Dear Shareholders,

Your Directors are pleased to present their Thirty-third Report together with the audited financial statements of your Company for the Financial Year ended 31st March 2023 ("FY2023").

Rs in crores

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

Total Income for the year was Rs.12,832.4 crores as compared to Rs. 11,400.5 crores in FY2022. Revenue from operations for the year was Rs.12,699.5 crores as compared to Rs. 11,317.6 crores in FY2022.

Profit Before Tax ("PBT") for the year was Rs. 2,803. crores as compared to Rs. 1,549.4 crores in FY2022. Profit After Tax ("PAT") (Net of non-controlling interest) for the year was Rs.2,072.4 crores as compared to Rs. 1,136.9 crores in FY2022.

During the year under review, the Company has disbursed 49,541.4 crores as against 27,581.5 crores during the previous year, an increase of 79.6% over the same period in previous year. Total Income was 11,056.1 crores for the year ended 31st March 2023 as compared to 9,718.8 crores for the previous year.

PBT grew by 98.8% at 2,698.1 crores as compared to Rs. 1,356.9 crores for the previous year. PAT grew by 100.7% at 1,984.3 crores as compared to Rs.988.8 crores in the previous year.

The Assets Under Management ("AUM") stood at Rs.99,565 crores as at 31st March 2023 as against Rs. 79,797 crores as at 31st March 2022. Gross Stage 3 improved due to focused collection initiatives and macro tailwinds. The Gross Stage 3 loan assets stood at Rs. 3,717 crores, lower than that on 31st March 2022 (Rs. 4,976 crores). The Gross Stage 3% to Business Assets declined from 7.7% as at 31st March 2022 to 4.5% as at 31st March 2023.

No material changes and commitments have occurred after the closure of the FY2023 till the date of this Report, which would affect the financial position your Company.

The Company has updated the Expected Credit Loss ("ECL") model with the latest set of data at periodic intervals for the year ended 31st March 2023, to capture the significant changes in economic and market drivers, customer behaviours and government actions to reduce the risk of uncertainty due to judgements and estimations considering economic outlook data as per government agencies around the growth parameters. The Company also continues to undertake risk assessment of its credit exposures in addition to the model determined ECL provision, to reflect deterioration in the macroeconomic outlook and uncertainty in credit evaluations. The Company held provisions (expected credit loss on financial assets) aggregating to 3,294.7 crores as on 31st March 2023 ( 4,508.8 crores as on 31st March 2022).

The Company's net Non-Performing Assets ("NPA"), net Stage-3 assets ratio stood at 1.9% as at 31st March 2023 as against 3.4% as at 31st March 2022.

The Company proposes to transfer an amount of 398.1 crores to the Statutory Reserves, in compliance with Section 45-IC of the Reserve Bank of India Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the General Reserve for the year under review. An amount of 6,376.6 crores is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient liquidity buffer fulfil its obligations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privately placed or public issue of debentures, as per the provisions of Section 71 of the Companies Act, 2013 read with Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014. The Company in respect of secured listed non-convertible debt securities maintains 100% security cover or higher security cover as per the terms of Information Memorandum and/or Debenture Trust Deed, sufficient to discharge the principal amount and interest thereon. of Dividend

Considering stellar performance and strong cash flows, your Directors are pleased to recommend a dividend of 6 per equity share (300%) on the face value of 2 each, for FY2023 vis- a- vis 180% dividend in FY2022. Dividend is subject to approval of the Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source. The dividend outgo for FY2023 will absorb a sum of 741.3 crores, which constitutes 37.35% pay out of Company's Standalone Profits for FY2023 and the same is within the ceilings specified in the Reserve Bank of India ("RBI") guidelines on Declaration of Dividend by NBFCs dated 24th June 2021.

The Company has not paid any Interim Dividend during the financial year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy and in compliance with the framework prescribed in RBI guidelines on Declaration of Dividend by NBFCs.

In terms of the provisions of the Income-tax Act, 1961, the Company will make payment of dividend after deduction of tax at source ("TDS") as per the prescribed rates, to those shareholders whose name appear as beneficial owner/ member in the list of beneficial owners to be furnished by National Securities Depository Limited/ Central Depository Services (India) Limited in case of shares held in dematerialised form, or in the Register of Members in case of shares held in physical form, as at the close of business hours on 21st July 2023 (Book Closure).

The Company has by email dated 17 th May 2023, informed the Members about the deduction of tax at source on dividend. As it is imperative for the Company to receive the relevant information and declarations from shareholders to determine the details of the TDS rates applicable to different categories of shareholders, shareholders are requested to submit the necessary documents as mentioned in the aforesaid communication, on or before 10th July 2023. The said communication is also uploaded on the website of the Company at https://www.mahindrafinance.com/ investors/disclosures-reg-46-62/investor-information.

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of 7,19,604 being the unclaimed dividend of the Company for FY2015 to the Investor Education and Protection Fund ("IEPF"). The details of total amount(s) lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy was amended by the Board to inter-alia, incorporate the provisions pertaining to eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc. in accordance with the Reserve Bank of India guidelines on declaration of dividend dated 24^th June 2021.

The revised Dividend Distribution Policy is appended as "Annexure I" and forms part of this Annual Report. The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies

Your Company's main line of business is financing of automobiles and tractors for customers who use them mainly for earning their livelihood and for their personal mobility. It also focusses on other businesses like pre-owned car loans, housing finance, SME financing, insurance broking, mutual fund distribution, fixed deposits etc. Additionally, your Company is also foraging into other areas like leasing, consumer finance and loan against property. By offering a wide range of easy and affordable products and services tailored to fit their cashflow cycles, your Company continues be a vital financier to its customers in semi-urban and rural areas. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors. Additionally, your Company is expanding its connect with other leading Car Original Equipment Manufacturers (OEMs).

A. Deeper Physical Reach

Your Company has an extensive PAN-India distribution network with 1,386 offices spanning across 27 States and 7 Union Territories as on 31st March 2023. Due to its extensive office network, your Company is less dependent on any one region in the Country. Additionally, some regional, climatic, and cyclical dangers, such as heavy monsoons or droughts, are lessened by geographic diversification. The vast office of the Company also gains from a decentralised authorisation system, which enables each office to organically build its business and use its client connections by providing financial products like vehicle financing, pre-owned car loans, housing finance, SME financing, insurance broking, mutual fund distribution, fixed deposits etc. There are a few guardrails defined centrally to ensure asset quality standards. Your Company believes that its efficient office network in rural and urban areas has afforded an opportunity to meet the financial needs of the people of India by identifying and comprehending their needs and aspirations.

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As mobile technology continues to evolve, your Company has placed emphasis on implementation of mobile app ("MF Customer app") as a means of providing customer support, fostering brand loyalty, raising customer retention rates, of inviting new customers and earning income. The MF Customer app provides customers with a variety of services right at their fingertips, saving time and money as compared to visiting a physical branch. The app, which is available in 11 languages (including 9 Indian regional languages), enables customers to apply for car loans, access and manage their loan accounts and make EMI of payments using a variety of payment methods, including debit cards, net banking, UPI, and wallets. to In FY2023, the app users have increased by 22% from the previous year (8.8 lakh users in FY2023 as compared to 7.2 lakh users in FY2022). Your Company has also offered mobile app to its dealer partners & dealer salesmen on PAN India basis. Your Company also launched specialised end to end journey named ‘Used Car Digi Loans' in association with Car&Bike (by Mahindra First Choice Wheels) and Rupyy (by CarDekho) to enable customers to get customised loan offers from your Company enabling them to take faster buying decisions.

As digitisation picks up pace, the Company's digital ambitions have grown multi-fold in the areas of improving business performance, better credit underwriting, enhancing customer experience, developing customised products, rethinking existing products.

The rollout of ‘QuickCheck', an offer generation engine for premium target base of customers booking Mahindra vehicles like Scorpio N, XUV

300/400/700 at dealership helps dealers and sales team of automotive vertical to pitch right offers from your Company to the premium base of customers on the fly at showroom itself. Also, assists dealers and sales teams in the automotive vertical in quickly and effectively presenting the best offers from the Company to the premium client base in-store.

‘OneApp', an application to boost experience of field employees, has changed the digital posture of the way we did business earlier. Simultaneously, we continue to put a lot of effort on real-time digital utilities for KYC, NPA Stamping, and e-NACH while also strengthening our core through new partnerships for payment gateways, generating digital leads, managing collections, cloud base omnichannel customer experience etc. As part of our endeavour to communicate with our customers across a variety of digital platforms, we have initiated set up of an end-to-end hyper personalised marketing tech platform. We have started several digital interventions at MMFSL, spanning all employee categories (field force, support staff, office, remote staff, work home employees), across all geographic regions, as a part of our ongoing effort to improve our employee experience.

The Company also continues to expand the penetration of data sciences and artificial intelligence. The implementation of strategic initiatives in business and collections has benefited greatly from the use of business intelligence dashboards and insights. In terms of business lines and volumes, the use of Machine Learning models in lending and retention has increased. Additionally, we regularly monitor risk minimisation on the technology security front by using continuous risk management procedures that are compliant with ISO 27001:2013 and the COSO

framework. Your Company regularly assesses risk, which involves implementing new technology, keeping track of it and having external/internal specialists audit the same. By implementing manual and automated technologies, the risks discovered during the assessment are suitably managed by mitigating, minimising, or transferring the risks. In accordance with the government's planned data privacy initiatives, we are adopting data privacy practises.

Your Company has advantage when using analytics and artificial intelligence thanks to its operations in the rural and semi-urban markets for more than 25 years and dealing with a variety of profiles. Your Company has introduced its own algorithms to provide low-risk customers with quicker loan approvals at variable interest rates, which will aid in growing market share, enhancing portfolio quality and boosting profitability. The integrated activation of Digital, Analytics and Technology will significantly improve customer acquisition, retention, cross-selling and collections.

The customer and competitive environment is ever changing. A need was felt to recraft your Company's vision to help steer its growth over the next few years. Therefore, the management with approval of the Board has redefined the Vision for your Company which aims at positioning your Company as "A leading and responsible financial solutions partner of choice for emerging India"

This new vision encompasses our commitment fromto service our customers in emerging India in a responsible manner and simultaneously achieve profitable growth. It further establishes our commitment to be a provider of comprehensive financial solutions, beyond lending. The phrase "partner of choice" holds significance as it reflects our dedication to prioritising digital initiatives, enhancing customer experience and expanding our range of products.

The Mission is to deliver a sustainable profitable growth characterised by continued growth including 2X Assets Under Management ("AUM"), stable asset quality (Gross Stage-3 assets < 4%), increased Return on Assets ~ 2.5% and improved operating leverage (Cost to Assets ~2.5%) by 2025.

Your Company will keep on further refining its risk policy norms and underwriting to ensure that asset quality continues to stay top-class.

Your Company plans to scale its non-vehicle lending portfolio which includes SME loans, loan against property, personal loans, and other segments. These businesses have a promising future and the Company believes that the group strength positions us to participate in this growth journey.

The Company's Leasing and Subscription platform ‘Quiklyz' which facilitates the customers to access new cars without the hassle of car ownership is helping to scale both the Corporate and Personal segments. It was launched initially in the metro cities and has now scaled to 15 other locations.

To summarise, your Company will focus on continuing to strengthen its dominance as an auto financier in emerging India, while also increasing the contribution of non-vehicle business to grow its AUM from 65,000 crores in FY2022 to 2X by FY2025.

For more information on the performance of the Company, risk management framework and initiatives please refer to Management Discussion and Analysis section forming part of this Annual Report.

In order to ensure that the Company's ongoing activities and emerging opportunities in the financial services space for furtherance of Company's main objects and activities connected thereto in context of its present business are explicitly mentioned and are within the sphere of Memorandum of Association ("MOA") and to ensure cohesiveness and comprehensiveness of the MOA, the Board of Directors have subject to approval of the shareholders of the Company, approved amendment to a sub-clause in the "Matters which are necessary for furtherance of the objects specified in Clause (A) of MOA".

Your Company currently holds 80% of the paid-up equity share capital of Mahindra Insurance Brokers Ltd ("MIBL") and the remaining 20% is held by Inclusion Resources Private Limited ("IRPL").

Pursuant to the approval of the Board and in accordance with the agreement between the two shareholders (i.e., Company & IRPL), your Company has entered into agreement to purchase 20% stake in MIBL, subsidiary of the Company, from IRPL at an aggregate consideration of 206.39 crores, on 21st October 2022 subject to approval of Insurance Regulatory and Development Authority of India ("IRDAI"). An application seeking approval has been filed with IRDAI on 25th November 2022. Post receipt of approval from IRDAI, transfer of shares and payment of consideration would be effectuated. Once the acquisition is completed, MIBL will become a wholly owned subsidiary of your Company.

There has been no change in the nature of business and operations of the Company during the year under review.

The Company has always endeavoured to maintain the highest standards of compliance and culture within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the Reserve Bank of India ("RBI"), from time to time. The Company continues to be in compliance with the norms pertaining to capital adequacy, non- performing assets etc. Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

The Scale Based Regulations ("SBR") were notified by the Reserve Bank of India ("RBI") vide its circular dated 22^nd October 2021, effective from1 st October 2022. Pursuant to the Scale Based Regulations, the RBI has classified your Company as NBFC in Upper Layer ("UL"). Your Company has ensured full compliance with various requirements prescribed under SBR for NBFC-UL within the specified III timelines including adopting policy for enhanced regulatory framework, Internal Capital Adequacy Assessment Process Policy (ICAAP), complying with large exposure norms, setting limits for sensitive sector exposure etc.

In compliance with SBR, the Board has appointed a Chief Compliance Officer to oversee the compliances as applicable to the Company. The Board has also adopted Compliance Policy in compliance with SBR effective 28 th March 2023.

Your Company has appointed an Internal Ombudsman ("IO") in compliance with the RBI Circular dated 15^th November 2021. A Report of number of complaints escalated to IO and status of disposal of such complaints during the period under review is being placed before the Board for its review in compliance with the aforesaid RBI circular.

During the year under review, Reserve Bank of India ("RBI") focussed on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth. Accordingly, RBI raised the REPO Rate by 250 bps to take the REPO rate from 4% in April 2022 to 6.50% by March 2023. Liquidity conditions remained tight throughout the year with the banking sector liquidity falling from an estimated of over 7.50 lakh crore at the beginning of the financial year to around 1 lakh crore at the end of the financial year.

Inflation in India also continued to be on a higher side throughout the year. After touching a high of 7.79% April 2022, Consumer Price Index ("CPI") inflation has moderated to 5.66% in March 2023 which is below the RBI's upper threshold of 6%. Globally, inflation continued at elevated levels, with inflation in US, UK and Euro Zone significantly higher than the target range for these economies. The rupee continued weaken against the US Dollar throughout the year, in the wake of high probability of global recession. The rupee fell from 75.72/$ to low of over 83/$ before closing back at around the 82/$ mark.

In line with the domestic macro indicators i.e. high inflation, weakening rupee, higher credit growth vis a-vis deposit growth and unfavourable global macro-indicators i.e. higher interest rates, high inflation and a high probability of recession in the developed economies like US, UK and Euro Zone, the interest rates in India also continued to rise throughout the year. The 1 Year and 2 Year G Sec curve moved from 4.81% and 5.49% in April 2022, to 7.18% and 7.10% respectively in March 2023 along with the movement in REPO Rate. During the year Interest cost on borrowed funds for the company increased from 6.68% as of 31^st March 2022 to 7.53% as of 31st March 2023.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc. and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

During the year, your Company successfully completed four securitisation transactions aggregating to 3954.85 crores.

During the year under review, your Company raised Secured/Unsecured Redeemable Non-Convertible Debentures ("NCDs") of 7,508.61 crores ( 9,804.70 crores being the face value of total amount raised) on a private placement basis, in various tranches, including 380 crores ( 380 crores being the face value of total amount raised) through Unsecured Redeemable Non-Convertible Subordinated Debentures eligible for Tier II Capital and 2.25 crores through Partly paid-up NCDs. The NCDs are listed on the debt market segment of BSE Limited.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit in Committee on a quarterly basis.

Your Company is in compliance with the applicable guidelines issued by the RBI and Securities and Exchange Board of India in this regard.

There has been no default in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. As on 31st March 2023, there is no unpaid/unclaimed interest on NCDs issued on a private placement basis. With respect to the three public issuances of NCDs made by the Company, Principal payment of 10,93,000/- and Interest of - 48,96,963/- is unclaimed by the investors as on 31st March 2023.

As at 31st March 2023, the Company had Commercial Paper ("CPs") with an outstanding amount (face value) of 4,075 crores. CPs constituted approximately 5.4% of the outstanding borrowings as at 31^st March 2023. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company, have subject to the approval of the shareholders of the Company to be obtained at the ensuing 33^rd Annual General Meeting, increased the overall borrowing limit from 90,000 crores to 1,10,000 crores.

The Company had an aggregate outstanding borrowings of 74,945.86 crores as on 31 st March 2023 as shown hereunder:

CRISIL Limited upgraded your Company's long term credit rating to CRISIL AAA/Stable w.e.f. 6th January 2023. With this upgrade, your Company enjoys highest rating for its long term and short term borrowing programmes from all the credit rating agencies that it works with. Your Company believes that its credit ratings and strong brand equity enables it to borrow funds at competitive rates. The Company has been assigned highest credit rating on all its instruments by leading rating agencies. The details of ratings are given in the Corporate Governance Report, forming part of this Annual Report.

As on 31st March 2023, the Capital to Risk Assets Ratio ("CRAR") of your Company was 22.5% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 19.9% and Tier II capital adequacy ratio stood at 2.6% respectively.

The issued, subscribed and paid-up Equity Share Capital as on 31st March 2023 was 247.1 crores, consisting of 123,55,29,920 Equity Shares of the face value of 2 each, fully paid-up.

There was no change in the issued, subscribed and paid-up share capital during the year under review. As on 31st March 2023, none of the Directors of the Company hold instruments convertible into equity shares of the Company. ESOPs granted to the Vice Chairman and Managing Director of the Company under the Company's Employee Stock Option Scheme would vest as per the applicable vesting schedule.

Global Economy remains resilient and appears to be in a position wherein gradual recovery with the blow of Russia Ukraine war is underway. Supply chain disruptions which has led to shortage in availability of products are unwinding. Inflation which has been a cause of continuous concern seems to now be retracing back. Growth looks to rebound in 2024 after the bottoming out in 2023. However, there seems to be turbulence beneath the surface with inflation continuing to be stickier than anticipated, sharp effect of policy tightening after a long cycle of benign interest rates resulting in sizable markdowns on long term fixed rate investments. Further, turmoil in the banking system in some advanced economies have triggered risk aversion, flight to safety and heightened volatility. The state of financial health of the system shall depend on the ability of policy makers to take swift actions by building greater oversight. In contrast, the pace of growth in emerging markets and developing nations are even stronger with growth being visible at 4.5% (in the fourth quarter of the current year) compared to 2.8% (in the fourth quarter of 2022).

Economic activity remained resilient in the last quarter of FY2023. A strong Rabi production, expansion in industrial production and growth in core industries all indicates positive growth in the agricultural and industrial activity. The inflation trajectory for FY2024 would be shaped by both domestic and global factors. Global financial market volatility has surged, with potential upsides for imported inflation risks. The expectation of a good rabi crop should strengthen rural demand, while the sustained buoyancy in contact-intensive services should support urban demand. Government's thrust on capital expenditure continues and continuing strong capacity utilisation in manufacturing, double digit credit growth and the moderation in commodity prices are expected to bolster manufacturing and investment activity. The external demand drag could accentuate, given slowing global trade and output. Protracted geopolitical tensions, tight global financial conditions and global financial market volatility pose risks to the outlook. Taking all these factors into consideration, real GDP growth for 2023-24 is projected at 6.5% with Q1:2023-24 being the highest at 7.8%.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Your Company practices a culture that is built on core values and ethical governance practices. Your

Company is committed to Integrity and transparency in all its dealings and places high emphasis on business ethics. The Board of your Company exercises fiduciary responsibilities in the widest sense of term endeavours to enhance long-term shareholder value. The Governance framework is anchored by the clearly defined policies and procedures covering areas such anti- bribery and anti-corruption, Prevention of Sexual Harassment at Workplace and Whistle Blower Policy. A Report on Corporate Governance along with a Certificate from M/s. Makarand M. Joshi & Co certifying compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

During the current year, your Company has met multiple investors and analysts both domestic and international. These sessions were undertaken through a mix of one-on-one or group meetings. Your Company also participated in multiple domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-Deal Roadshows ("NDRs"). Having meetings in virtual format (through conference calls and video-conferencing) enabled accessing a larger investor base. Your Company holds quarterly and annual earnings calls through structured conference calls and/or weblinks, details of which are made available to public through the Company's website and stock exchange(s).

During these meetings/ earnings calls, the interactions are based on generally available information accessible to the public in a non-discriminatory manner. No unpublished price-sensitive information is shared during such meetings. Your Company believes in transparent communication and have been voluntarily disclosing critical information regarding Company's performance through monthly updates.

As a good governance practice, your Company voluntarily observes a ‘Silent / Quiet period' starting from 1st day of the start of the month after the end of the quarter for which the financial results are to be announced till the time of announcement of said results. During this period, no interactions with investors/ analysts/funds are held to discuss unpublished financial performance of the Company to ensure protection of the Company's Unpublished Price Sensitive Information ("UPSI").

The Consolidated Financial Statements of your . Company, its subsidiaries, associate/joint venture for FY2023, prepared in accordance with the relevant provisions of the Companies Act, 2013 ("the Act") and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act, the Standalone and Consolidated Financial Statements of the Company, along with relevant documents and financial statement of each of the subsidiaries of the Company are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investors/ disclosures-reg-46-62/financial-information

A report on the performance and financial position of each of the Company's subsidiaries, associate/ joint venture is included in the Consolidated Financial Statements and the salient features of their financial statements and their contribution to overall performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with Rule 8(1) of The Companies (Accounts) Rules, 2014, is provided in Form AOC-1, annexed as ‘Annexure A' to the Consolidated Financial Statements and forms part of this Annual Report.

Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") defines a "material subsidiary" to mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth . respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.

Accordingly, Mahindra Rural Housing Finance Limited is a material, debt listed subsidiary, of your Company.

Mahindra Rural Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing loans for purchase, renovation and construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of 1,349.8 crores as compared to 1,377.5 crores for the previous year, decline of 2% over previous financial year. Profit Before was 54.4% lower at 26.3 crores as compared to 57.7 crores for the previous year. Profit After was 54.5% lower at 21.7 crores as compared to 47.7 crores in the previous year.

During the year under review, MRHFL disbursed loans aggregating to 2,004 crores as against 1,602 crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to the customers in villages with an average annual household income of less than 3 lakhs. During the year under review, MRHFL disbursed home loans to more than 59,000 households. MRHFL is expanding its reach to provide affordable housing loans in chosen geographies.

During the year under review, Mahindra Insurance Brokers Limited ("MIBL"), subsidiary of the Company engaged in the business of Direct and Re-insurance Broking, serviced approximately 2.9 million insurance cases, for both Life and Non-Life Retail business. The customised Group Credit Term Life increased from 5,02,508 lives covered with a Sum Assured of 19,519 crores in FY2022 to 6,03,542 lives covered with a Sum Assured of 25, 577 crores in FY2023. A substantial portion of Group Credit Term Life continues to be covered in the rural markets. There is growth of 46% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from 2,768.1 crores in FY2022 to 4,036.8 crores in FY2023. The Total Income increased by 23% from 348 crores in FY2022 to 426.5 crores in the FY2023. The Profit Before Tax decreased by from 70.4 crores to 46.1 crores and the Profit After Tax decreased by 34% from 51.9 crores 34.4 crores during the same period.

MIBL has been able to extend the benefit of insurance to over 4 lakh villages across India.

Mahindra Manulife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra Manulife Mutual Fund ("Mutual Fund"). As on 31st March 2023, MMIMPL was acting as the investment manager to 20 schemes of the Mutual Fund. The Average Assets Under Management in these 20 schemes were 9,691 crores as on 31st March 2023 as compared to 8,839 crores as on 31st March 2022, delivering a growth of 9.6% in assets. Of these assets, 8,294 crores were in equity and hybrid schemes in March 2023, as compared to 5,911 crores in March 2022, a growth of 40%. MMIMPL has empanelled 23,983 distributors and now has 5,77,009 investor accounts in these 20 schemes.

During the year under review, the total income Tax of MMIMPL was 44.1 crores as compared to 35.3 crores for the previous year. The operations for Tax the year under consideration have resulted in a loss of 30.9 crores as against a loss of 38.1 crores during the previous year.

Mahindra Manulife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra Manulife Mutual Fund ("Mutual Fund").

During the year, MMTPL earned trusteeship fees of 73.8 lakhs and other income of 7.3 lakhs as compared to 72.6 lakhs and 3.5 lakhs, respectively, for the previous year. MMTPL recorded a profit of 16.1 lakhs for the year under review compared to a profit of 22.8 lakhs in the previous year.

Your Company holds 58.2% stake in Mahindra Ideal Finance Ltd (Sri Lanka) {"MIFL"} with a total investment of 77.97 crores. Leveraging on the Mahindra Finance's expertise of over 26 years in the financial services sector and the local management's expertise of the domestic market MIFL is poised to build a leading financial services business in Sri Lanka. During the year under review, Sri Lanka went through unprecedented political and economic crisis which triggered an acute shortage of foreign exchange. Despite challenging circumstances, MIFL registered a growth in top line as well as has remained profitable. During the year under review, MIFL registered a total income of LKR 1,924 million as compared to LKR 1,322 million for the previous year, registering a growth of 46%. Profit Before Tax was 51% lower at LKR 153 million as compared to LKR 310 million for the previous year. Profit After Tax was 64% lower at LKR 87 million as compared to LKR 239 million in the previous year.

With 7 new branches opened during the year, the Company increased its footprint to 27 locations in the island nation.

Mahindra Finance CSR Foundation was incorporated on 2^nd April 2019 as a wholly-owned subsidiary of Mahindra Finance registered under Section 8 of the Act, to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

MFUSA's retail and dealer disbursement registered a decrease of 3.9% to USD 877.2 million for the year ended 31st March 2023 as compared to USD 912.8 million for the previous year.

Total Income increased by 13% to USD 62 million for the year ended 31st March 2023 as compared to USD 54.9 million for the previous year. Profit before tax was 15% lower at USD 19.8 million as compared to USD 23.2 million for the previous year. Profit tax declined by 14% to USD 15 million as compared to USD 17.4 million in the previous year.

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

As on 31st March 2023, your Company has mobilised funds from Fixed Deposits to the tune of 5,541.8 crores, with an investor base of over 92,880 investors. Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") holders. Your Company periodically sends various intimations via SMS, e-mails, post, courier etc., to its investors as well as sends reminder emails to clients whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/ broker portal and seamless investment process for its employees.

Your Company has rolled out several initiatives aimed at offering a superior experience to fixed deposit holders. Some key ones include :

• An integrated web portal has been developed to facilitate online application/ online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

• Online submission of Forms 15G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

• TDS certificate(s) are made available on the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

• In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

• An advanced version of Customer Relationship Management ("CRM") has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service. An integrated service portal (E-Sarathi) has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

• The process of recording of Central Know Your Customer ("CKYC") details of the Depositors has been strengthened by introducing various control measures.

• Separate categorisation of VIP customers to address the queries with a dedicated Relationship Manager is introduced.

As at 31st March 2023, 4,883 Deposits amounting to 4.9 crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 4,678 Deposits amounting to 4.5 crores. There has been no default in repayment of deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company the disclosures required as per Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 ("NBFC Regulations"), regarding unpaid/unclaimed public deposits as on 31st March 2023, is furnished below: i. Total number of accounts of Public Deposits of the Company which have not been claimed by the depositors after the date on which the deposit became due for repayment: 4,883 ii. Total amounts due under such accounts remaining unclaimed beyond the dates referred to in clause (i) as aforesaid: 4.9 crores

1. Penny drop testing one month prior to maturity and interest pay out process is being conducted to reduce rejection cases.

2. Deposit holders are being reached out via SMS/ Calls/ Email/Physical letters, as applicable.

3. In case of death of depositors, claim settlement process is advised to joint depositors/nominee/ legal heir, as the case may be;

4. Unclaimed FDs are being validated with the depositor's Loan account with the Company , if any.

5. In case the cheque is undelivered, the Company deposits the amount in the bank account of the customer, after necessary confirmations.

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules") as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") established by the Central Government. Further, interest accrued on the deposits which remain unclaimed for a period of seven years from the date of payment are also required to be transferred to the IEPF under Section 125(2)(k).

During the year, the Company has transferred to the IPEF an amount of 0.08 crores being the unclaimed amount of matured fixed deposits and 0.05 crores towards unclaimed/unpaid interest accrued on the Deposits. The concerned depositor can claim the Deposit and/or interest from the IEPF by following the procedure laid down in the IEPF Rules.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulation 34[3] and 53[f] read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

Your Company, being an NBFC registered with RBI and engaged in the business of giving loans in ordinary course of its business, is exempt from complying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to loans.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as applicable, are given in Note no.51(iv) of the Standalone financial statements, forming part of this Annual Report.

• Received a special commendation for CSR Program ‘Swabhimaan' at the CSR Journal Excellence Awards.

• Recognised for persistent & innovative efforts in promoting CSR by The Institute of Company Secretaries of India during the 7 th ICSI CSR Excellence Awards 2023.

• Awarded CSR Times Awards 2022 Gold category for CSR Initiatives under Swabhimaan in the area of skill development at the 9th National CSR Times Award 2022, New Delhi.

Became 1st NBFC in India to join the United Nations Global Compact Network for taking steps towards responsible business actions to create a better world for our future generation.

• Featured under the Leadership Index for performance under ESG domain in the 2^nd Edition of CRISIL Sustainability Yearbook.

• Improved CDP rating level to "B" and placed under leadership category for taking steps towards managing its carbon emissions.

• Included in the renowned FTSE4 Good Emerging Markets Index series for ESG Performance for the 4th Consecutive time.

• Won Silver Award for Aapke Safar Ka Saathi testimonial video series at the RMAI Flame Awards Asia 2022.

• Great Place to work certified 2023 & Top 25 Great Place to Work in BFSI 2023.

• Ranked 2nd in Financial Services Industry (Large Category) by AmbitionBox Best Places to Work in India Employee Choice Award.

• Recognised as Happiest Workplace for Women at India Today RPG Happiness at Workplace Summit & Awards 2023.

Employee Stock Options are recognised as an effective instrument to attract and retain talent and align the interest of employees with that of the Company, thereby providing an opportunity to the employees to participate in the growth of the Company and to create long-term wealth in the hands of employees.

During the year under review, no options were granted to the eligible employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme 2010 ("2010 Scheme"). The Company does not have any scheme to fund its employees to purchase the shares of the Company.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEBSE Regulations") and there were no amendments to the Scheme during FY2023. A Certificate from M/s. Makarand M. Joshi Co., Secretarial Auditor of the Company for FY2023, certifying that the Company's above-mentioned Scheme has been implemented in accordance with the SBEBSE Regulations and the resolution passed by the Members, would be made available for inspection by the Members through electronic mode at the Annual General Meeting ("AGM") scheduled to be held on 28th July 2023.

The applicable disclosures as stipulated under SBEBSE Regulations for the year ended 31st March 2023, with regards to the 2010 Scheme and Company's stock option trust is uploaded on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investors/disclosures-reg-46-62/financial-information Considering limited number of options in the 2010 scheme and with a view to continue the practice of rewarding performance of the employees, creating ownership culture and to retain, motivate and attract talents in light of growing business and to align interests of shareholders with that of employees, the Board of Directors of your Company, have subject to the approval of the shareholders, approved a new Restricted Stock Unit Plan namely ‘Mahindra and Mahindra Financial Services Limited-Restricted Stock Unit Plan 2023' ("MMFSL RSU Plan-2023"), contemplating grant of 59,44,320 Restricted Stock Units ("RSUs") exercisable into equivalent equity shares, constituting 0.48% of the paid-up share capital of the Company as on 31^st March 2023.

Necessary resolutions seeking members approval for the MMFSL RSU Plan-2023 and related matters are incorporated in the Notice convening 33^rd Annual General Meeting of the Company.

In line with the Mahindra Group's motto: ‘Rise for Good', your Company is gearing up to be future ready by making "Sustainability" as an integral part of the business strategy and risk framework. Sustainability has been a part of organisation's philosophy since its establishment. Your Company's growth story mirrors the story of India's transformation and its vision for financial inclusion. It is with this purpose that the company works with and extends its services to the communities in rural areas with the aim to change & their lives. At Mahindra Finance, Sustainability is imbibed in its business philosophy and is seen as part of its intrinsic DNA. Your Company's focus on rural customers and its constant endeavour is enabling them to Rise by empowering people and creating shared value for all. Your Company's approach and accomplishments on Sustainability echoes its mission of transforming rural lives and contributing to people, planet and profit. Your Company is constantly making a positive impact on the society in areas of health, education, environment, skill enhancement, rural development and technology incubation.

Your Company and its subsidiaries have been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings Mahindra Rural Housing Finance Limited helps people build their homes through affordable housing finance solutions. Mahindra Insurance Brokers Limited secures their life and assets with insurance solutions and Mahindra Manulife Investment Management Private Limited offers investment options through its asset management solutions. Your Company lays strong emphasis on customer centricity with a customer base spread across different villages in India, with majority of them belonging to the ‘Earn and Pay' segment.

Your Company commenced its journey towards reporting Sustainability performance in the year 2008-09 through Mahindra Group's Sustainability Report. In FY2013 the Company released its first Independent Sustainability Report with the theme "Forward focus to transform lives". In FY2021, the

Company released its first Integrated Report with the theme "Care above Everything else".

The Integrated Report represented facts during the pandemic, proactive steps taken to support our stakeholders and navigate the challenging period together for a resilient society. The Report adheres to the Global Reporting Initiative's ("GRI") Standards, UN SDG's and is based on the Integrated Reporting framework ("IIRC").

Your Company continued to focus on integrating Sustainability into its business practices across valued stakeholders through key initiatives.

In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, the Company's 1^st Business Responsibility and Sustainability Report for the year ended 31st March 2023, forms part of this Annual Report.

The Board of Directors have adopted a new policy viz. ‘Business Responsibility and Sustainability Reporting Policy' ("BRSR Policy"), which inter-alia, incorporates sustainability elements and aligns the Policy with National Guidelines on Responsible Business Conduct ("NGRBC").

Your Company outreached it's stewardship as a ESG leader and conducted its first ever Business Responsibility and Sustainability Reporting training for value chain partners, by emphasising on the best practices and case studies of its 9 principles based on NGRBC. The integrated and empowering approach towards the stakeholders provides a visibility of ESG practices across the value chain and enables the Company to form its sustainability strategy. This future oriented outlook of aligning the stakeholders with our ESG goals will play a considerable role in achieving the companies ESG targets.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven through employee engagement Initiatives. During the year, your Company launched a training module on Business Responsibility and Sustainability Report ("BRSR").

Initiatives like "Green Gifting", "I Am Responsible" activities launched to promote ESG culture and sustainable consumption practices in employees will enable sustainable behavioral changes & knowledge development as a core value of the Company.

Your Company was recognised for its Sustainability initiatives with the accolades as stated in Achievements section.

Your Company made proactive efforts to reduce ^CO2 emissions (carbon footprint) through Project "Mahindra Hariyali" by planting 2,94,000+ saplings throughout the country.

As a service sector, the major waste contributor is paper. Promoting a circular economy strategy for its disposal, your Company launched a zero waste to landfill project thereby ensuring to send paper waste to paper mills for recycling purpose only through authorised organisations and in exchange receiving wheat straw based copier paper for further consumption. This initiative ensures circular economy . and promotion of sustainable consumption in business. Your Company's inclusive sustainable business model is future ready and well equipped to enable its stakeholders progress.

Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Through a wide network of branches, we are promoting local employment and building strong lasting relationships with our stakeholders. Your Company has always been conscious of its role as a responsible corporate citizen and is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through its wide network of branches with locally recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the Country.

Your Company is pleased to present its holistic performance for FY2023, in the Integrated Report of the Company. This report includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, your Company started its journey in 1991 and has grown into a leading NBFC with an employee base of around 26,058 employees all over India. By working with around 50 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, your Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility (CSR) initiatives are aligned with the Company's purpose to drive positive change in the lives of our communities and aligned with national priorities.

