Dear Shareholders,

The Board of Directors of your Company ('the Board') is pleased to present the 16 th Annual Report of Aavas Financiers Limited ('the Company' / 'Aavas' / 'Your Company'), showcasing the operational achievements, financial performance, and strategic developments for the Financial Year ended March 31, 2026, together with the Audited Financial Statements.

The Board is pleased to report that Financial Year 2025–26 was a landmark year for the Company marked by the seamless transition of promoter ownership from Partners Group and Kedaara Capital to Aquilo House Pte. Ltd. part of the CVC Network, following the completion of the Share Purchase Agreements and open offer Transaction in June 2025, ensuring continuity of operations and reinforcing investor confidence. The closure of this transaction positions the Company for sustainable growth, strengthened governance, and long-term stability.

The Board of Directors of your Company ('the Board') is pleased to inform that, during the year under review, the Company's credit rating outlook was upgraded from Stable to Positive by both ICRA Limited and CARE Ratings Limited, reflecting the Company's robust financial performance, strengthened asset quality, prudent risk management practices, and consistent growth trajectory. This upgrade also underscores the confidence reposed by these rating agencies in the Company's business model, operational resilience, and its ability to sustain improved financial metrics going forward.

FINANCIAL PERFORMANCE AT A GLANCE

COMPANY BACKGROUND

Aavas is committed to enabling home ownership and entrepreneurial growth for families and small businesses across India. Its offerings include affordable housing loans, purchase construction loans, repair C renovation loans, loans against property, and MSME loans, designed to meet the aspirations of customers who often operate outside the formal income system.

Aavas operates as a Housing Finance Company ('HFC'), registered with the National Housing Bank ('NHB'). Its activities are regulated by the Reserve Bank of India ('RBI') under NHB's supervision, ensuring that every aspect of the Company's lending practices is guided by strong governance, compliance, and transparency. This regulatory foundation not only strengthens operational discipline but also reinforces customer trust, positioning Aavas as a secure and credible partner in affordable housing finance.

By adhering to NHB's regulatory framework and RBI's guidelines, Aavas not only safeguards the interests of its customers but also reinforces its commitment to responsible lending. With 435 branches across 13 states and 2 union territories, Aavas continues to strengthen its presence in emerging markets. This extensive reach ensures that customers benefit from proximity, accessibility, and reliable service delivery, reinforcing the Company's position as a leading player in affordable housing finance.

The Financial Performance for Financial Year 2025–26 is presented below in a concise summary table:

(? in crore)

The figures presented above have been drawn from the Company's financial statements, prepared in accordance with Indian Accounting Standards ('Ind AS') as notified under Sections 129 and 133 of the Companies Act, 2013 read together with the Companies (Accounts) Rules, 2014 and other applicable provisions of the Companies Act, 2013. Detailed financial statements are available in a dedicated section of this Annual Report.

Key Financial Benchmarks of the Company for the Financial Year 2025- 26

During the Financial Year 2025–26, your Company demonstrated sustained growth in income, reflecting its robust business model, prudent financial management, and continued focus on expanding its housing finance portfolio. The Company's income expansion underscores its ability to scale operations while maintaining financial stability and compliance with regulatory frameworks.

( in crore)

2,684.83

FY 2025-26 FY 2024-25

Income Growth Momentum Continues

Your Company's Total Income for the Financial Year 2025-26 ascended to ?2,684.83 crore as compared to ?2,358.42 crore in the previous Financial Year.

Operating G Earning Strength

For the year under review, the PBT increased to ?840.44 crore against ?732.59 crore in the previous Financial Year.

Moreover, the PAT closed at ?654.88 crore during the year as compared to ?574.11 crore in the previous Financial Year, reflecting a year-on-year growth, driven by prudent financial management.

DIVIDEND

Your Company remains committed to building sustainable long-term value for its Stakeholders. In view of the Company's growth aspirations and the need to further strengthen its financial base, the Board of Directors has not recommended any dividend for the Financial Year under review.

The profits generated during the year are proposed to be retained within the business to support future expansion, reinforce the balance sheet and enhance the Company's ability to capitalize on growth opportunities.

The Company has in place a Dividend Distribution Policy which lays down the framework for declaration and distribution of dividend. The Policy has been formulated in compliance with

Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI (LODR) Regulations, 2015') and the applicable provisions of the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Declaration of Dividends) Directions, 2025 and Reserve Bank of India (Housing Finance Companies) Directions, 2025. The Policy is available on the website of the Company at . and forms part of this Annual Report as ' Annexure-5' .

CAPITAL STRUCTURE: EOUITY BALANCE AND DEBENTURE COMPOSITION

Authorized Capital

The Authorized Share Capital of the Company stands at

? 85,00,00,000/- (Rupees eighty five crore only) divided into 8,50,00,000 (Eight crore fifty lakh) Equity Shares of

? 10/-(Rupees ten only) each as on March 31, 2026.

Issued, Subscribed G Paid-up Capital

At the beginning of the Financial Year under review, the issued, subscribed and paid-up share capital of the Company was

? 79,15,36,650/-(Rupees seventy nine crore fifteen lakh thirty six thousand six hundred and fifty only) divided into 7,91,53,665 (Seven crore ninety one lakh fifty three thousand six hundred and sixty five) Equity Shares of Face Value ?10/- (Rupees ten only) each.

During the year, the Company allotted 1,29,078 (One lakh twenty nine thousand and seventy eight) Equity Shares of face value of ?10/- (Rupees ten only) each pursuant to exercise of employee stock options by the eligible employees of the Company under Equity Stock Option Plans ('ESOPs') and Performance Stock Option Plans ('PSOPs') of the Company.

Accordingly, the issued, subscribed and paid-up share capital of the Company as at the end of Financial Year, increased and stood at ?79,28,27,430 (Rupees seventy nine crore twenty

Debentures

eight lakh twenty seven thousand four hundred and thirty only) divided into 7,92,82,743 (Seven crore ninety two lakh eighty two thousand seven hundred and forty-three) Equity Shares of Face Value ?10/- (Rupees ten only) each.

The equity shares of the Company are listed on BSE Limited ('BSE') and the National Stock Exchange of India Limited ('NSE') and continue to be traded on both the Stock Exchanges throughout the Financial Year, without any suspension.

The Company has issued secured non-convertible debentures as part of its borrowing policy, including debentures listed on BSE Limited as well as certain unlisted debentures. The details of the secured debentures outstanding as at March 31, 2026 are given below:

(? in crore)

Note: During the year, ISIN INE21CP0720S was fully redeemed on December 31, 2025.

During the year, your Company has issued debentures exclusively for the deployment of funds on its own balance sheet and not to facilitate resource requests of group entities/ parent company/ associates.

TRANSFER TO SPECIAL RESERVE (UNDER SECTION 2GC OF THE NATIONAL HOUSING BANK ('NHB') ACT, 1G87)

The Company has transferred a sum of ?131.12 crore, to reserve fund which is in compliance with Section 29C of the National Housing Bank Act, 1987 wherein every 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.

COMPANY OPERATIONS AND STRATEGIC PROGRESS

Operating at the forefront of India's affordable housing finance ecosystem, your Company continues to strengthen its role as a trusted financial partner for aspiring homeowners across the country.

With a clear strategic focus on expanding access to housing finance for underserved, low to middle income and emerging segments, the Company remains committed to bridging the credit gap for individuals who are often outside the ambit of formal banking channels. In pursuance of which, Aavas offers 'Small Ticket Size ('STS') Loan' which is one-stop solution to fulfil small financial needs.

