for the Financial Year 2022-2023

To the members of SBFC Finance Limited (Erstwhile SBFC Finance Private
Limited)

Your Directors have pleasure in presenting the Sixteenth Annual Report
on the business and operations of your Company together with the audited standalone and
consolidated financial statements for the Financial Year ("FY") ended 31 March
2023.

Financial Performance

The highlights of the standalone financial results are given below:

(Rs in Million)


  

    
Particulars
    
FY23
    
FY22
  
  

    
Total Income
    
7,403.61
    
5,307.02
  
  

    
Total Expenditure
    
5,389.15
    
4,440.06
  
  

    
Profit before Tax
    
2,014.46
    
866.96
  
  

    
Tax Expense
    
516.5
    
221.75
  
  

    
Profit after Tax
    
1,497.96
    
645.21
  
  

    
Amount brought forward from previous year
    
1,711.27
    
1,194.50
  
  

    
Amount available for appropriation Appropriations:
    
1,497.96
    
645.21
  
  

    
Transfer to Reserve Fund u/s 45IC of the RBI Act, 1934
    
299.59
    
128.44
  
  

    
Balance carried forward to Balance Sheet
    
2,909.64
    
1,711.27
  




Your Company posted total income and net profit of K 7,403.61 Million
and K 1,497.96 Million respectively for the FY ended 31 March 2023, as against K 5,307.02
Million and K 645.21 Million respectively for the previous financial year ended 31 March
2022. The Company transferred an amount of K 299.59 Million to Reserve Fund under section
45-IC of the RBI Act, 1934.

Dividend:

The Directors do not recommend payment of any dividend on the Equity
Shares for the Financial year ended 31 March 2023 to conserve capital for future business
expansion.

Share Capital:

The Company allotted 6,25,00,000 equity shares of face value of K 10/-
each at K 40/- per share on 8 April 2022 on private placement basis.

Post allotment of Equity Shares as aforesaid, the issued and subscribed
share capital of your Company stands increased to 89,70,23,682 equity shares of the face
value of K 10/- each as on 31 March 2023.

Equity:

Your Company had Total Equity of K 17,273.28 Million and Goodwill of K
2,603.92 Million as on 31 March 2023. Net of Goodwill, your Company had a Tangible Equity
of K 14,669.36 Million.

Funding Capacity:

Your Company had total borrowings of K 33,824.22 Million as on 31 March
2023. Your Company also had collateralized borrowings (secured against a pool of loan
assets) of K

Your Company follows a prudent borrowing policy as of 31 March 2023, it
had a CRAR of 31.80% including Tier I CRAR of 31.61% and Tier II CRAR of 0.19%.

Employee Stock Options:

Employee wise details of options granted and Details of the Employees
Stock Option Scheme as per Rule 12(9) of Companies (Share Capital and Debentures) Rules,
2014 as on 31 March 2023 are attached in Annexure 4 of this Report.

Directors and Key Managerial Personnel

Appointment and Resignation of Directors:

The shareholders of the Company by resolution passed at Extra Ordinary
Annual General Meeting ("EOGM") which was held on 23 September 2022, approved
the appointment of Ms. Surekha Marandi (DIN: 06952573) as an Independent Non-Executive
Director of the Company to hold office for a term of five (5) consecutive years commencing
from 23 September 2022.

The Board approved re-appointment of Mr. Aseem Dhru (DIN: 01761455) as
the Managing Director for a period of five years with effect from 28 September 2022 at its
meeting on 21 May 2022 which was confirmed by the shareholders at the Extra Ordinary
General Meeting held on 15 October 2022.

The Board approved the re-appointment of Mr. Neeraj Swaroop (DIN:
00061170) as an Independent Non-Executive Director of the Company for a term of five (5)
years with effect from 21 November 2022 at its meeting on 21 May 2022 which was approved
by the shareholders at the Annual General meeting held on 27 June 2022.

In accordance with the applicable provisions of Section 152 of the Act,
Mr. Amol Krishna Jain (DIN:00334710), a nonexecutive director and Mr. John Mescall (DIN:
08385575), Nominee Director of the Company, retires by rotation at the forthcoming annual
general meeting of the Company. Being eligible, Mr. Amol Krishna Jain and Mr. John Mescall
has offered themselves for re-appointment as Directors. Brief particulars of Mr. Amol
Krishna Jain and Mr. John Mescall as required under the Secretarial Standard on General
Meetings issued by the Institute of Company Secretaries of India is being provided in the
Notice convening the 16th Annual General Meeting of the Company.

Resignation of Directors

Mr. Robin Banerjee (DIN: 00008893) was appointed as an Independent Non-
Executive Director of the Company with effect from 15 October 2022 and he resigned on 20
December 2022.

Mr. Rajeev Gupta (DIN: 00241501) ceased to be a Director of the Company
consequent upon his resignation as such Director with effect from 18 July 2022. The Board
has placed on record its deep appreciation for the valuable contribution made by Mr.
Rajeev Gupta and services rendered by him during his tenure as a Director of the Company

Information on the state of affairs of the Company:

Information on the operational and financial performance, among others,
is given in the Management Discussion and Analysis Report.

Review of Operations of the Company:

The total Assets under Finance increased from ^ 30,293.11 Million as on
31 March 2022 to ^ 44,526.92 Million on 31 March 2023. During the year, the Company has
securitized its assets.

Related Party Transactions:

All the related party transaction(s) that were entered into during the
financial year were on arm's length basis and in ordinary course of business. Pursuant to
the provisions of Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules,
2014, particulars of the contracts or arrangements with related parties referred to in
section 188(1) in Form AOC-2 is annexed as Annexure 5.

Credit Rating:

The brief details of the ratings received from the credit rating
agencies by the Company for its outstanding instruments is given in Annexure 3.

RBI guidelines:

The Company continues to comply with all the requirements prescribed by
Reserve Bank of India from time to time.

Statutory Auditors:

At the 15th Annual General Meeting of shareholders held on
27 June 2022, the shareholders approved the appointment of M/s Suresh Surana &
Associates LLP, Chartered Accountants, Mumbai (Firm Registration No. 121750W/W- 100010) as
Statutory Auditor of the Company for the FY 23 and FY 24 based on the recommendation of
the Board and the Audit Committee. The Auditor's Report by Statutory Auditor for the FY23
does not contain any qualification, reservation and adverse remark.

Number of meetings of Board:

During the financial year ended 31 March 2023 the Board met 8 (eight)
times. The details of the Board and various committee meetings are given in the Corporate
Governance Reportannexed as Annexure 2.

Audit Committee:

The Audit Committee comprised of the Directors namely, Ms. Surekha
Marandi, Chairperson, Mr. Neeraj Swaroop and Mr. John Mescall.

Declaration by Independent Directors of the Company:

The Company has received declaration under section 149(7) of the
Companies Act, 2013 from Mr. Neeraj Swaroop, Mr. Rajesh Mannalal Agrawal and Ms. Surekha
Marandi, Independent Directors.

Secretarial Auditors:

The Secretarial Audit Report as received from M/s. K Pratik &
Associates in the prescribed Form No. MR - 3 is annexed to this Board's Report and marked
as Annexure - 6. The Secretarial Audit Report does not contain any qualification,
reservation, adverse remark or disclaimer.

Directors' Responsibility Statement:

Pursuant to Section 134 of the Companies Act, 2013 (The Act'), the
Directors of the Company do hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting
standards had been followed and that there are no material departures thereof;

b. such accounting policies had been selected and applied 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 FY and of the profits
of the Company for the FY23;

c. proper and sufficient care had been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts had been prepared on a going concern basis;

e. internal financial controls to be followed by the company was laid
down and such internal financial controls are adequate and were operating effectively. and

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

Particulars of Loans, Guarantees or Investments:

Pursuant to section 186(11) of the Act, the provisions related to Loans
made, guarantees given and securities provided do not apply to the Company.

Vigil Mechanism:

The Company has established a Vigil Mechanism for its Directors and
employees to report their concerns or grievances. The said mechanism, inter alia,
encompasses the Whistle Blower Policy and it provides for adequate safeguards against
victimization of persons who use it.

Information regarding the mechanism and channel for reporting concerns
(including a third party reporting channel) are communicated to the relevant stakeholders.
The Whistle Blower Policy is available on the website of the Company, www.sbfc.com.

Prevention of Sexual Harassment of Women at Workplace:

The company has complied with provisions relating to the constitution
of internal complaints committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The Company has a policy on Prevention
of Sexual Harassment of Woman at Workplace. No case was reported during the FY under
review.

Energy Conservation, Technology Absorption and Foreign Exchange
Earnings & Outgo:

The information pursuant to Section 134(3)(m) of the Act read with
Companies Accounts Rules, 2014 is as follows:

a. The Company has no activity involving Conservation of Energy or
Technological or Technology Absorption;

b. The Company's Foreign Exchange Earning was Nil during the year under
review. The Company's Foreign Exchange Outgo was Rs. 84,97,054/- during the FY under
Report.

Corporate Governance Report:

The report on Corporate Governance for the Company is annexed as
Annexure 2 and forms an integral part of this Annual Report.

Risk Management:

The Company is exposed to different types of risks including interest
rate risk, business risk, liquidity risk, operational risk, credit risk including credit
concentration risk, reputation risk, technology risk and compliance risk. The Company has
formed Risk Management Committee and has developed and implemented Risk Management Policy
covering the risk mapping, trend analysis, risk exposure, potential impact and risk
mitigation process. A detailed exercise is being carried out to identify, evaluate, manage
and monitor both business and non-business risk.

Extract of Annual Return:

In accordance with the requirements under Section 92(3) and Section
134(3)(a) of the Act and the applicable rules, the annual return as on March 31, 2023 is
available on the website of the Company www.sbfc.com

Details of subsidiary/ joint ventures/ associate companies:

During the year a wholly owned subsidiary of the Company - SBFC Home
Finance Private Limited was incorporated on 6 December, 2022.

In terms of the provisions of Section 129(3) of the Companies Act,
2013, the Consolidated Financial Statements of the Company and its subsidiary, SBFC

Home Finance Private Limited is prepared and forms part of this
Directors Report.

Corporate Social Responsibility (CSR):

The CSR report for the FY23 is annexed to this report as Annexure 1.

Deposits:

No disclosure is required in respect of the details relating to the
deposits covered under Chapter V of the Act, as the Company has not accepted any deposit.

Status of the Company:

During the FY, there was no significant or material order passed by any
regulator or court or tribunal which would impact the status of the Company as a going
concern and the operations in future.

Internal financial controls

Your Company has in place, adequate and effective internal financial
controls with reference to financial statements, commensurate with the size, scale and
complexity of its operations. During the FY, such controls were tested and no reportable
material weaknesses in the design or operation were observed.

Statutory Disclosure:

a. Pursuant to the provisions of the Act, no fraud was reported by
auditors of the Company during FY23.

b. The provisions of section 148 of the Act, are not applicable to the
Company. Accordingly, there is no requirement of maintenance of cost records as specified
under section 148(1) of the Act.

c. No material changes and commitments occurred since the end of FY
till the date of this Report, which may affect the financial position of the Company.

d. There was no change in the nature of business of the Company.

e. The Company has complied with the secretarial standards as
applicable to the Company.

f. There is no application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year

g. 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 thereof: Not applicable.

Performance evaluation of the Board:

Pursuant to the provisions of the Act, 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 is given below:

The Nomination and Remuneration Committee ("NRC") has
approved the criteria for performance evaluation, based on which the evaluation sheet were
circulated to the Board members for seeking feedback of the directors with regards to the
performance of the Board, its Committee, and i ndividual directors.

The directors sent their feedback on the evaluation sheet to Company
Secretary. The performance evaluation was then noted and discussed by the NRC at its
meeting held on 24 March 2023 and the Board at its meeting held on 27 April 2023.

In the opinion of the Board, the Independent Directors have the
integrity, expertise and experience (including the proficiency) to function effectively.

Acknowledgement

Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders, debenture holders, debenture
trustee, bankers, financial institutions, regulatory bodies and other business
constituents during the financial year under review. Your Directors also wish to place on
record their deep sense of appreciation for the commitment displayed by all executives,
officers and staff, resulting in the successful performance of the Company during the
financial year.


  

    
Sd/-
    
Sd/-
  
  

    
Aseem Dhru
    
Neeraj Swaroop
  
  

    
Managing Director & CEO
    
Independent Director & Chairperson
  
  

    
DIN: 01761455
    
DIN: 00061170
  
  

    
Address: B-12, 12th Floor, Ahuja Tower,
    RajabhauAnant Desai Marg, Prabhadevi, Mumbai - 400025
    
Address: 1104, Signia Isles, G Block, Near
    Dhirubhai International School, Bandra Kurla Complex, Bandra (East), Mumbai - 400051
  
  

    
Place: Mumbai
    

  
  

    
Date: 27 April, 2023