1. CSR Committee

The Company has duly constituted a CSR

Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors:

During the year under review, 3 (three) CSR

Committee Meetings were held, details of which are provided in the Corporate Governance Report. The CSR Committee inter-alia, reviews and monitors the CSR as well as BRSR activities.

2. CSR Policy

The CSR Policy approved by the Board encompasses the approach and guidance given by the Board taking into account the recommendations of the CSR Committee, including principles for management of the CSR Project(s)/Program(s) and formulation of the Annual Action Plan. The CSR Policy of the Company was amended to align the same with regulatory provisions pertaining to CSR. The CSR Policy has been hosted on the website of the Company at: https://www.mahindrafinance com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies

3. CSR Initiatives

The Company had launched CSR flagship for Drivers Community in FY2021 (Project "Swabhimaan" or "Self- Respect"), which is aimed at upliftment of drivers and their family members In FY2023, to further solidify our commitment towards the well-being of the driver communities, your Company successfully implemented its flagship program ‘Swabhimaan'. This multiprogram's focus has been to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall well-being. In FY2023, we reached out to over 1,62,400+ beneficiaries across India. Through the Swabhimaan program, your Company provided 4 wheeler vehicle driving training to 3,100+ freshers, road safety training to 7,850+ existing drivers, auto mechanic training to 2,300+ youth, conducted financial & digital literacy sessions for 1,42,000+ drivers and awarded scholarships to 7,000+ children of drivers. Through above interventions, your company impacted lives of 12,200+ women beneficiaries.

Your Company launched innovative Financial Literacy Campaign "Money Gyaan Se Jeevan Aasaan" with the objective to create awareness about EMI Fraud Prevention, Government SME and MSME schemes and Responsible borrowing under the theme "Money Kathayein". This Public awareness campaign targeted to masses across rural and urban communities educating on basic financial behaviours. Around 85 million views were garnered through this digital campaign.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 14,000+ underprivileged girl children from socially and economically marginalised families living in urban, rural, and tribal parts of India.

With the aim of helping girls complete schooling, Project Nanhi Kali provides girls (from Class 1-10) with comprehensive support including two hours of daily after-school remedial classes at Nanhi Kali Academic Support Centres. The girls also receive an annual school supplies kit comprising a school bag, stationery and feminine hygiene material, enabling them to attend school with dignity. To help improve learning outcomes, the project provides every girl with access to personalised, adaptive learning software.

Further your Company continued Mahindra Pride Classroom program to reach out to marginalised and socially excluded women to create job opportunities in various sectors and enable women to become financially independent and participate actively in the workforce. Under this program, we conducted 40 hours training for 62,900+ final year female students in classrooms across government/government aided colleges, polytechnics, industrial training institutions, employer premises etc. to enhance their employability prospects in the emerging areas like Science, Technology, Engineering and Mathematics ("STEM"), digital marketing, coding, digital & financial literacy, new educator and regenerative agriculture which are in high demand in today's job market.

Your Company launched pilot projects on Women Economic Empowerment Skill Development with an aim to enable women to join the workforce and make them economically empowered. Your Company trained 2,500+ women as Sewing Machine Operator, General Duty Assistant, Data Entry Operators, Call centre/PO related skills training.

To continue with its commitment to increase the green cover, as a part of the Mahindra Hariyali project, your Company, planted more than 2,94,000+ saplings across India. As a part of the Environmental Sustainability, your Company constructed 10 rainwater harvesting structures (bore well recharge) in the schools to provide water and created 5 farm ponds to provide water to the farmers throughout the year. Through this intervention, 3.50 lakhs Litres of water potential is expected to get created. This project is expected to support 2,450 beneficiaries from the rural areas of Maharashtra.

Your Company being responsive to its approach towards natural calamities, supported reconstruction and renovation of 6 flood affected government schools from Maharashtra and Bihar through which 1,000+ students will be benefited.

Your Company also distributed Dry Ration and Personal Hygiene Kits to 1,200+ flood affected families in Assam as humanitarian aid.

In the area of healthcare, your Company organised nationwide blood donation drives in which 6,240 Blood Units were collected, health check-up camps were conducted. Your Company undertook Swachh Bharat initiatives and donated 12 ambulances that have enabled access to primary healthcare centers, easy for several tribal and rural patients across the nation.

Your Company continued its support to Persons with Disabilities by training 250+ beneficiaries under ‘Hunnar' program in various skills in Banking and Financial Services and Insurance ("BFSI"), hospitality and Information Technology Enabled Services ("ITES") sectors to enhance their employability.

Your Company has always encouraged the employees to participate in various CSR Projects to drive positive changes amongst the community. During the reporting period, around 18,200 employees (79% of total employees) contributed 97,400 volunteering hours in various virtual and CSR

Calendar initiatives undertaken by the Company like blood donation, tree plantation, Swachh Bharat, visit to municipal school, visit to Orphanages, Old age Homes & centres for Differently Abled to re affirm its pledge to the society.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture, welfare of the armed forces and supporting underprivileged community.

4. CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), the mandatory CSR spend of the Company for FY2023 was

37.13 crores, against which the Company has spent 37.22 crores during FY2023. Your Company is in compliance with the statutory requirements in this regard.

Further, in terms of the CSR Rules, Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2023.

5. Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure II" of this Report.

6. Impact Assessment of CSR Projects

The Company has been conducting internal impact assessments to monitor and evaluate its strategic CSR programs. In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, impact assessment was required to be carried out for the following projects

1. COVID 19 Relief Project

2. Swabhimaan

3. Mahindra Pride School

4. Nanhi Kali

5. Women Economic Empowerment

The Company has engaged independent agencies to carry out the impact assessment for the aforesaid projects. Of the abovementioned projects, impact assessment has been completed for COVID-19 relief project and Swabhimaan. The Executive Summary for Impact Assessment Reports of COVID-19 relief project and Swabhimaan, is annexed with ‘Annexure II' of this Report and the complete Impact Assessment Reports of the applicable projects can be accessed at the web-link: https://www.mahindrafinance. com/rise-for-good/csr-reports

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investors/ disclosures-reg-46-62/financial-information/

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage. The Board Diversity Policy, as a part of Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management w.e.f. 25th November 2022 sets out the Board's approach to diversity.

As on 31st March 2023, the Board of your Company consisted of 10 Directors comprising of a Non-Executive Chairman, 1 Executive Director,

2 Non-Executive Non-Independent Directors and 6 Independent Directors, of whom 2 are Women Directors.

Your Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The details of the Board Committees along with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

As on 31st March 2023, the Audit Committee comprised of 5 Independent Directors and 1 Non-Executive Non-Independent Director:

• Dr. Anish Shah ceased to be a Member of the Committee w.e.f. 2nd May 2022.

• Mr. Amit Kumar Sinha was appointed as the Member of the Committee w.e.f. 2nd May 2022.

• Mr. Diwakar Gupta was appointed as the Member of the Committee w.e.f. 3rd February 2023.

During the year under review, 6 Audit Committee Meetings were held. Further, the terms of reference of the Audit Committee were enhanced during the year under review, to align it with statutory amendments notified under SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2022. All the recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The Board of Directors met 7 times during the year under review i.e. on 2nd May 2022, 28 th July 2022, 26th September 2022, 4 th October 2022, 2 nd November 2022, 3rd February 2023 and 16 th March 2023, as against the statutory requirement of at least four meetings. The requisite quorum was present for all the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 32 nd AGM of the Company was held on 28th July 2022 through Video Conference.

During the year under review, no Extraordinary General Meeting ("EGM") of the Members was held. During the year under review, basis recommendation of the Nomination and Remuneration Committee and the Board of Directors, members by way of special resolution passed through postal ballot on 30th December 2022, appointed Mr. Diwakar Gupta as an Independent Director to hold office for 1st term of 5 consecutive years commencing from 1st January 2023 to 31 st December 2027 (both days inclusive).

Detailed information on the Meetings of the Board, its Committees, Postal Ballot and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

A calendar of all the meetings is prepared and circulated in advance to the Directors.

The Independent Directors met twice during the year under review, on 8th September 2022 and 16th March 2023. The Meetings were conducted in an informal manner without presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, Chief Financial Officer or any other Management Personnel to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Pursuant to succession planning approved by Nomination and Remuneration Committee("NRC") and as recommended by NRC, Mr. Raul Rebello has been appointed by the Board of Directors, subject to the approval of the shareholders, as the Whole-time Director and KMP designated as ‘Executive Director and MD & CEO-designate' w.e.f. 1 ^st May 2023 to 29th April 2024 (both days inclusive) and as the Managing Director of the Company designated as ‘Managing Director & CEO' w.e.f. 30th April 2024 to 30 th April 2028 (both days inclusive).

Mr. Raul Rebello will assume the office of Managing Director effective 30 th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company on 29^th April 2024.

The approval of the shareholders for appointment of Mr. Raul Rebello as mentioned above would be obtained at the ensuing 33rd AGM of the Company. Necessary resolutions(s) seeking approval of the members are incorporated in the Notice of the 33rd Annual General Meeting of the Company.

Pursuant to the recommendation of NRC and the Board of Directors of the Company, the members of the Company have by means of a Special Resolution passed on 30th December 2022 vide Postal Ballot approved the appointment of Mr. Diwakar Gupta (DIN: 01274552) as an Independent Director w.e.f. 1st January 2023 for a period of five consecutive years, not liable retire by rotation. In the opinion of the Board, Mr. Diwakar Gupta holds high standards of integrity, expertise and experience.

He is exempted from the requirement to undertake the online proficiency self-assessment test.

Pursuant to the recommendation of NRC and the Board of Directors of the Company, the members of the Company have by means of an Ordinary Resolution passed on 15^th March 2022 vide Postal Ballot, approved the appointment of Mr. Siddhartha Mohanty (DIN: 08058830) as a Non-Executive Non-Independent Director of the Company w.e.f. 1st April 2022, liable to retire by rotation.

Mr. Amit Raje (DIN: 06809197) Whole-time Director, designated as Chief Operating Officer Digital Finance - Digital Business Unit was liable to retire at the 32 ^nd AGM of the Company held on 28th July 2022 and was eligible for re-appointment. However, Mr. Raje did not seek re-appointment due to pre-occupation and consequently ceased to be Whole-time Director and Key Managerial Personnel of the Company w.e.f. 28^th July 2022.

During the year under review, no Independent Director of the Company resigned before the expiry of his/ her tenure.

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Amit Kumar Sinha Non-Executive and Non Independent Director, is liable to retire at the 33^rd AGM of the Company scheduled to be held on 28^th the July 2023 and is eligible for re-appointment.

However, he does not seek re-appointment as a Director due to his transition to a new role in Mahindra Group i.e. he has been appointed as the Managing Director and CEO of Mahindra Lifespace Developers Limited w.e.f. 23rd May 2023 and accordingly he would cease to hold office as a Director of the Company at the close of the ensuing AGM, scheduled to be held on 28th July 2023. The Board has taken note of the same and resolved not to fill the vacancy so caused.

The st 1 term of Mr. Milind Sarwate, Independent Director of the Company expires on 31st March 2024. Basis the performance evaluation report, business knowledge, skills sets, experience and substantial contribution made by Mr. Sarwate during his 1st term and basis recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company have subject to the approval of the members of the Company, approved the reappointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director on the Board of the Company, for a second term of 5 consecutive years w.e.f. 1st April 2024. The necessary resolution seeking approval of the members of the Company has been incorporated in the Notice of 33^rd Annual General Meeting of the Company.

All the Directors of the Company have confirmed that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD. 008/ 03.10.119/2016-17 dated 1st September 2016, as amended, and that they are not disqualified from being appointed/continuing as Director in terms of Section 164(1) and (2) of the Companies Act, 2013.

All the Independent Directors of the Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 ("the Act") and Regulation 16(1)(b) of the Listing Regulations and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors holds highest standards of integrity and possess the relevant proficiency, expertise and experience qualify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (‘IICA') and the said registration is renewed and active.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent has cleared the online proficiency self- assessment test January 2023.

The following persons were designated as the Key Managerial Personnel ("KMP") of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as on 31st March 2023:

1. Mr. Ramesh Iyer, Vice-Chairman & Managing Director

2. