Bajaj Housing Finance Ltd

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:

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 March2025 was RS. 1,14,684 crore as compared to RS. 91,370 crore as on 31 March2024, representing an increase of 26% over the previous year.

• Loan receivables as on 31 March2025 was RS. 99,513 crore as compared to RS. 79,301 crore as on 31 March2024, an increase of 25% over the previous year.

• Total income during FY2025 increased to RS. 9,576 crore from RS. 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 RS. 80 crore. The Company holds macro-economic overlay of RS. 34 crore as at 31 March2025.

• 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 RS. 2,770 crore as against RS. 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 RS. 2,163 crore as compared to RS. 1,731 crore for FY2024, an increase of 25% over the previous year.

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 RS. 10/- each at premium of RS. 8.06 per equity share, aggregating to ~ RS. 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 RS. 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 RS. 70/- per equity share (including a share premium of RS. 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 RS. 10/- each at grant price of RS. 54.5/- per equity share (including a share premium of RS. 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 RS. 83,32,33,46,190 (8,33,23,34,619 Equity shares of RS. 10/- each).

During FY2025, the Company has not issued any convertible securities and there are no outstanding convertible securities as on 31 March2025.

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 RS. 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 RS. 3,560 crore and an offer for sale of RS. 3,000 crore, aggregating to RS. 6,560 crore. The equity shares were issued at a price of RS. 70/- per equity share (including a share premium of RS. 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 RS. 1,50,000 crore by shareholders at its Extra Ordinary General Meeting held on 6 June 2024.

The total borrowing as on 31 March2025 is RS. 82,071.94 crore. The break-up of the same is as under:

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 March2025 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.

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 reappointment.

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.

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 March2025.

• The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting held on 19 March2025.

• Based on the report and evaluation, the NRC and Board at their respective meetings held on 19 March2025, 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 March2025 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 NonIndependent Directors and members of the management. The meeting of Independent Directors of the Company was held on 19 March2025.

The Independent Directors at the meeting held on 19 March2025, 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 March2025. 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 -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 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 March2025, 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:

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 RS. 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 RS. 30.29 crore. As on 31 March2025, 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 nondeposit taking HFCs with asset size of more than RS. 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 March2024.

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 bhflacchairperson@bajajhousing.co.in.

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.

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 RS. 8,000 crore to RS. 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 March2025, 31 March2026 and 31 March2027.

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 March2025 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: S2016MRS.35900D) 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 March2025, has constituted a Customer Service Committee ('CSC') headed by an Independent Director.

The composition as on 31 March2025 is as follows:

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 nonacceptance 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 March2025, 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.