the Board.

The brief terms of reference and attendance record of members are given in the Corporate Governance Report.
Particulars of Loans, Guarantees and Investments

The Company, being a HFC registered with the NHB and engaged in the business of providing loans in ordinary
course of its business, is exempt from complying with the provisions of Section 186 of the Companies Act,
2013, with respect to loans. Accordingly, the Company is exempted from complying with the requirements to
disclose in the financial statement the full particulars of the loans given, investment made, guarantee given, or
security provided.

Employee Stock Options (ESOPs)

With a view to maintain a right balance between fixed pay, short-term incentives and long-term incentives and
to effectively align with the risk considerations and build focus on consistent long-term results, the Company
has formulated an Employee Stock Option Scheme in accordance with the Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (''SEBI SBEB Regulations'').
Pursuant to Regulation 12(1) of the SEBI SBEB Regulations, post listing, the approval of shareholders was
sought through postal ballot held on 21 December 2024, ratifying the scheme.

The Company follows an annual appraisal process. Various factors such as past year''s performance, grade of
the employee, length of service, role and overall contribution, the performance of business/function to which
the employee belongs, merits of the employee, future potential contribution by the employee and/or such other
similar factors would be considered by the Compensation Committee while approving the grant of options.

A statement giving complete details, as at 31 March 2025, under Regulation 14 of SEBI SBEB Regulations,
and Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 are available on the website of the
Company and can be accessed at https://www.bajajhousingfinance.in/annual-reports.

Grant wise details of options vested, exercised, and cancelled are provided in the notes to the financial
statements. The Company has not issued any sweat equity shares or equity shares with differential voting
rights during FY2025.

Related Party Transactions

All contracts/arrangement/transactions entered by the Company during FY2025 with related parties were in
compliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval of the
Audit Committee is obtained for all related party transactions which are foreseen and of repetitive nature. Such
transactions are reviewed by the Audit Committee on a quarterly basis.

The Company had engaged an independent law firm to review the transactions carried out with related parties
during FY2025, to affirm that the transactions are at arm''s length nature of such transactions. The said firm,
based on its review has concluded that the aforementioned transactions are at arm''s length.

Pursuant to Regulation 23(4) of the SEBI Listing Regulations, 2015, all material related party transactions and
subsequent material modification as defined in the policy on materiality of related party transaction shall require
prior approval of the shareholders through resolution and no related party shall vote to approve such resolutions
whether the entity is a related party to the particular transaction or not.

Further, as per Regulation 23(1) of SEBI Listing Regulations, 2015, transaction with a related party shall be
considered material, if the transaction(s) to be entered into individually or taken together with previous transactions
during a financial year, exceeds rupees one thousand crore or ten per cent of the annual consolidated turnover of the
listed entity as per the last audited financial statements of the listed entity, whichever is lower.

Material Related Party Transactions with Bajaj Finance Limited

In terms of Regulation 23 and other applicable provisions of SEBI Listing Regulations, 2015 and Company''s
Policy on Materiality of & Dealing with Related Party Transactions, based on the approval of the Audit
Committee, approval of the Members was sought for entering into and/or continuing with arrangements/
contracts/ agreements/transactions (whether by way of an individual transaction or transactions taken
together or series of transactions or otherwise) with Bajaj Finance Limited, being a related party of the
Company, in the nature of:

(H in crore)

Transfer/sale of loans or loan pools by way of assignment and servicing arrangements	5,050
Availing of loans or advances, credit facilities, or any other form of fund-based facilities	2,500
Charges for inter-company services rendered between the Company and BFL	100
Sourcing of products by the Company and BFL	25
Total	7,675

The aforesaid transactions were approved by the shareholders (excluding promoter and promoter group and
all related party) vide the resolution passed on 21 December 2024 through postal ballot. The resolution was
approved with overwhelming majority (88.84%). The transactions are permitted to be carried out from the date
of approval by postal ballot i.e., 21 December 2024 until the ensuing Annual General Meeting.

Similarly, the approval of the members is being sought at the ensuing Annual General Meeting for entering
transactions with BFL exceeding the prescribed threshold. Further details are provided in the Notice of the AGM.

Material Changes and Commitments

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

Conservation of Energy

Though the operations of the Company are not energy intensive, the Company implements various energy
conservation measures across all its functions, verticals and value chain partners. Key initiatives of the
Company include the following:

• Switching from conventional lighting system to LED lights at most of the branches in metro areas;

• Selecting and designing offices to facilitate maximum natural light utilization;

• Use of cloud based virtual servers to increase energy efficiency and data security; and

• The company has adopted strategy to minimize usage of non-production workload during night hours which
helps in cost optimization and reduce greenhouse effect.

IT infrastructure

The company has adopted strategy to minimize usage of its non-production IT infrastructure workload during
night hours which helps in cost optimization and reduce greenhouse effect.

Technology Absorption

The Company adopts technologies for acquisition and servicing. The Company has hosted its entire enterprise
IT ecosystem on cloud leading to flexible architecture for its business applications, data warehousing and
analytics. It enables performance, scalability, cost effective and secure architecture. The Company has
improvised its stack of web-based applications compatible across computing devices enabling mobility along
with API gateways for seamless integration.

The Company has adopted tenets of Artificial Intelligence (A) to improve customer service. BHFL continues
to strengthen its Information Security posture through increased monitoring over attack surface, fine tuning
processes and by proactively mitigating identified gaps. Technology solutions and processes such as VAPT,
Cloud Architecture review, Managed Endpoint Detection & Remediation (MDR) have been implemented to
enhance security posture along with various measures taken for customer data protection. The Company has
also improvised productivity in areas of business operations and customer service by leveraging robotic process
automation (RPA) and AI coupled with machine learning (ML).

Foreign Exchange Earnings and Outgo

During FY2025, the Company did not have any foreign exchange earnings in terms of actual inflow and the
foreign exchange outgo in terms of actual outflow amounted to H 3.06 crore.

Corporate Social Responsibility (CSR)

The CSR Committee comprises of three directors viz. Anami N Roy (Chairman) (DIN: 01361110), Sanjiv Bajaj
(DIN: 00014615) and Rajeev Jain (DIN: 01550158).

The CSR interventions for the year focused on Youth skilling, Child education, Child protection, Child health
and Inclusion of Persons with Disabilities. The salient features of the CSR Policy and impact assessment
report forms part of the Annual Report on CSR activities. The CSR policy has been hosted on the website of
the Company and can be accessed at https://www.bajajhousingfinance.in/documents/37350/53y4874/
CSR Policy.pdf

''Bajaj Beyond'' is the Group''s identity for all its Corporate Social Responsibility and charitable programmes with
special focus on youth skilling. The initiatives aim to benefit the youth and enable them to take advantage
of employment and entrepreneurial opportunities offered by India''s growing economy in the years to come.
Pursuant to Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual Report on
CSR activities is annexed to this Report.

The CSR obligation of the Company for FY2025 is H 30.29 crore. As on 31 March 2025, the Company has fully
spent the CSR obligation for FY2025.

Further, the Chief Financial Officer has certified that the funds disbursed have been utilized for the purpose and
in the manner approved by the Board for FY2025.

Annual Return

A copy of the annual return as provided under Section 92(3) of the Act, in the prescribed form, which will
be filed with the Registrar of Companies/MCA, is hosted on the Company''s website and can be accessed at
https://www.bajajhousingfinance.in/annual-reports.

Risk Management

The Board of Directors have adopted a Risk Management Policy for the Company which provides for
identification of key events/risks impacting the business objectives of the Company and attempts to develop
risk policies and strategies to ensure timely evaluation, reporting and monitoring of key business risks.

This framework, inter alia, provides the set of components that provide the foundations and organizational
arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management
throughout the organization. It covers principles of risk management, risk governance with roles and

responsibilities, business control measures, principle risks and business continuity plan. The Management
identifies and controls risks through a defined framework in terms of the aforesaid policy.

The Board is of the opinion that there are no elements of risk that may threaten the existence of the Company.

The RBI, vide its circular dated 22 October 2020, reviewed the regulatory framework for HFCs wherein, all non¬
deposit taking HFCs with asset size of more than H 100 crore shall pursue liquidity risk management which,
inter alia, should cover adherence to gap limits. The Board has in place a Liquidity Risk Management framework
encompassing, inter alia, strategies and practices, internal controls, maturity profiling, liquidity coverage ratios
and high-quality liquid assets.

Pursuant to the RBI Scale based framework, NBFCs are required to have an Internal Capital Adequacy
Assessment Process (''ICAAP'') in place. The objective of ICAAP is to ensure availability of adequate capital to
support all risks in business as also to encourage NBFCs to develop and use better internal risk management
techniques for monitoring and managing their risks. Accordingly, the Company has framed an ICAAP policy. This
policy is developed considering the requirements of the SBR and is based on the Pillar -2 requirements under
Basel III Framework developed by the Basel Committee on Banking Supervision (''BCBS'').

The objective of the policy is to provide an ongoing assessment of the Company''s entire spectrum of risks and
the methodology to assess current and future capital, reckoning other mitigating factors and to assist and
apprise the Board on these aspects and on Company''s ICAAP and Company''s approach to capital management.

In terms of the RBI Regulations, the Committee also has an independent meeting with the Chief Risk Officer
without the presence of management.

More detailed discussion on the Company''s risk management and portfolio quality is covered in the
Management Discussion and Analysis Report.

Fraud monitoring and reporting

The Reserve Bank of India vide Master Directions on Fraud Risk Management in Non-Banking Financial
Companies (''NBFCs'') (including Housing Finance Companies) dated 15 July 2024 came up with directions on
Fraud risk management. Pursuant to the RBI Master Direction, the Company has adopted comprehensive Fraud
Risk Management Policy covering aspects viz, measure towards fraud prevention, fraud detection, investigation,
staff accountability, monitoring of frauds, recovery of frauds, reporting of frauds and roles & responsibilities of
Board/Board Committees and Senior Management.

Further, a Special Committee of the Board is formed for Monitoring and Follow-up of cases of Frauds (''SCBMF
committee'') to oversee the effectiveness of the fraud risk management. The SCBMF committee reviews and
monitor cases of frauds, including root cause analysis, and suggest mitigating measures for strengthening the
internal controls, risk management framework and minimising the incidence of frauds.

The Company also has in place a senior management Early Warning Signal committee for review and
implementation of a robust framework for Early Warning Signal. During the year under review, no instances of
frauds were detected by the Company.

The Company has a comprehensive Risk Containment Unit infrastructure. The risk containment and fraud control
unit, through prevention and deterrence actions, is responsible for preventing frauds perpetrated by customers,
sourcing channels and employees either alone or in connivance with others. It ensures that most fraud checks are
performed well before any disbursal of loan through fraud controls/checks built in its loan origination system.

Significant and Material Orders Passed by the Regulators and Courts

During FY2025, there were no significant or material orders passed by any regulator or court or tribunal
impacting the going concern status or the Company''s operations in future.

Internal Audit

Internal Audit function provides an independent view to the Audit Committee on the quality and efficacy of the
internal controls, governance systems and processes.

In line with the RBI''s guidelines on Risk Based Internal Audit (''RBIA''), the Company has adopted a Risk Based
Internal Audit policy.

The Internal Audit provides assurance to the Audit Committee and Board of Directors on quality and effectiveness
of the internal controls, and governance related systems and processes. The concurrent review process has been
strengthened for all products covering underwriting, collateral and operations to mitigate transaction risk.

At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. The
Audit Committee regularly reviews the internal audit reports along with the corrective and preventive actions
thereon. Significant audit observations, corrective and preventive actions thereon are presented to the Audit
Committee on a quarterly basis.

The Audit Committee independently meets the internal auditor without the presence of management. As per
the RBI guidelines, quality assurance and improvement program (''QAIP'') is required to be carried out at least
once a year covering all aspects of internal audit function. Accordingly, QAIP was carried out by an external
agency for FY2024 to assess functioning of the internal audit function, adherence to the internal audit policy,
objectives and expected outcomes. Similarly, QAIP for FY2025 will be carried out by an external agency.

Internal Financial Controls

The Company has in place internal financial control considering the essential components of various critical
processes, physical and operational, which also includes its design, implementation, and maintenance along
with periodical internal review of operational effectiveness and sustenance. The Company has in place
adequate financial controls commensurate with its size, scale and complexity of operations. These have been
designed with the aim to provide reasonable assurance regarding recording and providing financial information,
ensuring integrity in conducting business, accuracy and completeness in maintaining accounting records,
prevention and detection of frauds and errors.

The Company has in place accounting software for maintaining its books of account which has the feature of
recording audit trail and the same has operated throughout the year for recoding of all relevant transactions.

The Audit Committee and Board reviewed the internal financial control and are of the opinion that internal
financial controls with reference to the financial statements are adequate and operating effectively.

Information System Audit

In terms of the RBI Master Direction on Information Technology Governance, Risk, Controls and Assurance
Practices dated 7 November 2023, the Company is required to put in place IS Audit Policy which shall inter
alia contain a clear description of its mandate, purpose, authority, audit universe, periodicity of audit etc.
Accordingly, the Company has adopted a Board approved IS Audit Policy at its meeting held on 15 March 2024.

During the year under review, an IT system audit was conducted by a CERT-in empaneled audit firm. The
areas audited were IT General Controls, Cyber Security Controls and Information Security Controls as per the
regulatory framework applicable to the Company.

Necessary continuous improvement actions have been taken in line with the audit observations.

ISO transition and re-certification audit with latest ISO standard was also conducted. The Company has
successfully re-certified with latest ISO standard and received ISO 27001-2022 certificate.

Information Technology Governance, Business Continuity and Cyber Security

The RBI has issued Master Direction on Information Technology Governance, Risk, Controls and Assurance
Practices dated 7 November 2023 effective 1 April 2024. In line with said Directions, the terms of reference of
the IT Strategy Committee were revised during the year. The same, inter alia, includes the following:

• Review at least on annual basis, the adequacy and effectiveness of the Business Continuity Planning and
Disaster Recovery Management;

• Review the assessment of IT capacity requirements and measures taken to address the issues;

• Approve documented standards and procedures for access to information assets; and

• Decide constitution of Information Security Committee (''ISC''), with Chief Information Security Officer
(''CISO'') and other representatives from business and IT functions, etc.

Pursuant to the said Directions, the Company has appointed a CISO who shall be responsible for driving cyber
security strategy and ensuring compliance to the extant regulatory/ statutory instructions on information/
cyber security and other roles and responsibilities as stipulated therein.

In accordance with IT Governance framework, the Company has put in place policies which, inter alia, includes
Business Continuity Policy, Information Security Policy, Information Technology Policy, Cyber Security Policy, IT
Outsourcing Policy, Cyber Crisis Management Plan, Information Security Incident Management Policy, Access
Management Policy, Change Management Policy.

The IT Strategy Committee has also constituted the IT Steering Committee and Information Security Committee
consisting of senior executives of the Company in accordance with the RBI Directions. The role of IT Steering
Committee is to assist the IT Strategy Committee in strategic IT planning, oversight of IT performance, and
aligning IT activities with business needs, ensuring implementation of a robust IT architecture meeting statutory
and regulatory compliance. The Information Security Committee is constituted for managing cyber/ information
security under the oversight of IT Strategy Committee comprising of CISO and other representatives from
business(es), finance and IT functions headed by personnel from risk management vertical.

To enable user to work from home in secure manner, the Company implemented VPN functionality. The
Company also enabled remote access for identified partners to enable full resources for user support, cloud
support, application maintenance and testing using privilege access management technology connecting to
the Company servers. Cloud infrastructure has been built with DR capabilities and can run applications during
any disaster situation. DR drill is being conducted twice a year to ensure DR readiness. Regular application
backup restoration exercise is being carried out. To improve resiliency, laptop backup solution is implemented
for senior management.

The Company''s cloud first IT strategy helps to manage the demand with elastic scalability and rapid provisioning
while reducing total cost of ownership and turnaround time.

The Company''s Cyber security strategy consists of a plan of actions designed to improve the security and
resilience of cloud infrastructures and services. It is a high-level top-down approach to cyber security that
establishes a range of organization objectives and priorities that should be achieved in a specific timeframe.

As a critical component in cyber security, the Company is working on improving awareness among employees
using a learning platform and simulation exercises.

The Company has a documented Business Continuity Management Policy which has been designed to ensure
continuity of critical processes during any disruption. A robust Disaster Recovery framework has been put in
place to manage business and technology interruption risk, minimize interruptions in operations and service
to customers.

During the year under review, the Directors were briefed and appraised on cyber security. These, inter alia,
involved understanding of cyber security incidents and industrialization of cybercrime operations, assessing
new developments and issues relating to cyber and information security, understanding of cyber security
trends including recent cyber frauds and attacks, Board''s responsibility in the events of change management,
Board oversight responsibility for cyber security, etc. Further, on an annual basis, the senior management of the
Company have undergone IT security trainings.

Whistle-Blower Policy/ Vigil Mechanism

The Company has a whistle-blower policy encompassing vigil mechanism pursuant to the requirements of
the Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations and Regulation 9A of SEBI
(Prohibition of Insider Trading) Regulations, 2015.

The whistle-blower framework has been introduced with an aim to provide employees, directors and value chain
partners with a safe and confidential channel to share their inputs about such aspects which are adversely
impacting operations of the Company. The policy/vigil mechanism enables directors, employees and value
chain partners to report their concerns about unethical behaviour, actual or suspected fraud or violation of the
Company''s code of conduct or ethics policy and leak or suspected leak of unpublished price sensitive information.

Concerns may be reported anonymously either through e-mail or through a ''Confidential Feedback Mechanism'',
which is reviewed by a Whistle-Blower Committee comprising senior management from within and outside
the organization. The Audit Committee reviews the functioning of the vigil mechanism/whistleblower policy
once a year. It provides safeguards against victimization of directors/employees/ value chain partners who
avail the mechanism and allows for direct access to the Chairperson of the Audit Committee by writing to
[email protected].

Policy has been hosted on the Company''s website and can be accessed at https://www.bajajhousingfinance.in/
documents/37350/697?394/Vigil Mechanism Whistle Blower Policy.pdf.

Employees of the Company are required to undergo mandatory online learning module on code of conduct which
includes whistle-blower policy and affirm that they have understood and are aware of vital aspects of the policy.

During FY2025, no person was denied access to the Audit Committee or its chairperson under this policy and
9 complaints were received under the vigil mechanism of the Company which have been investigated and
addressed as per the policy of the Company.

Business Responsibility and Sustainability Report (BRSR)

Pursuant to the SEBI circular dated 10 May 2021 and amendment in SEBI Listing Regulations, top 1000 listed
entities based on market capitalisation are required to submit Business Responsibility and Sustainability report.

SEBI, vide its circular dated 12 July 2023 introduced BRSR Core. BRSR Core is a sub-set of the BRSR, consisting
of a set of Key Performance Indicators (''KPIs) under 9 ESG attributes. Further, top 150 listed entities are
required to mandatorily undertake reasonable assurance of the BRSR Core.

The Company, from FY2024, has been voluntarily taking limited assurance on BRSR and GHG data. In
compliance with the SEBI requirements, the Company has appointed SGS India Pvt. Ltd. (''SGS) as an
Assurance provider for carrying out the Reasonable Assurance for BRSR Core (including GHG data) and Limited
Assurance on rest of the BRSR, for FY2025.

The Company has adopted a Policy for Responsible and Sustainable Business Conduct. The Company has Board
approved ESG committee of the Management, led by Managing Director, comprising key stakeholders including
the Chief Financial Officer, and Head of Compliance, Operations, Information Technology, Risk, Human Resource,
Company Secretarial for implementing and monitoring ESG-related aspects.

The BRSR in the updated format (including new KPIs of BRSR Core) prescribed by SEBI is annexed to the
Annual Report. A detailed ESG Report describing various initiatives, actions, and process of the Company
towards the ESG endeavor can be accessed at https://www.bajajhousingfinance.in/annual-reports.

Changes to the Constitutional Documents

a. Memorandum of Association (MOA)

During the FY2025, the Members vide ordinary resolution dated 24 April 2024 had approved an increase
in authorised share capital of the Company from H 8,000 crore to H 9,000 crore. Consequent to the
increase in authorised share capital, the clause V of MOA stands altered to reflect the change in authorised
share capital.

b. Articles of Association (AOA)

The Members vide special resolution dated 6 June 2024, amended clauses pertaining to Further Issue
of Capital, Payment in anticipation of call may carry interest and Unclaimed & unpaid dividend of AOA to
conform to the requirements prescribed by relevant stock exchanges prior to filing of the draft red herring
prospectus with the Securities and Exchange Board of India and the relevant stock exchanges.

Copy of the aforesaid documents are available on the Company''s website at https://www.bajajhousingfinance.
in/offer-documents.

Corporate Governance

In terms of the SEBI Listing Regulations, a separate section titled ''Report on Corporate Governance'' has been
included in this Annual Report, along with the Management Discussion and Analysis Report and General
Shareholder Information.

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

A certificate from Statutory Auditors of the Company regarding compliance of conditions of corporate
governance is annexed to this Report and it does not contain any qualification, reservation or adverse remarks.

Secretarial Standards

The Company has complied with the requirements prescribed under the Secretarial Standards on meetings of
the Board of Directors (''SS-1) and General Meetings (''SS-2) read with the MCA Circulars.

Auditors and Auditors'' Report
Statutory auditors

Khandelwal Jain & Co. (Firm Registration No. 105049W) and G D Apte & Co., (Firm Registration No. 100515W)
upon the completion of the term of consecutive period of three years, in line with the RBI guidelines ceased to
be joint statutory auditors.

Accordingly, the Board of Directors, based on the recommendation of the Audit Committee at its meeting held
on 24 April 2024, approved appointment of Mukund M. Chitale & Co. (Firm Registration No. 106655W) and
Singhi & Co. (Firm Registration No. 302049E) as joint statutory auditors of the Company for a consecutive
period of three years.

At the 16^th AGM, shareholders of the Company approved their appointment as Joint Statutory Auditors for term
of three consecutive years from the conclusion of the 16^th AGM till the conclusion of the 19^th AGM to audit the
accounts of the Company i.e., for the financial year ending 31 March 2025, 31 March 2026 and 31 March 2027.

The Audit Report given by Mukund M. Chitale & Co. and Singhi & Co., for FY2025 is unmodified, i.e., it does not
contain any qualification, reservation or adverse remark or disclaimer.

Secretarial audit

Pursuant to the provisions of Section 204 of the Act, the Board has appointed Shyamprasad D Limaye,
practicing company secretary (FCS No. 1587, CP No. 572), to undertake secretarial audit of the Company. A
report from the secretarial auditor in the prescribed Form MR-3 for the year ended 31 March 2025 is annexed to
this Report.

Pursuant to Regulation 24A (2) of SEBI Listing Regulations, a report on secretarial compliance for FY2025 has
been issued by Shyamprasad D Limaye and the same has been submitted with the stock exchange within the
prescribed timelines. The said report is available on the website of the Company.

There are no observations, reservations, qualifications or adverse remark in any of the aforesaid report. The
auditors, i.e., Statutory Auditors and Secretarial Auditors, have not reported any matter under Section 143 (12)
of the Act, and therefore, no detail is required to be disclosed under Section 134(3) (ca) of the Act.

Appointment of Secretarial Auditor

Pursuant to the amendment of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with effect from 13 December 2024, a listed entity shall appoint or reappoint:

i. an individual as Secretarial Auditor for not more than one term of five consecutive years; or

ii. a Secretarial Audit firm as Secretarial Auditor for not more than two terms of five consecutive years, with
the approval of its shareholders in its Annual General Meeting.

Accordingly, Board of Directors have approved and recommended the appointment of DVD & Associates,

Peer Reviewed Firm of Company Secretaries in Practice (Firm Registration Number: S2016MH35900D) as
a Secretarial Auditor of the Company for a term of 5 (Five) consecutive years to conduct Secretarial Audit
of the Company and to furnish the Secretarial Audit Report for the period commencing from FY2025-26 till
FY2029-2030, for approval of the Members at ensuing AGM of the Company.

Brief resume and other details are separately disclosed in the Notice of the AGM. DVD & Associates have given
their consent to act as a Secretarial Auditor of the Company and confirmed that their aforesaid appointment,
if made, would be within the prescribed limits under the Act & Rules made thereunder and SEBI Listing
Regulations. They have also confirmed that firm is not disqualified to be appointed as a Secretarial Auditor in
terms of provisions of the Act & Rules made thereunder and SEBI Listing Regulations.

Customer Engagement

Customer engagement and experience are core pillars of our organization, and we are dedicated to upholding
customer fairness in both letter and spirit across all our actions. Proactive engagement empowers institutions
to gain meaningful insights, manage risks effectively, ensure compliance, and seamlessly adopt new
technologies. In today''s dynamic environment, prioritizing customer experience is vital for staying competitive,
fostering strong relationships, and driving sustainable success.

To strengthen the customer engagement and monitoring process, the Board at its meeting held on 19 March
2025, has constituted a Customer Service Committee (''CSC'') headed by an Independent Director.

The composition as on 31 March 2025 is as follows:

Sr. No. Name of director		Category
1.	Jasmine Chaney	Chairperson, Non-Executive, Independent
2.	S M N Swamy	Non-Executive, Independent
3.	Rajeev Jain	Non-Executive, Non-Independent
4.	Atul Jain	Executive, Non-Independent

With members having diverse expertise, the Committee will guide the Management to identify improvement
areas, evaluate customer feedback, and implement policies that address concerns in a timely manner. By
prioritizing customer-centric practices and fostering a culture of responsiveness and empathy, the Committee
will ensure that the organisation continuously evolves to meet the dynamic business needs and expectations of
customers, ultimately fostering loyalty and trust.

The Company has taken a proactive initiative to empower customers with enhanced self-service options.
Through customer portal and mobile app, customers can effortlessly raise service requests, access flexible
payment options-including advance EMI, part pre-payment, increase EMI, reduce tenure, missed EMI payments
via ECMS, UPI, and Bill Desk-and download essential loan-related documents. Additionally, a self-service query
form enables customers to troubleshoot their concerns independently.

Further, the Company has established a robust Grievance Redressal Mechanism with defined turnaround times
and a structured escalation hierarchy for unresolved or delayed complaints.

Compliance with Code of Conduct

All Board members and Senior Management personnel have affirmed compliance with the Company''s Code
of Conduct for FY2025. A declaration to this effect signed by the Managing Director is included in this
Annual Report.

Other Statutory Disclosures

• There is no change in the nature of business of the Company during FY2025.

• The provisions of Section 148 of the Act relating to cost accounts and cost audit are not applicable to
the Company.

• During FY2025, no amount has remained unclaimed pursuant to debentures redeemed during the year.

• Details required under the provisions of Section 197(12) of the Act read with rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia,
the ratio of remuneration of director to median remuneration of employees, percentage increase in the
median remuneration, are annexed to this Report.

• Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as
prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended, containing details prescribed under rule 5(3) of the said rules, which form part of
the Directors'' Report, will be made available to any member on request, as per provisions of Section 136(1)
of the Act.

• Disclosure under Section 197(14) of the Act is not applicable to the Company as the Managing Director is not
on the Board of the holding company.

• The voting rights are exercised directly by the employees in respect of shares to be allotted under the
Employee Stock Option Scheme of the Company. Thus, the disclosure requirements pursuant to Rule 16(4)
of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

• The Company being a non-deposit accepting HFC, the provisions relating to Chapter V of the Act, i.e.,
acceptance of deposit, are not applicable. The Board has also passed a resolution confirming non¬
acceptance of public deposits.

• The Company has no transaction that qualify under the contracts and arrangements with related parties
referred in Section 188(1) of the Act.

• For the details about the policy developed and implemented by the Company on CSR initiatives taken during
the year, refer the Annual Report on CSR activities annexed to this Report.

• The Company has a policy on prevention of sexual harassment at the workplace. The Company has complied
with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressa) Act, 2013. The number of complaints received,
disposed off and pending during FY2025 is given in the annexed ''Corporate Governance Report''.

• The Company has not defaulted in repayment of loans from any banks and financial institutions. There were
no delays or defaults in payment of interest/principle of any of its debt securities.

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

• SEBI vide its circular SEBI/HO/DDHS/DDHS-RAC-1/P/CIR/2023/176 dated 8 November 2023 (''the Circular),
has prescribed the procedural framework for dealing with unclaimed interest and redemption amounts lying
with entities having listed non-convertible securities and manner of claiming such amounts by investors.

The circular requires such companies to formulate a policy specifying the process to be followed by investors
for claiming their unclaimed amounts. Accordingly, a policy titled ''Policy for claiming unclaimed amounts
with respect to Non-Convertible Debentures from Escrow Account'' has been framed by the Company.

The policy can be accessed at https://www.bajajhousingfinance.in/documents/37350/53075/BHFI
Policy for unclaimed amounts-NCDs %781 %29.pdf. The Company Secretary has been designated as the
Nodal Officer for the purposes of this circular. As on 31 March 2025, there is no amount remaining unclaimed
in respect of non-convertible debentures.

• Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code,
2016 against the Company.

• During FY2025, there was no instance of one-time settlement with Banks or Financial Institutions.

• Disclosures pursuant to the RBI Master Directions, unless provided in the Directors'' Report, form part of the
notes to the standalone financial statements and Report on Corporate Governance.

• The Company has complied with relevant Sections of the Act and applicable rules thereunder while issuing
equity shares under Rights issue and IPO.

• The Company has in place various Board approved policies pursuant to Companies Act, 2013, SEBI
Regulations, RBI/NHB Directions and other regulations. These policies are reviewed from time to time keeping
in view the operational requirements and the extant regulations. The Report on Corporate governance
contains web-link for policies hosted on website.

Acknowledgement

The Board places its gratitude and appreciation for the support and co-operation from the Reserve Bank
of India, the National Housing Bank, the Securities and Exchange Board of India, BSE Limited & National
Stock Exchange of India Limited, the IRDAI and other regulators, banks, financial institutions and trustees for
debenture holders.

The Board also places on record its sincere appreciation for the commitment and hard work put in by the
Management and the employees of the Company.

On behalf of the Board of directors
Sd/-

Sanjiv Bajaj

Chairman
DIN: 00014615

Date: 23 April 2025

---

Mar 31, 2024

Your directors present the sixteenth Annual Report along with the financial statements for FY2024.

Company Overview

Bajaj Housing Finance Ltd. (''BHFL'' or ''the Company) is registered with National Housing Bank (''NHB) as a Housing Finance Company (''HFC) engaged in the business of mortgage lending since 2017-18. It is a wholly owned subsidiary of Bajaj Finance Limited (''BFL''/''Holding Company). The Company offers financial solutions tailored to individuals and corporate entities for the purchase and renovation of homes and commercial spaces. The Company''s mortgage product suite is comprehensive and comprises () home loans; (i) loans against property ("LAP''); (ii) lease rental discounting; and (iv) developer financing. Furthermore, our primary emphasis is on individual retail housing loans, complemented by a diversified collection of lease rental discounting and developer loans. Consequently, the financial products of the Company cater''s to every customer segment, from individual homebuyers to large-scale developers. It is also a registered intermediary within the meaning of Insurance Regulatory and Development Authority of India (''IRDAI'') as a corporate agent.

In terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations), the Company is categorized as High Value Debt Listed entity (''HVD). The Company has been classified as Upper Layer NBFC under the Reserve Bank of India (''RBI) Scale Based Regulations.

Financial results

The key highlights of the financial results for FY2024 are given below:

(C in crore)

Particulars	FY2024	FY2023	% change over FY2023
Total income	7,618	5,665	34%
Interest and Finance charges	4,693	3,211	46%
Net total income	2,925	2,454	19%
Total operating expenses	703	630	12%
Pre-impairment operating profit	2,222	1,824	22%
Impairment on financial instruments	61	124	(51%)
Profit before tax (PBT)	2,161	1,700	27%
Profit after tax (PAT)	1,731	1,258	38%
Retained earnings as at the beginning of the year	2,335	1,325	76%
Profit after tax	1,731	1,258	38%
Other comprehensive income on defined benefit plan	(1)	4	(125%)
Retained earnings before appropriations	4,065	2,587	57%
Appropriations
Transfer to reserve fund u/s 29C of the NHB Act, 1987	346	252	37%
Retained earnings as at the end of the year	3,719	2,335	59%

Due to rounding off, numbers presented in above table may not add up precisely to the totals provided.

Working results of the Company

• Asset Under Management (AUM) as on 31 March 2024 was C 91,370 crore as compared to C 69,228 crore as on 31 March 2023, representing an increase of 32 % over the previous year.

• Loan receivables as on 31 March 2024 was C 79,301 crore as compared to C 62,114 crore as on 31 March 2023, an increase of 28 % over the previous year.

• Total income during FY2024 increased to C 7,618 crore from C 5,665 crore during FY2023 registering a growth of 34 % over the previous year.

• Total operating cost to net total income has decreased to 24.0 % from 25.7 % in FY2024.

• Impairment on financial instruments was C 61 crore. The Company holds management and macro-economic overlay of C 94 crore as at 31 March 2024.

• The Company ended FY2024 with a Gross NPA of 0.27 % and Net NPA of 0.10 % as against 0.22 % and 0.08 % respectively for FY2023.

• Profit before tax for FY2024 was C 2,161 crore as against C 1,700 crore for FY2023, an increase of 27 % over the previous year.

• The profit after tax for FY2024 was C 1,731 crore as compared to C 1,258 crore for FY2023, an increase of 38 % over the previous year. This is mainly due to the Company''s healthy net interest margin, operating efficiencies and prudent risk management.

Share capital

a. Increase in Authorised Share Capital of the Company

The Shareholders of the Company at their Extra Ordinary General Meeting held on 24 April 2024 have approved the increase in authorized share capital from C 80,000,000,000 divided into 8,000,000,000 Equity shares of face value of C 10/- each to C 90,000,000,000 divided into 9,000,000,000 Equity shares of face value of C 10/- each.

b. Allotment of Equity shares through Rights Issue

On 3 April 2024, the Special Committee for Rights Issue constituted by the Board of Directors has allotted, on rights basis, 1,107,419,709 equity shares of face value of C 10/- each at premium of C 8.06 per equity share, aggregating to ~ C 2000 crore, to Bajaj Finance Limited.

Pursuant to the said allotment, the total issued and paid-up capital of the Company as on date is C 7,819.57 crore comprising of 7,819,575,273 equity shares of face value of C 10/- each fully paid-up.

During FY2024, the Company has not issued any convertible securities and there are no outstanding convertible securities as on 31 March 2024.

Dividend

Considering the capital-intensive nature of the business, the business plan of the Company and with a view to plough back the profits, your Board has not recommended dividend for consideration of the members at the ensuing Annual General Meeting (''AGM) in order to build a strong base for its long-term growth.

Transfer to Reserve Fund

Under section 29C of the National Housing Bank Act, 1987, Housing Finance Companies (''HFCs) are required to transfer a sum not less than 20% of their net profit every year to their reserve fund before declaration of any dividend. The Company has transferred a sum of C 346.25 crore to reserve fund, which is 20% of its net profit.

Pursuant to provisions of Companies Act, 2013 (the ''Act) read with relevant rules thereunder, the Company, being an HFC, is exempt from creating a debenture redemption reserve in respect of privately placed debentures including the requirement to invest up to 15% of the amount of debentures maturing during the next financial year. However, the Company maintains sufficient liquidity buffer to fulfil its obligations arising out of debentures. In case of secured debentures, an asset cover of at least 100% is maintained at all times.

Scale Based Regulations

The Reserve Bank of India issued a circular on "Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs" on 22 October 2021 (''SBR Framework). As per the SBR framework, based on size, activity, and risk perceived, NBFCs are categorised into four layers, NBFC - Base Layer (NBFC-BL), NBFC - Middle Layer (NBFC-ML), NBFC - Upper Layer (NBFC-UL) and NBFC - Top Layer (NBFC-TL). The RBI has categorised Bajaj Housing Finance Limited as an NBFC - Upper Layer (NBFC-UL) vide its press release dated 30 September 2022 and subsequently on 14 September 2023.

Listing

Pursuant to press release dated 30 September 2022 issued by the Reserve Bank of India ("RBI"), the Company was classified by the RBI as an NBFC - Upper Layer, thereby necessitating a requirement for the Company to be mandatorily listed on or before September 30, 2025. In order to comply with the regulatory timelines stipulated under the regulations applicable to companies classified as NBFC - Upper Layer, the Board of Directors at their meeting held on 24 April 2024 has given its approval for commencing the Initial Public Offering (''IPO) process including evaluation of various options subject to prevailing market conditions with respect to mandatory listing requirements by constituting an IPO Committee.

In view of the same, the Board of Bajaj Finance Ltd. (''BFL) at their meeting held on 25 April 2024 have also agreed to participate in the IPO through the Offer for Sale (''OFS) mechanism as per the SEBI Regulations.

The quantum and percentage of OFS to be offered is under evaluation and will be determined in consultation with the Board of BHFL, merchant bankers and other market intermediaries, based on various strategic considerations and market conditions.

Operations of the Company

Details regarding the operations of the Company and its state of affairs are covered in the ''Management Discussion and Analysis Report''.

Corporate Agent

The Company has received Certificate of Registration from the Insurance Regulatory and Development Authority of India (''IRDAI'') to act as Corporate Agent (Composite) with validity of three years from 22 December 2023 to 21 December 2026.

Borrowings

The overall borrowing limit of the Company has been increased to C 1,00,000 crore by the shareholders at their Extra Ordinary General Meeting held on 19 May 2023.

As on 31 March 2024, the borrowings of the Company stood at C 69,129 crore. During FY2024, the Company has issued non-convertible debenture (NCDs) to the tune of C 8,602 crore (face value) and redeemed NCDs to the tune of C 4,300 crore (face value). Further, Company has also issued Commercial Papers (CPs) to the tune of C 7,600 crore (face value) and redeemed CPs to the tune of C 5,275 crore.

As per the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulations) Directions 2023, the Company was required to maintain a minimum Liquidity Coverage Ratio (LCR) of 85% from 1 December 2023 onwards. The daily average LCR of the Company during Q4 and for FY2024 stood at 142.62% and 131.38% respectively.

Subsidiaries, Associates and Joint Ventures

The Company does not have any subsidiary, associates, or joint ventures. Accordingly, the requirement of attaching form AOC-1 is not applicable to the Company.

SEBI vide its notification dated 7 September 2021 has amended the SEBI Listing Regulations requiring High Value Debt Listed Companies to adopt a policy for determining material subsidiaries.

The Company''s policy for determination of material subsidiary, as adopted by the Board of Directors, in conformity with regulation 16 of the SEBI Listing Regulations, can be accessed on the Company''s website at https://www.bajajhousingfinance.in/documents/37350/53075/annexure 3? policy for determining material subsidiaries.pdf

Further, the net worth of the Company exceeds 10% of the consolidated net worth of the immediately preceding accounting year of both Bajaj Finance Ltd. (''BFL) and Bajaj Finserv Ltd. (''BFS); and therefore, it is classified as material subsidiary of both the Companies.

Directors and Key Managerial Personnel (KMP)

As on 31 March 2024, the Board consisted of six Directors of whom three are Independent Directors. On 1 April 2024, two of the Independent Directors are also an independent director on the Board of the holding company viz., BFL.

A. Change in Directorate:

i. Appointment

Jasmine Chaney (DIN: 07082359)

On recommendation of the Nomination and Remuneration Committee (''NRC), the Board has appointed Jasmine Chaney as a Woman Independent Director of the Company for a period of 5 consecutive years effective from 1 April 2023. The same has been approved by the members vide their special resolution dated 19 May 2023.

The Board is of the opinion that Jasmine Chaney is a person of integrity, expertise, and possess competent experience and proficiency to serve the Company as an independent director that can strengthen the overall composition of the Board.

Jasmine Chaney has successfully completed the online proficiency self-assessment test as required under the provisions of rule 6(4) of the Companies (Appointment and Qualifications of Directors)

Rules, 2014, as amended.

She is a member of the Audit Committee, Risk Management Committee and IT Strategy Committee.

B. Directors liable for rotation:

Rajeev Jain, (DIN: 01550158) retires by rotation at the ensuing AGM, and being eligible, offers himself for re-appointment as a Non-Executive Director.

Brief details of Rajeev Jain, who is seeking re-appointment, are given in the Notice of sixteenth AGM.

C. Key Managerial Personnel (KMP):

During FY2024, there was no change in KMP.

D. Continuation of non-retiring director:

SEBI vide its notification dated 14 June 2023, amended SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 effective from 15 July 2023. Pursuant to said notification a new sub-regulation 17(1D) was inserted which provided that with effect from 1 April 2024, the continuation of a director serving on the Board of a listed entity shall be subject to the approval by the shareholders in a general meeting at least once in every five years.

Further, any Director serving on the board as on 31 March 2024, without the approval of the shareholders for the last five years or more shall be subject to the approval of shareholders in the first general meeting to be held after 31 March 2024.

The shareholders at their meeting held on 15 June 2022 have appointed Sanjiv Bajaj (DIN: 00014615),

Non- Executive Director as a director not liable to retire by rotation pursuant to provisions of the Companies Act, 2013. He continues on the Board as a non-executive director not liable to retire by rotation.

A brief profile of directors is available on the website of the Company at https://www.bajajhousingfinance. in/directors-board.

Declaration by Independent Directors

All the Independent Directors have submitted a declaration of independence, stating that they meet the criteria of independence provided under section 149(6) of the Act read with regulation 16 of the SEBI Listing Regulations, as amended. They also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of Independent Directors.

The Board took on record the declaration and confirmation submitted by the Independent Directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the SEBI Listing Regulations.

Remuneration Policies

a. Policy on Directors'' Appointment and Remuneration

Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule II of the SEBI Listing Regulations, the Board has framed a remuneration policy. This policy, inter alia, lays down:

a) The criteria for determining qualifications, positive attributes and independence of directors; and

b) Broad guidelines of compensation philosophy and structure for Non-Executive Directors, key managerial personnel and other employees.

In view of detailed RBI Guidelines for NBFCs concerning compensation of Key Managerial Personnel and Senior Management (''SMT''), the Company has adopted a specific policy to this effect. Accordingly, this remuneration policy has to be read along with the specific policy adopted pursuant to RBI Guidelines as regards compensation of KMPs and SMTs, which is detailed below.

b. Policy for Compensation of KMP and SMT pursuant to the RBI Guidelines

The RBI has vide its circular dated 29 April 2022 issued Guidelines on Compensation of Key Managerial Personnel and Senior Management in NBFCs pursuant to Scale Based Regulatory Framework. Accordingly, the Company has adopted a Board approved policy exclusively governing compensation payable to KMP and SMT. This policy lays down detailed framework, inter alia, encompassing the following:

• Principles of Compensation;

• Compensation Components;

• Principles of Variable pay;

• Deferral of variable pay;

• Compensation for Control and assurance function personnel;

• Provisions for Malus and Clawback and circumstances under which application of Malus and Clawback is to be considered.

The Board at its meeting held on 24 April 2024 amended the policy to provide the reference of the Company''s ESOP scheme.

The aforesaid policies can be accessed at https://www.bajajhousingfinance.in/documents/37350/53075/ Remuneration Policy - Companies Act.pdf and https://www.bajajhousingfinance.in/ documents/37350/53075/Remuneration policy - RBI.pdf.

During FY2024, there were no pecuniary relationship/transactions of any of the Non-Executive Directors with the Company apart from sitting fees and profit linked Commission, payable to them as directors.

Formal annual evaluation of the performance of the Board, its Committees and Directors

Pursuant to Section 178 of the Act, the Board decided that the evaluation shall be carried out by the Board and the NRC shall only review its implementation and compliance.

Further as per Schedule IV of the Act and provisions of the SEBI Listing Regulations, the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director being evaluated, on the basis of performance and fulfillment of criteria of independence and their independence from management.

Based on the report of the performance evaluation, it shall be determined whether to extend or continue the term of appointment of Independent Director.

Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its Committees, Chairperson and Individual Directors.

The manner in which formal annual evaluation of performance was carried out by the Board for FY2024 is given below:

• The NRC at its meeting held on 15 March 2024, reviewed the criteria for performance evaluation.

• Based on the said criteria, a questionnaire-cum-rating sheet was deployed using an IT platform for seeking feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and individual directors. As advised by the NRC and Board, an option for qualitative feedback, was introduced.

• From the individual ratings received from the directors, a report on summary of ratings in respect of performance evaluation of the Board, its Committees, Chairperson and individual directors for the year 202324 and a consolidated report thereof was arrived at.

• The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on 15 March 2024.

• The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting held on 15 March 2024.

• Based on the report and evaluation, the NRC and Board at their respective meetings held on 15 March 2024, determined that the appointment of all Independent Directors may continue.

• Details on the evaluation of Board, Non-Independent Directors and Chairperson of the Company as carried out by the Independent Directors at their separate meeting held on 15 March 2024 have been furnished in a separate paragraph elsewhere in this report.

• During FY2024, the process followed by the Company was reviewed by the NRC, which opined these to be in compliance with the applicable provisions and found it to be satisfactory.

Other than the Chairman of the Board and NRC, no other Director has access to the individual ratings given by directors.

Meeting of Independent Directors

Pursuant to Section 149(8) read with Schedule IV of the Act, and Regulation 25(3) of SEBI Listing Regulations, the Independent Directors shall hold at least one meeting in a financial year without the presence of Non-Independent Directors and members of the management. The meeting of Independent Directors of the Company was held on 15 March 2024. Anami N Roy chaired the said meeting.

The Independent Directors at the meeting, inter alia:

• noted the report of performance evaluation of the Board & its Committees for the year 2023-24.

• reviewed the performance of Non-Independent Directors and the Board as a whole.

• reviewed the performance of the Chairman of the Board taking into account the views of executive directors and non-executive directors; and

• assessed the quality, quantity and timeliness of flow of information between the Company''s Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Number of Board Meetings

The Board met five times during FY2024 on 24 April 2023, 24 July 2023, 16 October 2023, 25 January 2024 and 15 March 2024. The gap between any two consecutive meetings was less than one hundred and twenty days.

Directors'' Responsibility Statement

The financial statements are prepared in accordance with the Indian Accounting Standards (''Ind AS'') under historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values pursuant to the provisions of the Act and guidelines issued by the SEBI/RBI/NHB. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy. These form a part of the notes to the financial statements.

In accordance with the provisions of section 134(3) (c) of the Act, the Directors state that:

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

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for FY2024;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

Audit Committee

The Company has an Audit Committee fulfilling the requirements under the Act, RBI Master Direction -NonBanking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 ("RBI Regulations") and SEBI Listing Regulations.

The Committee comprises of Anami N Roy (DIN: 01361110), Chairman, Dr. Arindam Kumar Bhattacharya (DIN: 01570746), Rajeev Jain (DIN: 01550158), Jasmine Chaney (DIN: 07082359).

The composition of Audit Committee is over and above the minimum requirement prescribed under the Act,

SEBI Listing Regulations, and RBI Regulations of having a minimum of two-thirds of Independent Directors, including the Chairman. All members of the Committee are considered financially literate and are deemed to have necessary accounting or financial management related expertise in terms of SEBI Listing Regulations.

All recommendations of the Audit Committee were accepted by the Board.

The composition, brief terms of reference and attendance record of members are given in the Corporate Governance Report.

Nomination and Remuneration Committee

The Company has a Nomination and Remuneration Committee fulfilling the requirements prescribed under the Act, RBI Regulations and SEBI Listing Regulations.

The Committee comprises of Dr. Arindam Kumar Bhattacharya (DIN: 01570746), Chairman, Anami N Roy (DIN: 01361110), Rajeev Jain (DIN: 01550158).

The composition, brief terms of reference and attendance record of members are given in the Corporate Governance Report.

Risk Management Committee

The Company has a Risk Management Committee fulfilling the requirements prescribed under the Act, RBI Regulations and SEBI Listing Regulations.

The Committee comprises of Dr. Arindam Kumar Bhattacharya (DIN: 01570746), Chairman, Sanjiv Bajaj (DIN:00014615), Anami N Roy (DIN: 01361110), Rajeev Jain (DIN: 01550158), Atul Jain (DIN:09561712), Jasmine Chaney (DIN: 07082359), Niraj Adiani, Gaurav Kalani, Vijay Solanki and Ajita Kakade.

The composition of Risk Management Committee is as per the requirement prescribed under the SEBI Listing Regulations, and the RBI Regulations. The Committee consists of ten members with majority of them being members of the Board of Directors, including an Independent Director. The Chairperson of the Committee is a member of the Board of Directors.

The Board of Directors have adopted a risk management policy for the Company under which management identifies and controls risks through a properly defined framework in terms of the aforesaid policy.

The composition, brief terms of reference and attendance record of members are given in the Corporate Governance Report.

Particulars of Loans, Guarantees and Investments

The Company, being a housing finance company registered with the NHB and engaged in the business of providing loans in ordinary course of its business, is exempt from complying with the provisions of section 186 of the Act with respect to loans. Accordingly, the Company is exempted from complying with the requirements to disclose in the financial statement the full particulars of the loans given, investment made, guarantee given, or security provided.

Employee Stock Options (''ESOP'')

The Board of your Company at its meeting held on 24 April 2024 approved the first ever Employee Stock Option Scheme of the Company. Thereafter, the shareholders at its meeting dated 24 April 2024 through special resolution approved the said scheme.

Through the scheme, the Company offers stock options to eligible employees of the Company. Because of their nature, stock options help to build a holistic, long- term view of the business and a sustainability focus among the Senior Management team. Options are granted to tenured employees in managerial and leadership positions upon achieving defined thresholds of performance and leadership behaviour. Grant of stock options also allows

the Company to maintain the right balance between fixed pay, short-term incentives and long-term incentives to effectively align with the risk considerations and build the focus on consistent long-term results.

Material Changes and Commitments

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

Conservation of Energy

Though the operations of the Company are not energy intensive, the Company implements various energy conservation measures across all its functions, verticals and value chain partners. Key initiatives of the Company include the following:

• Switching from conventional lighting system to LED lights at most of the branches in metro areas;

• Selecting and designing offices to facilitate maximum natural light utilization; and

• Use of cloud based virtual servers to increase energy efficiency and data security.

• The company has adopted strategy to minimize usage of non-production workload during night hours which helps in cost optimization and reduce greenhouse effect.

Technology Absorption

The Company adopts technologies for acquisition and servicing. The Company host entire enterprise IT ecosystem on cloud leading to flexible architecture for its business applications, data warehousing and analytics. It enables performance, scalability, cost effective and secure architecture. The Company has improvised its stack of web-based applications compatible across computing devices enabling mobility along with API gateways for seamless integration.

The company continues to strengthen Information Security posture through increased monitoring over attack surface, fine tuning processes and by proactively mitigating identified gaps.

The Company has also improvised productivity in areas of business operations and customer service by leveraging robotic process automation and artificial intelligence coupled with machine learning.

Foreign Exchange Earnings and Outgo

During FY2024, the Company did not have any foreign exchange earnings in terms of actual inflow and the foreign exchange outgo in terms of actual outflow amounted to C 20.18 lakh.

Corporate Social Responsibility (CSR)

The CSR Committee comprises of three directors viz. Anami N Roy (Chairman) (DIN: 01361110), Sanjiv Bajaj (DIN: 00014615) and Rajeev Jain (DIN: 01550158).

The CSR interventions for the year focused on youth skilling for employment, livelihood initiatives, child education, child health, child protection and inclusion for persons with disability. The salient features of the CSR Policy and impact assessment report forms part of the Annual Report on CSR activities. The CSR policy has been hosted on the website of the Company and can be accessed at https://www.bajajhousingfinance.in/ documents/37350/5324874/CSR Policy.pdf.

''Bajaj Beyond'' is the Group''s new identity for all its Corporate Social Responsibility and charitable programmes with focus on youth skilling. The initiatives aim to benefit the youth and enable them to take advantage of employment and entrepreneurial opportunities offered by India''s growing economy in the years to come. Pursuant to Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual Report on CSR activities is annexed to this Report.

The CSR obligation of the Company for FY2024 is C 20.67 crore. As on 31 March 2024, the Company has fully spent the CSR obligation for FY2024.

Further, the Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2024.

Annual Return

A copy of the annual return as provided under section 92(3) of the Act, in the prescribed form, which will be filed with the Registrar of Companies/MCA, is hosted on the Company''s website and can be accessed at https://www.bajajhousingfinance.in/annual-reports

Risk Management

The Board of Directors have adopted a Risk Management Policy for the Company which provides for identification of key events/risks impacting the business objectives of the Company and attempts to develop risk policies and strategies to ensure timely evaluation, reporting and monitoring of key business risks.

This framework, inter alia, provides the set of components that provide the foundations and organizational arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management throughout the organization. It covers principles of risk management, risk governance with roles and responsibilities, business control measures, principle risks and business continuity plan. The Management identifies and controls risks through a defined framework in terms of the aforesaid policy.

The Board is of the opinion that there are no elements of risk that may threaten the existence of the Company.

The RBI, vide its circular dated 22 October 2020, reviewed the regulatory framework for HFCs wherein, all nondeposit taking HFCs with asset size of more than C 100 crore shall pursue liquidity risk management which, inter alia, should cover adherence to gap limits. The Board has in place a Liquidity Risk Management framework encompassing, inter alia, strategies and practices, internal controls, maturity profiling, liquidity coverage ratios and high-quality liquid assets.

Pursuant to RBI Scale based framework, NBFCs are required to have an Internal Capital Adequacy Assessment Process (''ICAAP'') in place. The objective of ICAAP is to ensure availability of adequate capital to support all risks in business as also to encourage NBFCs to develop and use better internal risk management techniques for monitoring and managing their risks. Accordingly, the Company has framed a ICAAP policy. This policy is developed considering the requirements of the SBR and is based on the Pillar -2 requirements under Basel III Framework developed by the Basel Committee on Banking Supervision (BCBS).

The objective of the policy is to provide an ongoing assessment of the Company''s entire spectrum of risks and the methodology to assess current and future capital, reckoning other mitigating factors and also to assist and apprise the Board on these aspects and on Company''s ICAAP and Company''s approach to capital management.

In terms of NHB Circular on Risk Management System - Appointment of Chief Risk Officer dated 29 May 2019, the Committee also has an independent meeting with the Chief Risk Officer without the presence of management.

More detailed discussion on the Company''s risk management and portfolio quality is covered in the Management Discussion and Analysis Report.

Significant and Material Orders Passed by the Regulators and Courts

During FY2024, there were no significant or material orders passed by any regulator or court or tribunal impacting the going concern status or the Company''s operations in future.

Internal Audit

Internal Audit function provides an independent view to Audit Committee on the quality and efficacy of the internal controls, governance systems and processes.

In line with the RBI''s guidelines on Risk Based Internal Audit (RBIA), the Company has adopted a Risk Based Internal Audit policy.

Pursuant to RBIA framework, Internal Audit is aligned in such a manner that assurance is provided to the Audit Committee and Board of Directors on quality and effectiveness of the internal controls, and governance related systems and processes.

At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. The Audit Committee regularly reviews the internal audit reports along with the corrective and preventive actions thereon. Significant audit observations, corrective and preventive actions thereon are presented to the Audit Committee on a quarterly basis.

The Committee also has an independent meeting with the internal auditor without the presence of management. As per RBI guidelines, quality assurance and improvement program (''QAIP'') is required to be carried out at least once a year covering all aspects of internal audit function. Accordingly, QAIP was carried out by an external agency for FY2023 to assess functioning of the internal audit function, adherence to the internal audit policy, objectives and expected outcomes. Similarly, QAIP for FY2024 will be carried out by an external auditing partner.

Internal Financial Controls

The Company has in place Internal Financial Control considering the essential components of various critical processes, physical and operational, which also includes its design, implementation, and maintenance along with periodical internal review of operational effectiveness and sustenance. The Company has in place adequate financial controls commensurate with its size, scale and complexity of operations. These have been designed with the aim to provide reasonable assurance regarding recording and providing financial information, ensuring integrity in conducting business, accuracy and completeness in maintaining accounting records, prevention and detection of frauds and errors.

The Audit Committee and Board reviewed the Internal Financial Control and are of the opinion that internal financial controls with reference to the financial statements are adequate and operating effectively.

Information System Audit

In terms of RBI Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices dated 7 November 2023, the Company is required to put in place IS Audit Policy which shall inter alia contain a clear description of its mandate, purpose, authority, audit universe, periodicity of audit etc. Accordingly, the Company has adopted a Board approved IS Audit Policy at its meeting held on 15 March 2024.

During the year under review, an IT system audit was conducted by a CERT-in empaneled audit firm (Ernst & Young). The areas audited were IT General Controls, Cyber Security Controls and Information Security Controls aligned with ISO 27001 and the regulatory framework applicable to the Company.

Audit revealed no major observations. Necessary continuous improvement actions have been taken in line with the audit observations. ISO transition and re-certification audit with latest ISO standard was conducted by BSI. We have successfully re-certified with latest ISO standard and received ISO 27001-2022 certificate.

Information Technology Governance, Business Continuity and Cyber Security

The RBI has issued Master Direction on Information Technology Governance, Risk, Controls and Assurance Practices dated 7 November 2023 effective 1 April 2024. In line with said Directions, the terms of reference of the IT Strategy Committee were revised during the year. The same, inter alia, includes the following:

• Review at least on annual basis, the adequacy and effectiveness of the Business Continuity Planning and Disaster Recovery Management;

• Review the assessment of IT capacity requirements and measures taken to address the issues;

• Approve documented standards and procedures for access to information assets; and

• Decide constitution of Information Security Committee (ISC), with Chief Information Security Officer (CISO) and other representatives from business and IT functions, etc.

Detailed terms of reference can be accessed at https://www.bajajhousingfinance.in/ documents/37350/5324874/Terms of Reference.pdf.

The IT Strategy Committee met thrice during the year under review.

In terms of the aforementioned Directions, w.e.f. 1 April 2024 Committee shall meet at least on a quarterly basis.

Pursuant to the said Directions, the Company has appointed a Chief Information Security Officer (CISO) who shall be responsible for driving cyber security strategy and ensuring compliance to the extant regulatory/ statutory instructions on information/cyber security and other roles and responsibilities as stipulated therein.

In accordance with IT Governance framework, the Company has put in place policies which, inter alia, includes Business Continuity Policy, Information Security Policy, Information Technology Policy, Cyber Security Policy, IT Outsourcing Policy, Cyber Crisis Management Plan, Information Security Incident Management Policy.

The IT Strategy Committee has also constituted the IT Steering Committee and Information Security Committee consisting of senior executives of the Company in accordance with the RBI Directions. The role of IT Steering Committee is to assist the IT Strategy Committee in strategic IT planning, oversight of IT performance, and aligning IT activities with business needs, ensuring implementation of a robust IT architecture meeting statutory and regulatory compliance. The Information Security Committee is constituted for managing cyber/ information security under the oversight of IT Strategy Committee comprising of Chief Information Security Officer (CISO) and other representatives from business(es), finance and IT functions headed by personnel from risk management vertical.

To enable user to work from home in secure manner, the Company implemented VPN functionality. The Company also enabled remote access for identified partners to enable full resources for user support, cloud support, application maintenance and testing using privilege access management technology connecting to the Company servers. Cloud infrastructure has been built with DR capabilities and is capable of running applications during any disaster situation.

The Company''s cloud first IT strategy helps to manage the demand with elastic scalability and rapid provisioning while reducing total cost of ownership and turnaround time.

The Company''s Cyber security strategy consists of a plan of actions designed to improve the security and resilience of cloud infrastructures and services. It is a high-level top-down approach to cyber security that establishes a range of organization objectives and priorities that should be achieved in a specific timeframe.

As a critical component in cyber security, the Company is working on improving awareness among employees using a learning platform and simulation exercises.

The Company has a documented Business Continuity Management Policy which has been designed to ensure continuity of critical processes during any disruption. A robust Disaster Recovery framework has been put in place to manage business and technology interruption risk, minimize interruptions in operations and service to customers.

During the year under review, the Directors were briefed and appraised on cyber security. These, inter alia, involved understanding of cyber security incidents and industrialization of cybercrime operations, assessing new developments and issues relating to cyber and information security, understanding of cyber security trends including recent cyber frauds and attacks, Board''s responsibility in the events of change management, Board oversight responsibility for cyber security, etc. Further, on an annual basis, the senior management of the Company have undergone IT security trainings.

Whistle-Blower Policy/ Vigil Mechanism

The Company has a whistle-blower policy encompassing vigil mechanism pursuant to the requirements of the Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations and Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations, 2015.

The whistle-blower framework has been introduced with an aim to provide employees, directors and value chain partners with a safe and confidential channel to share their inputs about such aspects which are adversely impacting operations of the Company. The policy/vigil mechanism enables directors, employees and value chain partners to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy and leak or suspected leak of unpublished price sensitive information.

Concerns may be reported anonymously either through e-mail or through a ''Confidential Feedback Mechanism'', which is reviewed by a Whistle-Blower Committee comprising senior management from within and outside the organization. The Audit Committee reviews the functioning of the vigil mechanism/whistleblower policy once a year. It provides safeguards against victimization of directors/employees/ value chain partners who avail the mechanism and allows for direct access to the Chairperson of the Audit Committee by writing to [email protected].

Policy has been hosted on the Company''s website and can be accessed at https://www.bajajhousingfinance.in/ documents/37350/53075/vigil mechanism policy.pdf

Employees of the Company are required to undergo mandatory online learning module on code of conduct which includes whistle-blower policy and affirm that they have understood and are aware of vital aspects of the policy.

During FY2024, no person was denied access to the Audit Committee or its chairperson under this policy and 4 complaints were received under the vigil mechanism of the Company which have been investigated and addressed as per the policy of the Company.

Business Responsibility and Sustainability Report (''BRSR'')

Pursuant to the SEBI circular dated 10 May 2021 and amendment in SEBI Listing Regulations, top 1000 listed entities based on market capitalisation are required to submit Business Responsibility and Sustainability report with effect from FY2023. The Company has voluntarily prepared BRSR for FY2024 and obtained limited assurance on BRSR and GHG data. The Company has appointed DNV Business Assurance India Pvt. Ltd. as an assurance provider for carrying out the limited assurance for BRSR (including GHG data) for FY2024. The Company has adopted a Policy for Responsible and Sustainable Business Conduct which covers all the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC). The BRSR in the format prescribed by SEBI is annexed to the Annual Report. The detailed ESG Report describing various initiatives, actions, and process of the Company towards the ESG endeavour can be accessed at https://www.bajajhousingfinance.in/annual-reports.

Changes to the Constitutional Documents

a. Memorandum of Association

The members vide special resolution dated 19 May 2023 had approved an amendment to the Memorandum of Association (''MoA'') by insertion of Clause 7A. The clause provides for carrying on the business of advertising contractors and agents to acquire and dispose of advertising time, space or opportunities in any media, to undertake advertising and promotional campaigns of every nature, to acquire and provide promotional requisites.

The Members also vide ordinary resolution dated 24 April 2024 had approved an increase in authorised share capital of the Company from C 8000 crore to C 9000 crore. Consequent to the increase in authorised share capital, the clause V of Memorandum of Association stands altered to reflect the change in authorised share capital.

b. Articles of Association

Securities and Exchange Board of India (SEBI) vide its notification dated 2 February 2023 amended SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 by inserting sub-regulation (6) in regulation 23 which mandates an issuer to ensure that its Articles of Association (''AoA'') require its Board of Directors to appoint a person nominated by the Debenture Trustee(''DT'') upon occurrence of any of the events of default as per regulation 15(1)(e) of the SEBI (Debenture Trustees) Regulations, 1993 (''DT Regulations''). In order to comply with above requirements, the AOA of the Company was amended to enable DT to appoint their Nominee on the Board upon occurrence of any of the event specified in regulation 15(1) (e) of the DT Regulations vide special resolution passed by shareholders on 24 July 2023.

Corporate Governance

In terms of the SEBI Listing Regulations, a separate section titled ''Report on Corporate Governance'' has been included in this Annual Report, along with the Management Discussion and Analysis Report and General Shareholder Information.

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

A certificate from Statutory Auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.

Secretarial Standards

The Company has complied with the requirements prescribed under the Secretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2) read with the MCA Circulars.

Auditors and Auditors'' Report Statutory auditors

In line with the RBI guidelines, the Board of Directors, based on the recommendation of the Audit Committee at its meeting held on 25 October 2021, approved appointment of M/s. Khandelwal Jain & Co. (Firm Registration No. 105049W) and M/s. G D Apte & Co. (Firm Registration No. 100515W) as Joint Statutory Auditors of the Company for a consecutive period of three years to conduct audit of the financial statements of the Company for the financial years 2022, 2023 and 2024. The said appointment was also approved by the shareholders.

The audit report by M/s. Khandelwal Jain & Co. and M/s. G D Apte & Co., for FY2024 is unmodified, i.e., it does not contain any qualification, reservation, adverse remark or disclaimer.

In terms of the Master Direction - Non Banking Financial Company - Housing Finance Company (Reserve Bank) Direction, 2021, Joint Statutory Auditors have submitted an additional report dated 24 April 2023 and 24 April 2024, for FY2023 & FY2024 respectively. There were no comments or adverse remarks in the said report.

In line with the RBI guidelines, the Board of Directors, based on the recommendation of the Audit Committee at its meeting held on 24 April 2024, approved appointment of M/s. Mukund M. Chitale & Co. (Firm Registration No. 106655W) and M/s. Singhi & Co. (Firm Registration No. 302049E) as joint statutory auditors of the Company for a consecutive period of three years.

At the ensuing AGM, approval of the members is being sought for their appointment as Joint Statutory Auditor for term of three years from the conclusion of the 16th AGM till the conclusion of the 19th AGM to audit the accounts of the Company i.e., for the financial year ending 31 March 2025, 31 March 2026 and 31 March 2027.

Secretarial auditor

Pursuant to the provisions of section 204 of the Act, the Board has appointed Shyamprasad D Limaye, practicing company secretary (FCS No. 1587, CP No. 572), to undertake secretarial audit of the Company. A report from the secretarial auditor in the prescribed Form MR-3 for the year ended 31 March 2024 is annexed to this Report.

Pursuant to Regulation 24A (2) of SEBI Listing Regulations, a report on secretarial compliance for FY2024 has been issued by Shyamprasad D Limaye and the same has been submitted with the stock exchange within the prescribed timelines. The said report is available on the website of the Company.

There are no observations, reservations, qualifications or adverse remark in any of the aforesaid report. The auditors, i.e., Statutory Auditors and Secretarial Auditors, have not reported any matter under section 143 (12) of the Act, and therefore, no detail is required to be disclosed under section 134(3) (ca) of the Act.

Other Statutory Disclosures

• There is no change in the nature of business of the Company during FY2024.

• The provisions of section 148 of the Act relating to cost accounts and cost audit are not applicable to the Company.

• During FY2024, no amount has remained unclaimed pursuant to debentures redeemed during the year.

• During FY2024, debentures of the Company were not suspended from trading on account of any corporate action or otherwise.

• Pursuant to Rule 2A 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 SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, shall not be considered as listed company in terms of the Act. Hence, Section 197 (12) read with rules 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable.

• Atul Jain, Managing Director is also eligible for grant of ESOPs of Bajaj Finance Limited, holding company and Bajaj Finserv Limited, ultimate holding company (herein after referred to as ''holding companies''), as per applicable SEBI regulations, performance criteria and compensation practices.

• The Company being a non-deposit accepting housing finance company, the provisions relating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable. The Board has also passed a resolution confirming non-acceptance of public deposits.

• The Company has no transaction that qualify under the contracts and arrangements with related parties referred in Section 188 (1) of the Act.

• For the details about the policy developed and implemented by the Company on CSR initiatives taken during the year, refer the Annual Report on CSR activities annexed to the Report.

• The Company has a policy on prevention of sexual harassment at the workplace. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The number of complaints received, disposed off and pending during FY2024 is given in the annexed ''Corporate Governance Report''.

• The Company has not defaulted in repayment of loans from any banks and financial institutions. There were no delays or defaults in payment of interest/principle of any of its debt securities.

• SEBI vide its circular SEBI/HO/DDHS/DDHS-RAC-1/P/CIR/2023/176 dated 8 November 2023 (''the Circular''), has prescribed the procedural framework for dealing with unclaimed interest and redemption amounts lying with entities having listed non-convertible securities and manner of claiming such amounts by investors.

The circular requires such companies to formulate a policy specifying the process to be followed by investors for claiming their unclaimed amounts. Accordingly, a policy titled ''Policy for claiming unclaimed amounts with respect to Non-Convertible Debentures from Escrow Account'' has been framed by the Company.

The policy can be accessed at https://www.bajajhousingfinance.in/documents/37350/53075/BHFI Policy for unclaimed amounts-NCDs %781 %29.pdf. The Company Secretary has been designated as the Nodal Officer for the purposes of this circular. As on 31 March 2024, there is no amount remaining unclaimed in respect of non-convertible debentures.

• Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 against the Company.

• During FY2024, there was no instance of one-time settlement with Banks or Financial Institutions

• The Company has issued a formal letter of appointment to Independent Directors in the manner provided under the Act.

• Disclosures pursuant to the RBI Master Directions, unless provided in the Directors'' Report, form part of the notes to the standalone financial statements and Report on Corporate Governance.

• For FY 2024, the Company did not have any ESOP scheme. Being subsidiary of Bajaj Finance Limited, holding company and Bajaj Finserv Limited, ultimate holding company (herein after referred to as ''holding companies''), employees of the Company are eligible for stock options of holding companies.

• The Company has complied with Section 62(1) (a) of Companies Act, 2013 and applicable rules thereunder while issuing fresh equity shares under Rights issue.

• The Company has in place various Board approved policies pursuant to Companies Act, 2013, SEBI Regulations, RBI/NHB Directions and other regulations. These policies are reviewed from time to time keeping in view the operational requirements and the extant regulations. The Report on Corporate governance contains web-link for policies hosted on website.

Acknowledgement

The Board places its gratitude and appreciation for the support and co-operation from its members, the Reserve Bank of India, the National Housing Bank, the IRDAI and other regulators, banks, financial institutions and trustees for debenture holders.

The Board also places on record its sincere appreciation for the commitment and hard work put in by the Management and the employees of the Company.

On behalf of the Board of directors Sd/-

Sanjiv Bajaj

Chairman DIN: 00014615 Date: 24 April 2024