With a thriving community of 2.71 Lakh active customers and cumulative loan disbursements reaching ?40,862 crore by March 31, 2026, your Company continue to set new benchmarks for institutional growth and social impact.

Over the years, the Company has steadily expanded its geographical presence and operational footprint across India. As of March 31, 2026, Aavas operates an extensive branch network of 435 branches across 13 states and 2 union territories and during the year, the Company has added net 38 Branches.

Comprehensive insights into the Company's operational dynamics and its state of affairs are elaborated in the 'Management Discussion and Analysis Report' which is an integral component of this Annual Report.

During the year, your Company delivered a resilient and high-growth performance, characterized by robust operational execution as evidenced by the financial highlights summarized below:

Loan Sanctions

The total Loan Sanctions of the Company reached at

? 6,989.70 crore as at March 31, 2026, reflecting a steady 12% year-on-year growth over the previous year's figure of

? 6,240.53 crore.

Cumulative loan sanctions since inception, have scaled to ?42,290.95 crore as of March 31, 2026 and the Company has not granted any loan against the collateral of Gold Jewellery and loan against shares during the year.

Loan Disbursements

The total housing loan disbursement reached at ?6,775.09 crore as at March 31, 2026 compared to ?6,123.01 crore in the previous Financial Year registering an annual growth of 11%.

The cumulative loan disbursement since inception as at March 31, 2026 was ?40,862 crore.

Assets Under Management ('AUM')

Driven by a robust expansion in our lending segments, the Company's AUM reached a high of ?23,451.71 crore (including assignment and PTC of ?5,911.58 crore) as of March 31, 2026. This represents a resilience of 15% year-on-year growth from ?20,420.18 crore (including assignment and PTC of ?4,529.17 crore).

The Company continues to prioritize a diversified and granular risk profile. As of March 31, 2026, our average ticket size for sanctioned loans was maintained at ?10.2 lakh, with a weighted average tenure of 184 months on an origination basis, ensuring long-term yield stability and reduced concentration risk.

The Company further confirms that throughout the Financial Year under review, there were no alterations/changes in

the core operations or activities or nature of the business of the Company.

Capital Adequacy and Liquidity Coverage

Your Company continues to maintain a fortified capital position, with the Capital Adequacy Ratio ('CRAR') strengthening to 44.56%. This high ratio significantly surpasses the 15% statutory threshold mandated by the RBI Master Directions, providing the Company with substantial leverage for future growth.

Reflecting a commitment to prudent cash flow management, the Liquidity Coverage Ratio ('LCR') stood at 147.71% as of March 31, 2026. This comfortably exceeds the regulatory requirement of 100%.

Non-Performing Assets ('NPA')

The Company maintains a proactive and stringent approach to risk management, ensuring the long-term health of our credit portfolio through advanced monitoring and early intervention.

Your Company remains fully compliant with Ind AS concerning the classification and provisioning of Stage-3 Assets ('NPA'). Asset classification is rigorously determined based on expected performance models, with Exposure at Default ('EAD') encompassing the total outstanding amount, inclusive of accrued interest, as of the reporting date.

Through a combination of granular monitoring, early-warning signals and swift remedial actions, the Company continues to safeguard its portfolio integrity. This multi-layered risk framework allows us to identify and address potential stress points before they escalate.

As at March 31, 2026 Gross Non-Performing Assets ('GNPA') and Net Non-Performing Assets ('NNPA') were recorded at 1.05% and 0.68% respectively, compared to 1.08% and 0.73% in the preceding Financial Year. This performance reflects our resilient collections mechanism and disciplined underwriting standards amidst a dynamic credit environment.

RATINGS OF THE COMPANY- HIGHLIGHTING GROWTH G RESILIENCE

Credit Rating

As at March 31, 2026, the Credit Ratings assigned by Credit Rating Agencies are as under:

During the Financial Year under review, the Company's credit rating outlook has been revised from 'Stable to Positive' by ICRA and CARE Limited. A comprehensive overview of the Company's credit ratings, is available on the website of the Company at .

Environmental, Social, and Governance ('ESG') Rating

The Company has gained notable recognition in the field of ESG practices, demonstrating its steadfast dedication to sustainability. The Company's below ESG ratings illustrate its strong performance and commitment to sustainability metrics:

* Morningstar (Sustainalytics) ratings assess risk, where a lower risk rating indicates a better rating.

The Company has not engaged with any ESG Rating Provider for rating. They have independently assigned the rating on the basis of Company's disclosures and other publicly available data. For more details on ESG ratings, kindly visit to website of the Company at .

REGULATORY G STATUTORY COMPLIANCES

In line with the commitment to ethical governance and transparent operations, the Company accords utmost importance to compliance with all applicable regulatory and statutory requirements. It operates within a well-defined compliance framework that ensures adherence to all relevant laws, rules and standards.

Your Company ensures strict adherence to all relevant guidelines, circulars, notifications and directions issued by our regulators which includes but not limited to Reserve Bank of India ('RBI'), National Housing Bank ('NHB'), Ministry of Corporate Affairs ('MCA'), Securities and Exchange Board of India ('SEBI'), Insurance Regulatory and Development Authority of India ('IRDAI'), BSE Limited ('BSE') and National Stock Exchange of India Limited ('NSE') from time to time. These guidelines, circulars, notifications and directions are also presented to the Board in the form of regulatory updates to keep the Board informed and report on actions initiated on the same. The Company also complies with the provisions of the Companies Act 2013, Secretarial Standards issued by the Institute of Company Secretaries of India ('ICSI') and as notified by Ministry of Corporate Affairs from time to time.

Further, the Company aligns itself with the Income Tax Act, 1961 and Goods and Services Tax Act ('GST') and diligently observes all other applicable statutory and regulatory requirements to maintain robust compliance and governance standards.

Compliance with Directions/ Guidelines of RBI / NHB and other statutes

During the Financial Year 2025-26, your Company has operated within a robust compliance framework and has complied with all applicable regulations, directions, guidelines and circulars

issued by statutory and regulatory authorities governing Housing Finance Companies.

Your Company has complied with Reserve Bank of India (Housing Finance Companies) Directions, 2025 including any amendments made thereto from time to time. During the Financial year, your Company has ensured adherence to circulars issued covering areas such as periodic updation of KYC, use of the 1600 number series for customer communications, levy of prepayment charges on business purpose loans extended to individuals and MSMEs, and other governance and prudential norms applicable to Housing Finance Companies.

The RBI, vide Press Release No. 2025-26/1588 dated November 28, 2025, issued 244 Consolidated Master Directions administered by the Department of Regulation, covering 11 categories of regulated entities. These directions rationalised the regulatory framework by issuing 35 directions applicable to Non-Banking Financial Institutions while repealing and withdrawing 9,445 existing circulars. The Company has carefully examined the relevant Master Directions and has made necessary alignments to its internal policies and practices to ensure continued regulatory compliance.

Insurance Regulatory and Development Authority of India ('IRDAI') Compliance

The Company is registered with the IRDAI as a Corporate Agent for carrying on the Insurance Agency Business and has complied with the applicable requirements under Insurance Regulatory and Development Act, 1999 and IRDAI (Registration of Corporate Agent) Regulations 2015, as amended from time to time. Being an insurance intermediary, Company is maintaining all the required information as per IRDAI rules.

The Company's Certificate of Registration to act as Corporate Agent ('Composite') was renewed with validity of three years from December 08, 2023 to December 07, 2026.

DEPOSITS

Your Company being a non-deposit taking HFC has not solicited, accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance Deposits) Rules, 2014 during the Financial Year under review. Hence, the requirement

AWARDS AND RECOGNITION

for furnishing the details relating to deposits covered under Chapter V of the Companies Act, 2013 and in terms of RBI (Housing Finance Companies) Directions 2025 read with paragraph 58 and 59 of Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025 are not applicable to the Company.

During the year under review, your Company continued to earn widespread recognition across Corporate Social Responsibility, Information Technology, Environmental, Social and Governance ('ESG'), and Brand C Corporate achievements. These accolades reflect the Company's unwavering commitment to excellence, innovation, sustainability, and Stakeholder value creation. The key recognitions received during the year are outlined below:

RESOURCE MOBILIZATION

Your Company has in place a well-defined borrowing framework approved by the Board of Directors, which is periodically reviewed to ensure alignment with the Company's strategic and operational objectives. Guided by this framework, the Company maintains a structured liability profile aimed at optimizing the cost of funds while ensuring adequate liquidity and financial flexibility to support the growth of its lending operations.

Additionally, the Company continues to explore opportunities for responsible and sustainable sources of funding that align with its broader commitment towards inclusive housing finance and long-term economic development.

Further, reinforcing its disciplined capital management framework and in compliance with pursuant to Section 180(1)(c) of the Companies Act, 2013, the Shareholders of the Company, through a Special Resolution passed on September 16, 2025, have authorized the Board of Directors (including Committees of the Board) to borrow monies, apart from temporary loans obtained from the Company's bankers in the ordinary course of business, in excess of the paid-up share capital, securities premium and free reserves of the Company,

subject to an overall borrowing limit of ?32,000 crore (Rupees thirty two thousand crore only).

Strategic Performance Metrics showing borrowing profile and liquidity resilience of the Company :

Diversified Funding Sources

The Company mobilizes resources through a diversified mix of funding instruments and borrowing avenues, enabling it to efficiently access capital under varying market conditions.

During the year under review, our sources of funding were substantially in the form of Long-Term Loans from Banks and Financial Institutions (52%), followed by Securitization/ Direct assignment (27%), NHB Refinance (11%) and Debt capital market (10%).

Term Loans from Banks and Financial Institutions

As at March 31, 2026, the Company obtained fresh loan sanctions of ?4,000 crore, against the availed loans amounting to ?3,650 crore. Accordingly, the outstanding balance of term loans from banks and financial institutions stood at ?10,624 crore (excluding PTC and CC), with an average tenure of approximately 9 years.

Co-Lending/Securitization/Assignment of Loan Portfolio

The Company has continued to leverage opportunities in the co-lending, securitization and direct assignment markets, enabling it to strengthen liquidity, broaden its liability base and mitigate asset-liability mismatches.

During the year under review, your Company received purchase consideration of ?1,677 crore from assets assigned under transfer of loan portfolio transactions, received purchase consideration of ?496 crore from PTC transaction and raised

? 200 crore through co-lending of loan portfolio.

These portfolio transfer and co-lending transactions were undertaken in compliance with the guidelines issued by the RBI, and the related assets were derecognized from the

Company's financial statements in accordance with the applicable regulatory and accounting framework.

Refinance from National Housing Bank ('NHB')

The Company, during the Financial Year, received NHB refinance aggregating to ?295 crore. As on March 31, 2026, total outstanding balance of refinance from NHB stood at around ?2,186 crore.

Non-Convertible Debentures ('NCDs')

During the Year, the Company has mobilised funds through issue of Non-Convertible Debentures amounting to ?400 crore. In pursuance to which, the total outstanding NCDs of the Company has reached at ?1,530.74 crore as at March 31, 2026 as compared to ?1,317 crore in the previous year.

Moreover, the composition of the NCD portfolio of your Company reflects a diversified lender base, with Financial Institutions ('FI') constituting 33%, Development Financial Institution ('DFI') 50%, and Scheduled Commercial Banks ('SCB') 17% of the total outstanding, as against FI – 23 %; DFI – 65 % and SCB- 12 % respectively, in the previous year.

Commercial Papers

During the Financial Year under review, your Company issued Commercial Papers amounting to ?200 crore, which was fully utilized for the object as stated in the Offer Document. As on March 31, 2026, the Company's Commercial Paper outstanding is ?200 crore (Maturity Amount).

Further, no other short-term instruments were issued in the Financial Year 2025-26.

Rupee Denominated External Commercial Borrowing

The Company continues to diversify its funding profile through Rupee Denominated External Commercial Borrowings, including Masala Bonds, thereby strengthening access to offshore capital while mitigating currency risk.

As at March 31, 2026, the total outstanding balance under Rupee Denominated External Commercial Bond was ?270 crore. The Company has maintained a disciplined approach towards servicing its obligations, with all interest payments on NCDs and Masala Bonds being duly paid on due dates, without any instances of delay or unclaimed amounts. Further, during the year, the company has fully redeemed masala bond of ?200 Crore.

In line with applicable regulatory provisions, being a listed HFC, the requirement for creation of Debenture Redemption Reserve ('DRR') is not applicable. Further, the stipulation to invest or deposit a sum of not less than 15% of the amount of debentures which are maturing during the Financial Year ending on March 31 of the next year as provided under Rule 18

of the Companies (Share Capital and Debentures) Rules, 2014 has been dispensed with for listed entities vide notification of MCA dated June 05, 2020.

TRUSTEE TO SECURITIES HOLDERS

In order to safeguard the interest of Debenture Holders of the Company and continuous monitoring of compliance with terms of issue, your Company has appointed IDBI Trusteeship Services Limited and Beacon Trusteeship Limited pursuant to the provisions of Securities and Exchange Board of India (Issue and Listing of Non- Convertible Securities) Regulation 2021.

The details of Debenture Trustee are available on the Company's website at and are also available at corporate information section, of this Annual Report.

BRANCH BUILD- UP: STRATEGIC NETWORK

EXPANSION

Our success is anchored in a deep commitment to physical accessibility and community. A strong branch network forms the backbone of the Company's operations, enabling it to serve customers effectively at the grassroots level. Each branch acts as a strategic touchpoint, driving business growth and fostering closer engagement with local communities. By expanding the physical presence, the Company continues to strengthen its reach, improve customer access and tap into emerging markets across India.

The Company is expanding its presence in the southern region, which represents a meaningful whitespace opportunity. Building on the operational experience in Karnataka and a contiguous expansion strategy, during the year, your Company has extended its footprint into Tamil Nadu with 20 Branches.

As on March 31, 2026, the Company is operating in 13 states and 2 union territories, with a network of 435 branches, consisting of Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Uttar Pradesh, Haryana, Chhattisgarh, Uttarakhand, Himachal Pradesh, Punjab, Odisha, Karnataka, Tamil Nadu, Delhi and Chandigarh. The Company has added net 38 Branches during the Financial Year 2025-26.

Your Company has its Registered Office in Jaipur, Rajasthan and its branch network as on March 31, 2026 vis-à-vis the previous Financial Year are detailed hereunder:

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors plays a pivotal role in upholding the principles of sound Corporate Governance by providing strategic direction, oversight, and accountability. An appropriately structured and well-balanced Board, comprising Executive, Non-Executive, and Independent Directors, ensures a diversity of perspectives, experience, and expertise, thereby strengthening decision-making processes.

The composition of your Company's Board is designed to foster independence, transparency, and objectivity, enabling effective supervision of management and safeguarding the interests of all Stakeholders.

During the period under review, your Company has optimum mix of Executive, Non-Executive and Independent Directors including Women Independent Director and its composition is aligned with the requirements of Companies Act, 2013, SEBI (LODR) Regulations, 2015, and the Reserve Bank of India (Non-Banking Financial Companies - Governance) Directions, 2025, as amended from time to time.

The Board of Directors of the Company comprises eminent professionals with diverse experience, high standards of integrity, and proven competence. The Non-Executive Directors, including Independent Directors, play a pivotal role in strengthening the governance framework by bringing objective and independent judgment to Board deliberations. Their contributions span across key areas such as strategic direction, operational performance, risk oversight, resource allocation, financial reporting, and upholding the highest standards of corporate conduct.

In line with best governance practices, the Board has identified and mapped core competencies including Accounting and Finance, Legal and Regulatory Compliance, Strategy Formulation and Execution, Risk Management, and Corporate Governance, along with other specialized skills. These competencies are considered essential for the effective functioning of the Company, particularly in its capacity as a NBFC and HFC.

BOARD OF DIRECTORS

As on March 31, 2026, the Board is comprised of 9 Directors, including three 3 Independent Directors of which 2 are Women Independent Directors, 5 Non-Executive Nominee Directors, and 1 Executive Director who also serves as the Managing Director C Chief Executive Officer. The Board's composition reflects an appropriate balance of executive and non-executive representation, ensuring robust oversight, diverse perspectives, and strong leadership, thereby fostering sound business principles and sustainable value creation.

The Composition of the Board of the Company as on March 31, 2026 is given below:

C Tenure of Mrs. Kalpana Kaushik Mazumdar is set to expire June 22, 2026, the resulting vacancy will suitably be filled by the Board within the regulatory timelines.

^ Ceased to be Managing Director and CEO of the Company w.e.f. Close of business hours of April 20, 2026. Further Mr. Manu Yeshpal Singh appointed

as the Managing Director (subject to receipt of approval from the Reserve Bank of India and approval of the shareholders of the Company) and Chief Executive Officer of the Company, w.e.f. April 21, 2026.

* Appointed as Additional Non-Executive Non-Independent Directors w.e.f. June 30, 2025 and subsequently their appointment was approved by the Shareholders as Non-Executive Nominee Director at the Annual General Meeting held on September 16, 2025.

** Appointed as Additional Non-Executive Non-Independent Director w.e.f. October 15, 2025 and subsequently his appointment was approved by the

Shareholders as Non-Executive Nominee Director via postal ballot passed on January 06, 2026.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel ('KMP') of your Company constitute the core leadership team responsible for the effective execution of the Company's strategy and the day-to-day management of its operations.

In accordance with the provisions of Section 2(51) and Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, your Company's KMP comprises the following:

^ Ceased as KMP w.e.f. close of business hours of April 20, 2026.

* Appointed as KMP w.e.f. April 21, 2026.

APPOINTMENT G RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the Financial Year under review and upto the date of this Annual report, the Company has witnessed changes in its Board composition in accordance with corporate governance requirements and business imperatives. The changes, including appointments and resignations were undertaken to strengthen leadership oversight, ensure regulatory alignment and drive operational effectiveness details as under:-

DECLARATION BY INDEPENDENT DIRECTOR

In accordance with the provisions of the Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) C

25 of SEBI (LODR) Regulations, 2015, the Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence for Independent Directors.

The Board affirms that the Independent Directors fulfill the aforesaid criteria and possess requisite integrity, qualifications, proficiency, experience, expertise and are independent of the management.

The names of all the Independent Directors of the Company have been included in the Independent Director's databank maintained by Indian Institute of Corporate Affairs ('IICA').

None of the Directors have any pecuniary relationship or transactions with the Company.

CERTIFICATE OF NON-DISOUALIFICATION OF DIRECTORS

The Board of Directors hereby affirms that none of its members are disqualified from being appointed as Directors in accordance with the provisions of Section 164 of the Companies Act, 2013. Further, no Director has been debarred from holding the office of Directors by virtue of any SEBI order or any other such authority. None of the Directors of the Company are related to each other.

In support of the above, a certificate from a Company Secretary in practice has been obtained confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors

of Company by SEBI / MCA or any such statutory authority. The same forms part of this Annual Report as 'Annexure-1' .

DISCLOSURE UNDER SECTION 1G7(14) OF THE COMPANIES ACT, 2013

During the year under review, the Company did not have any Subsidiary, therefore, the disclosure under Section 197(14) of Companies Act, 2013 for receiving any commission by the Managing Director and Chief Executive Officer of the Company from Subsidiary Company is not applicable.

BOARD MEETINGS

The Company upholds Corporate Governance best practices by convening a minimum of four Board meetings each year, ensuring at least one meeting per quarter. The schedule for these meetings is established well in advance, following due consultation and concurrence of all Directors.

For matters requiring urgent attention, decisions approved through circular resolutions are subsequently presented at the next scheduled Board meeting, thereby reinforcing transparency and accountability in governance.

During the Financial Year under review, the Board held 7 (Seven) meetings. Detailed records of individual Directors' attendance at these meetings are comprehensively captured in the Corporate Governance Report and are not repeated here to avoid duplicacy.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The effectiveness of the Board of Directors is central to the Company's sustained growth and governance excellence. A structured evaluation process enables the Board to identify opportunities for improvement, address governance challenges, and strengthen accountability, thereby enhancing value creation for all Stakeholders.

In line with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has undertaken its annual assessment of overall performance, including that of its Committees and Individual Directors. In consultation with the Nomination and Remuneration Committee, the Board has established a comprehensive framework that sets out the criteria for evaluating the performance of the Board, its Committees, and Individual Directors, including Independent Directors, in compliance with applicable regulatory requirements.

The Board also periodically reviews and refines this framework, in collaboration with the Nomination and Remuneration Committee, to ensure alignment with evolving compliance obligations and governance standards.

The evaluation process is facilitated through a web-based platform, 'DigiCompany' which streamlines operations,

enhances efficiency, and automates the generation of evaluation reports.

Details of the evaluation process covering the Board, its Committees, and Individual Directors, including Independent Directors, are provided in the Corporate Governance Report, forming part of this Annual Report.

SEPERATE INDEPENDENT DIRECTORS' MEETINGS

During the Financial Year under review, two separate meeting of Independent Directors was convened on December 02, 2025 and March 12, 2026. This meeting was held without the participation of Non-Independent Directors or members of the Company's Management, thereby ensuring an environment conducive to independent deliberation and oversight.

The Independent Directors, in the course of this meeting, reviewed and discussed various matters arising from Committee meetings and Board deliberations. Their discussions encompassed, inter alia, the assessment of the quality, adequacy, and timelines of information flow between the Company's Management and the Board, ensuring that the Board is equipped with all necessary data and insights to effectively discharge its fiduciary and governance responsibilities.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

In line with the Company's commitment to strong governance practices, familiarization programmes are conducted for Independent Directors in compliance with Regulation 25(7) of the SEBI (LODR) Regulations, 2015. These programmes ensure that Independent Directors are well-acquainted with their roles, rights, responsibilities, and the Company's business model at the time of induction.

The Programme provides a structured framework aligned with contemporary governance expectations, emphasizing adherence to a code of ethics and integrity. Its objective is to educate Independent Directors about their obligations, regulatory environment, and the Company's operational model, thereby fostering trust and confidence among Stakeholders and the investment community.

Through induction and ongoing training initiatives, the Board, including Independent Directors, is empowered to make informed and deliberate decisions that serve the best interests of the Company and its Stakeholders.

Details of the familiarization programme are available on the Company's website at: .

POLICY ON DIRECTOR'S APPOINTMENT,

REMUNERATION G OTHER DETAILS

To foster capable and visionary leadership, the Company has adopted a comprehensive Nomination and Remuneration Policy governing the selection, compensation, and governance

of its Directors, Key Managerial Personnel ('KMP'), and Senior Managerial Personnel ('SMP'). The Policy emphasizes ethical conduct, professional merit, and organizational alignment, ensuring that individuals appointed to critical positions contribute meaningfully through their competence and insight. It also reinforces transparency in the nomination process, underscoring the Company's commitment to responsible leadership.

This Policy has been formulated in accordance with Section 178 of the Companies Act, 2013, Regulation 19 of SEBI (LODR) Regulations, 2015, and the Guidelines on Compensation of Key

BOARD COMMITTEES

Managerial Personnel and Senior Management in NBFCs issued by the Reserve Bank of India (RBI) vide circular RBI/2022-23/36 DOR.GOV.REC.No.29/18.10.002/2022-23 dated April 29, 2022,

as amended from time to time. The Policy is available on the website of the Company at

Details of remuneration paid to Directors are disclosed in the Annual Return ('Form MGT-7'), which is also available on the website of the Company at .

Aligned with the applicable regulatory framework, the Board has constituted following 9 Committees of Board to effectively strengthen governance, strategic decision-making, enhance operational efficiency, oversight functions and regulatory compliance:

During the Financial Year under review, the Board accepted all recommendations made by the above Committees.

The details with respect to the composition, terms of reference, number of Meetings held, etc. of these Committees as on March 31, 2026 are given in the Report on Corporate Governance, which forms part of this Annual Report as 'Annexure-2' .

EMPLOYEE STOCK OPTION PLAN

The Company recognizes the importance of attracting, retaining and motivating talent as a key driver of its long-term growth and value creation. In line with this, the Company has implemented an Employee Stock Option Schemes ('ESOP Schemes'), designed to align the interests of employees with those of shareholders by providing an opportunity to participate in the Company's growth and performance.

All the ESOP C PSOP Schemes of the Company are in compliance with the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ('SEBI SBEB and Sweat Equity Regulations') as amended from time to time.

Further, the Nomination C Remuneration Committee is authorized to administer and oversee the ESOP C PSOP Schemes of the Company ensuring compliance with the Companies Act, 2013, SEBI SBEB and Sweat Equity Regulations, 2021 and SEBI (LODR) Regulations, 2015.

EOUITY STOCK OPTION PLAN 2022 ('ESOP- 2022')

During the Financial Year under review, the Company made grant aggregating to 3,01,230 options on November 11, 2025 under ESOP-2022.

PERFORMANCE STOCK OPTION PLAN 2023 ('PSOP-2023')

During the Financial Year under review, the Company made grant aggregating to 23,637 options on August 12, 2025 under the PSOP-2023.

PERFORMANCE STOCK OPTION PLAN 2024 ('PSOP-2024')

During the Financial Year under review, the Company made grant aggregating to 10,000 options on November 11, 2025 under the PSOP 2024.

EOUITY STOCK OPTION PLAN 2025 ('ESOP- 2025')

With a view to drive long term performance, retain talent and attract new talent, the Company formulated and implemented 'Aavas Financiers Limited - Equity Stock Option Plan- 2025' ('ESOP-2025') as a key component in its reward structure to the eligible employees of the Company. The ESOP-2025 was approved by the Shareholders in Annual General Meeting held on September 16, 2025. Further, during the year under review, the Company made grant aggregating to 14,22,470 options on November 11, 2025 under the ESOP 2025.

Following are the existing ESOP and PSOP plans of the Company:

Additionally, in compliance with the Regulation 13 of SEBI SBEB and Sweat Equity Regulations, 2021, a certificate confirming that the above ESOP C PSOP Schemes have been implemented in accordance with the SEBI SBEB and Sweat Equity Regulations, 2021 as amended from time to time, has been obtained from Secretarial Auditors of the Company.

Further, the applicable disclosures as stipulated under Regulation 14 of SEBI SBEB and Sweat Equity Regulations, 2021, with regard to ESOP C PSOP Plan of the Company are available on the website of the Company at .

Further, in compliance with Regulation 42 of SEBI (LODR) Regulations, 2015, the ESOP C PSOP schemes are available on the website of the Company at .

AUDIT G AUDITORS

Statutory Auditors and Auditors' Report

In terms of provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and RBI Guidelines for appointment of Statutory Auditor(s), M/s. M S K A C Associates LLP, Chartered Accountants (Firm Registration No. 105047W) and M/s. Borkar C Muzumdar, Chartered Accountants (Firm Registration No. 101569W) were appointed as the Joint Statutory Auditors of the Company by the members of the Company for a period of 3 (Three) consecutive

years in the AGM held on August 07, 2024 effective from the conclusion of 14 th AGM until the conclusion of 17 th AGM.

The Audit Report given by the Joint Statutory Auditors on the financial statements of the Company is part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

The Audit Committee and the Board of Directors also took note of the eligibility certificate received from both the audit firms that they are not disqualified and are eligible to hold the office as Auditors of the Company. Further, during the year under review, the Auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013.

Secretarial Auditors and Secretarial Audit Report

With a vision to uphold the highest standards of governance and regulatory discipline, the Company undertakes Secretarial Audit as a key assurance mechanism to evaluate compliance with applicable laws and secretarial practices.

In adherence with the provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder and Regulation 24A of SEBI (LODR) Regulation, 2015, the Shareholders of the Company, in the 15 th AGM held on September 16, 2025, approved the appointment of M/s. Chandrasekaran Associates, (Firm Registration No. P1988DE002500) Company Secretaries as Secretarial Auditors of the Company for a period of 5 (Five) consecutive Years effective from Financial Year 2025-26 upto Financial Year 2029-30.

Accordingly, M/s. Chandrasekaran Associates, Company Secretaries (Firm Registration No. P1988DE002500), have carried out Secretarial Audit of the Company for the Financial Year 2025-26 in accordance with the provisions of Section 204 of the Companies Act, 2013 read with the rules made thereunder.

The Report of Secretarial Auditors is self-explanatory and there were no observations or qualifications or adverse remarks in their Report.

In accordance with provisions of Sub-section (1) of Section 204 of the Companies Act, 2013, the Secretarial Audit Report in Form MR-3, forms part of this Annual Report as 'Annexure-3' .

Furthermore, M/s. Chandrasekaran Associates, Company Secretaries has issued an Annual Secretarial Compliance Report for the Financial Year 2025-26 in compliance with Regulation 24A of SEBI (LODR) Regulation, 2015 which forms part of this Annual report as 'Annexure-4' and is also submitted to the Stock Exchanges. There are no observations, or qualifications or adverse remarks in their Report.

The Company has obtained consent and eligibility certificate from the above audit firm under applicable rules and laws that they are not disqualified and are eligible to hold the office as Secretarial Auditors of the Company for the Financial Year 2026-27.

INFORMATION SYSTEM AUDIT ('IS AUDIT')

The Company has in place a Board approved Information Systems Audit Policy that is commensurate with the technological landscape. The audits focus on information technology general controls and information security aspects.

The Information System audit are carried out as part of an Internal Audit function. The Internal Audit function is an independent assurance function. The Head of Internal Audit ('HIA') is accountable to the Audit Committee and Management in providing assurance on the adequacy and effectiveness of the Company's risk management, control, and governance of information system processes used for controlling its activities.

INTERNAL AUDIT G INTERNAL FINANCIAL CONTROL AND ITS ADEOUACY

The Company has in place a Board approved Risk Based Internal Audit Framework ('RBIA') in compliance with directive issued by Reserve Bank of India. The Company has an effective independent Internal Audit function headed by the HIA to oversee the audit of functional areas and operations.

The HIA reports directly to the Audit Committee of the Board. The primary responsibility of the HIA is to effectively manage the Internal Audit function and to ensure that it provides required assurance on the entity's business and support functions.

The RBIA framework effectively ensures that internal audit coverage is commensurate with the nature of complexity of

business operations on an ongoing basis. It encompasses coverage of business and support functions, including governance, regulatory, operational and technology aspects, as well as branch audits. HIA ensures compliance with the internal audit principles and standards and the independence of the Internal Audit department, its audit staff and evaluating its performance against key performance indicators.

The Audit Committee performs periodic reviews and evaluates adequacy and effectiveness of the Company's internal control environment, ensuring the timely implementation of audit recommendations to enhance operational integrity and regulatory compliance.

The Company's internal financial control is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. The Company's internal financial control framework includes those policies and procedures aimed at:

Ensuring the maintenance of accurate financial records;

Providing reasonable assurance that financial transactions are recorded appropriately for the preparation of financial statements;

Establishing mechanisms for the timely prevention and detection of unauthorized acquisition, use, or disposal of Company assets that may have a material impact on financial statements.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

There were no significant or material orders passed by the regulators or courts or tribunals against the Company during the Financial Year 2025-2026.

MATERIAL CHANGES/EVENTS AND

COMMITMENTS, IF ANY

During the year following material changes/events have occurred:

Material Event: Share Purchase Agreement and Open Offer

During the previous Financial Year 2024–25, the Company had entered into share sale agreements ('SPAs') with Aquilo House Pte. Ltd. (belonging to the CVC Network) ('Purchaser') and Lake District Holdings Limited, Partners Group ESCL Limited and Partners Group Private Equity (Master Fund), LLC, being the erstwhile promoters and members of the Promoter Group of the Company ('Sellers').

Pursuant to the SPAs, the Purchaser agreed to acquire, in aggregate, 2,09,49,112 equity shares of the Company from the Sellers, constituting 26.47% of the paid-up share capital of the

Company and control of the Company, subject to the terms and conditions set out in the SPAs.

The execution of the SPAs triggered an obligation on the Purchaser to make an open offer to the public shareholders of the Company in accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Pursuant to the said open offer, the Purchaser acquired 1,78,08,116 equity shares of the Company, aggregating to 22.50% of the paid-up share capital of the Company pursuant to the open offer from the public shareholders.

In accordance with the terms of the SPAs, on June 30, 2025 ('Closing Date'), the Purchaser acquired 2,09,49,112 equity shares constituting 26.47% of the paid-up share capital of the Company. Consequently, with effect from the Closing Date (i) the Purchaser acquired control of the Company and was classified as a 'promoter' of the Company; and (ii) the erstwhile promoters and members of the promoter group of the Company hold NIL shares of the Company and have ceased to be in control of the Company, and stand reclassified as public shareholders of the Company with effect from June 30, 2025.

As a result of the aforesaid acquisition and the open offer, the Purchaser as on March 31, 2026, holds 3,87,57,228 equity shares of the Company, representing 48.88% of the paid-up share capital of the Company.

Further, there have been no other material changes or commitments that have affected the financial position of the Company.

MAINTENANCE OF COST RECORDS

The Company being an NBFC-HFC is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

INFORMATION TECHNOLOGY

Your company has strengthened its position as a technology-driven leader by leveraging digital, AI, and automation to improve efficiency, reduce costs, and enhance customer experience. Key initiatives included upgrading the Nirman sales app, implementation of a digital agreement process, a loan disbursal processes, and expansion of customer self-service via chatbots and mobile apps. AI adoption across critical functions improved turnaround times, FTR rates, voice bot improved collections efficiency, and application development speed, while RPA and other AI tools enhanced audits and employee productivity.

The Company also modernized its data platform with a scalable cloud-native stack which ensures scalability and advanced analytics. It strengthened cybersecurity through drills, assessments and awareness programs and maintained

a strong BitSight rating. Operational improvements included adopting cloud-based systems like Salesforce, MuleSoft for loan origination and customer service and Oracle platforms for core banking and financial systems. Digital integrations enabled over 75% of customer requests to be resolved digitally with 99% self-service.

Going forward, the focus will be on scaling AI across functions, enhancing cybersecurity, expanding cloud adoption, and building strategic partnerships to drive long-term growth and innovation in affordable housing finance.

HUMAN RESOURCE – A CULTURE OF COMMITMENT, CONSISTENCY AND COMPASSION

Your Company has always been committed to nurturing a supportive, inclusive and dynamic workplace where each team member feels valued and motivated. Our comprehensive HR initiatives are designed to enhance employee well-being, cultivate professional growth, and build a strong sense of community. By investing in our people, we not only drive individual success and well-being, but also propel our organization towards greater achievements. Its vision of being a leader and a role model in a broad based and integrated financial services business and a culture that is purpose driven gives meaning to our people. As we reflect on the past Financial Year, 2026, it is evident that our success is intrinsically linked to the quality and competence of our human capital.

Your Company has continued to built upon the strong foundation established in previous years by implementing strategic initiatives designed to enhance the well-being, foster career growth and advance professional development of our employees. Among these initiatives, we have placed a particular emphasis on promoting the holistic well-being of our female staff and strengthening the leadership capabilities of our Senior Management team.

Recognizing the importance of a performance driven culture, the Company introduced a performance-based equity scheme to instill a sense of ownership and accountability while incentivizing excellence. This initiative reflects our dedication to align individual contributions with organizational success, ensuring that employees are rewarded for their commitment and achievements.

Furthermore, we continue to invest in leadership development programs, mentorship opportunities, and skill enhancement initiatives to empower our workforce and equip them with the tools necessary to excel in an evolving business landscape.

As of March 31, 2026, our permanent employees count stood at 7,649, reflecting our growth and unwavering commitment to fostering a conducive and performance-driven organizational environment. In the future, your Company is committed to foster an improved workplace that nurtures professional

development and operational excellence. Together, we will persist in our pursuit of excellence, promote sustainable growth and create lasting value for all our Stakeholders.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION G REDRESSAL) ACT, 2013

Your Company remains firmly committed to providing a safe, respectful and inclusive workplace environment for all employees. Sexual harassment is treated as a serious violation of human dignity and organisational values, and the Company maintains a zero-tolerance approach towards such conduct.

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has adopted a comprehensive policy and constituted Internal Complaints Committees ('ICCs') to address and resolve complaints relating to sexual harassment. The policy applies to all employees across locations.

Details of complaints received, disposed and pending during the Financial Year are provided in the Corporate Governance Report forming part of this Annual Report.

MATERNITY BENEFITS PROVIDED BY THE

COMPANY UNDER MATERNITY BENEFIT ACT, 1G61

The Company places strong emphasis on fostering a supportive, inclusive, and equitable workplace for its women employees. In line with this commitment, the Company has remained fully compliant with the provisions of the Maternity Benefit Act, 1961, during the Financial Year under review.

A comprehensive Leave Policy is in place, clearly outlining entitlements related to maternity leave and associated benefits. All eligible women employees have been extended statutory benefits under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support.

Further, recognizing the importance of employee welfare, the Company has also introduced a reimbursement facility for crèche services, thereby supporting working mothers in balancing professional and personal responsibilities.

By ensuring compliance with applicable laws and proactively implementing employee-friendly initiatives, the Company remains dedicated to providing a safe, empowering, and inclusive work environment for its women employees.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In any organization, a secure and confidential channel for reporting concerns related to ethical conduct is essential for maintaining accountability and integrity. Such a mechanism empowers individuals to raise issues without fear, fostering a culture of transparency and trust within the organization. Accordingly, your Company has in place a 'Whistle Blower

Policy' encompassing vigil mechanism pursuant to the requirements of sub-section 9 and 10 of Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015, to report to the management genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct.

With the core aim to achieve the highest standards of ethical, moral and legal conduct of business operations and to nurture these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express their concerns without fear of punishment or unfair treatment.

The mechanism provides a secure channel to the employees and Directors for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases, ensuring transparency and accountability in addressing whistleblower concerns. There are no restrictions for accessing the Audit Committee for any of the Company's employees.

In order to safeguard the fairness of the process, the identity of the Whistle Blower is kept confidential to prevent any discriminatory actions against him/her.

The Whistle Blower Policy is available on the website of the Company at .

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN COMPANY'S SECURITIES

To uphold the highest standards of transparency and regulatory compliance, the Company has established and adopted a comprehensive Code of Conduct for the Prevention of Insider Trading, in line with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 ('SEBI (PIT) Regulations, 2015').

This Code regulates, monitors, and ensures proper reporting of trading activities by Designated Persons and their immediate relatives, identified based on their functional roles. It is designed to maintain ethical integrity in trading the Company's securities. The Code prohibits trading while in possession of Unpublished Price Sensitive Information ('UPSI') and prescribes clear procedures, disclosure requirements, and consequences for violations.

To safeguard Stakeholder interests, Mr. Saurabh Sharma, Company Secretary, has been appointed as the Compliance Officer under the Code, responsible for overseeing adherence to insider trading regulations and governance principles.

Furthermore, in accordance with Regulations 3(5) and (6) of SEBI (PIT) Regulation 2015, the Company has maintained a Structural Digital Database ('SDD'), wherein details of persons with whom UPSI is shared on need-to-know basis and for legitimate business purposes is maintained with time

stamping and audit trails to ensure non-tampering of the database. It ensures proper record-keeping and monitoring of access to UPSI. This database serves as an essential tool for regulatory compliance, preventing unauthorized dissemination and ensuring transparency in the management of sensitive financial information.

The SDD is maintained internally by the Company and is not outsourced in accordance with the provisions of the SEBI PIT Regulations, 2015.

RISK MANAGEMENT FRAMEWORK

Managing risk effectively remains central to the Company's long-term sustainability. Recognizing the dynamic nature of its operating environment, the Company has built a comprehensive risk management framework supported by clearly defined policies, systems, and governance practices.

Risk oversight is anchored through a collaborative structure involving senior management and the Board's Risk Management Committee, ensuring compliance with regulatory requirements under SEBI (LODR) Regulations, 2015, and RBI guidelines. This framework enables continuous monitoring of the evolving risk landscape while fostering a culture of awareness and accountability.

The Committee undertakes periodic reviews of key risks and mitigation strategies, supported by well-established policies such as the Risk Management Policy, IT Risk Management Policy, and ICAAP, along with an Early Warning Signal mechanism for timely identification of potential stress.

A wide range of risks—including credit, liquidity, interest rate, cybersecurity, fraud, regulatory, and operational risks—are actively tracked and reviewed. The Company's disciplined underwriting processes, backed by skilled professionals and supported by specialized teams and external experts, further strengthen its ability to manage risks effectively and sustain business performance.

INVESTOR RELATIONS

Fostering trust through open, timely and transparent communication remains central to building strong and enduring relationships with the investment community. The Company is committed to keeping Stakeholders well informed about its financial performance, strategic priorities and long term objectives through consistent engagement. Leveraging technology, the Company not only sustains current performance but also supports future ready growth, guided by a holistic view of the operating environment.

To strengthen investor engagement, the Company has established a dedicated Investor Relations team that facilitates regular communication through earnings conference calls, investor and analyst meetings and structured interactions between fund managers and management. The Investor

Relations team also participates in investor conferences each quarter to deepen engagement. Presentations shared with investors, analysts and fund managers are made available on the Company's website and are simultaneously disseminated to the stock exchanges to ensure transparent and equitable access to information. Each quarter, the audio recordings of these meetings, along with their transcripts, are posted on the website of the Company at .

CORPORATE SOCIAL RESPONSIBILITY

Your Company recognizes Corporate Social Responsibility ('CSR') as an integral part of responsible Corporate Governance and remains committed to contributing towards the social and economic development of the communities in which it operates.

Through its CSR initiatives, the Company undertakes programmes aimed at promoting community welfare and improving the quality of life, particularly for underprivileged and marginalized sections of society. The Company continues to support initiatives in areas such as Environment Sustainability, Education, Health C Well Being, Livelihood C women empowerment and other activities aligned with the objectives set out under the applicable CSR framework.

In compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, the Company has constituted a CSR C ESG Committee of the Board to oversee the implementation and monitoring of CSR activities. Further, the Company has adopted a Corporate Social Responsibility Policy in accordance with the provisions of and the activities specified under Schedule VII of the Companies Act, 2013. The Policy lays down the guiding principles and framework for undertaking CSR initiatives of the Company.

The CSR Policy is available on the website of the Company at .

The Annual Report on CSR activities, as required under the Companies Act, 2013 and the rules made thereunder, is provided as 'Annexure - 8' forming part of this Annual Report.

PARTICULARS OF HOLDING/JOINT VENTURE/ SUBSIDIARY/ASSOCIATE COMPANIES

Pursuant to the share sale agreements entered into with Aquilo House Pte. Ltd. ('Purchaser') and each of Lake District Holdings Limited, Partners Group ESCL Limited, and Partners Group Private Equity ('Master Fund'), LLC who were members of the Promoter/Promoter Group of the Company ('Sellers') until June 30, 2025 and in accordance with the powers conferred upon the Purchaser under Article 16 of the Articles of Association, Aquilo House Pte. Ltd. has become the Holding

Company of the Company effective June 30, 2025. This status is in terms of Section 2(87)(i) of the Companies Act, 2013, by virtue of controlling the composition of the Board of Directors.

Further, pursuant to Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the requirement of furnishing a statement in Form AOC-1 is not

applicable, as the Company does not have any Subsidiary, Associate or Joint Venture during the Financial Year under review.

In accordance with Section 136(1) of the Companies Act, 2013, the Annual Report of your Company containing inter alia, Financial Statements has been available on the website of the Company at .

PARTICULARS OF EMPLOYEE REMUNERATION AND RELATED DISCLOSURES

In compliance with Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures regarding the remuneration of Directors and employees have been made. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Key Managerial Personnel) Rules, 2014, is available on the website of the Company at .

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In terms of Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars of energy conservation, technology absorption and foreign exchange earnings and outgo is provided as under:

ENVIRONMENT HEALTH AND SAFETY ('EHS') PROTECTION

As a Housing Finance Company, the Company is committed to upholding robust environmental and social standards across its lending and operational practices. We continuously strengthen and refine our credit appraisal and investment decision frameworks to ensure alignment with applicable Indian statutory and regulatory requirements, as well as internationally recognized benchmarks, including the IFC Performance Standards. These principles are embedded across our housing finance and MSME portfolios, enabling

us to promote responsible financing and sustainable development outcomes.

Your Company places strong emphasis on safeguarding the health and safety of its workforce by embedding robust EHS principles into its operations. Its approach is centered on systematic risk identification, preventive controls, and adherence to applicable regulatory requirements. Through structured policies, the Company strives to build a vigilant and accountable safety culture. Ongoing monitoring, internal reviews, and continuous enhancement of safety practices remain integral to its commitment to operational excellence and long-term sustainability.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

In accordance with Regulation 34(2)(f) of the SEBI (LODR) Regulations, 2015, the top 1,000 listed companies based on market capitalization are required to include a Business Responsibility and Sustainability Report ('BRSR') in their Annual Reports. This report outlines the Company's initiatives from an Environmental, Social and Governance ('ESG') perspective.

Following SEBI Master Circular HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026, SEBI has further introduced BRSR Core, a focused sub-set of the BRSR, comprising Key Performance Indicators ('KPIs') across nine ESG attributes.

Demonstrating its commitment to robust Corporate Governance and transparent sustainability disclosures, the Company has voluntarily implemented the BRSR Core framework over the last two Financial Years.

The Company is dedicated to year-on-year improvements in ESG performance, refining our systems and disclosure practices to deliver tangible impact and stay in step with shifting Stakeholder expectations.

The BRSR describing the initiatives taken by the Company from an ESG perspective along with Reasonable Assurance Statement from an Independent Auditor forms part of this Annual Report as 'Annexure-10' .

ANNUAL RETURN

The Annual Return has been prepared in form MGT-7 as on March 31, 2026 in compliance with the provisions of Section 134(3) and Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014. The same is available on the website of the Company at .

ADDITIONAL DISCLOSURES UNDER COMPANIES (ACCOUNTS) RULES, 2014

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the Financial Year along with their status as at the end of the Financial Year:

There were no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016, as amended, before the National Company Law Tribunal or other Courts as on March 31, 2026.

The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereto:

During the Financial Year under review, the Company has not made any settlement with its Bankers or Financial Institutions from which it has availed any loan.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Since the Company is an HFC, it is exempted from disclosing information regarding particulars of loans extended, guarantees given, and security provided in the ordinary course of business under the provisions of Section 186(11) of the Companies Act, 2013.

Nevertheless, the notes to the Financial Statements of the Company state the details of loans, guarantees, and investments made as required under the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Company has an explicit 'Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions' to ensure that all related party transactions are on an arm's length basis and in the ordinary course of business in adherence of the provisions of Section 188 of the Companies Act, 2013 and rules made thereunder and the SEBI (LODR) Regulations, 2015. Accordingly, all related party transactions entered during Financial Year 2025-26 were on an arm's length basis and in the ordinary course of business under the Act and were not material under the SEBI (LODR) Regulations, 2015.

All related party transactions entered into during the Financial Year, were presented to both the Audit Committee and the Board. The Audit Committee has granted omnibus approval for related party transactions as per the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. Further, in compliance with the Section 134(3)(h) of the Companies Act, 2013, a thorough disclosure has been made in Form AOC-2 as 'Annexure-6' which forms part of this Annual Report.

Additionally, in compliance with the SEBI and RBI Master Directions, the 'Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions' is given in 'Annexure-G' which forms part of this Annual Report and is available on the website of the Company at .

INTERNAL GUIDELINES ON CORPORATE GOVERNANCE

The Company regards corporate governance not merely as a regulatory obligation, but as a fundamental pillar of sustainable growth, ethical business conduct, and long-term value creation for all Stakeholders.

To embed these principles across its operations, the Board has instituted comprehensive Internal Guidelines on Corporate Governance, setting clear standards of integrity, transparency, and accountability. These guidelines are fully aligned with the Companies Act, 2013, the SEBI (LODR) Regulations, 2015, and the regulatory framework prescribed by the Reserve Bank of India.

The governance framework is supported by a comprehensive set of Board-approved policies, including Code of Conduct, 'Risk Management Policy', 'Related Party Transactions Policy', 'Vigil Mechanism/Whistle Blower Policy', Anti-Bribery and Anti-Corruption measures which help in promoting a culture of integrity and responsible decision-making across the organisation.

The Company has also established robust internal control systems, periodic internal audits and a dedicated compliance function to monitor adherence to these guidelines.

The Board and its committees regularly review governance practices and policy effectiveness, ensuring continuous strengthening of the Company's governance standards in line with evolving regulatory and business requirements.

The Internal Guidelines on Corporate Governance of the Company is available on the website of the Company at .

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(3)(c) and 134(5), of the Companies Act, 2013, and based on the information provided by the Management, the Board of Directors hereby gives the following statement:

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

the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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 and loss of the Company for that period;

the Directors had 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 frauds and other irregularities;

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

the Directors had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

BUSINESS OVERVIEW G FUTURE OUTLOOK

During the year under review, the Company reinforced its commitment to building a resilient and future-ready financial services franchise. This was achieved through disciplined credit practices, diversification of funding sources, and a strategic focus on sustainable growth, ensuring stability while driving long-term value creation.

An in-depth review of the Company's operations, performance and forward-looking perspective is set out in the Management Discussion and Analysis section of this Annual Report.

ACKNOWLEDGEMENTS AND APPRECIATION

The Board of Directors expresses its deep gratitude to all Stakeholders whose trust, commitment, and continued association have been instrumental in driving the Company's progress during the Year.

The Board also acknowledges the valuable guidance and oversight provided by the regulatory ecosystem, including the RBI, NHB, SEBI, Stock Exchanges i.e.. NSE and BSE. Their constructive engagement has played a vital role in shaping a resilient and well-governed financial framework.

The confidence reposed by Shareholders, Customers, Debenture Investors, Lending Institutions, and Banking Partners has remained the foundation of the Company's ability to operate responsibly and expand sustainably.

The Directors place on record their appreciation for the dedication and collective efforts of the Company's employees. Their discipline, agility, and sense of ownership have enabled the Company to navigate a dynamic credit environment while upholding strong underwriting standards, prudent risk practices, and regulatory compliance. The contribution of the Company's distribution network, sourcing partners, and service

associates is also recognized for strengthening outreach and operational effectiveness.

Looking ahead, the Board remains confident that the continued collaboration of all Stakeholders will empower the Company to advance its vision of responsible lending, maintain portfolio quality, and deliver sustainable value creation for the long term.

For and on behalf of the Board of Directors

AAVAS FINANCIERS LIMITED

Sandeep Tandon

Chairperson and Independent Director (DIN:00054553)

Date: June 04, 2026 Place: Mumbai

Registered and Corporate Office:

201-202, 2 nd Floor, Southend Square,

Mansarovar Industrial Area, Jaipur 302020, Rajasthan, India CIN: L65922RJ2011PLC034297

E-mail: Website: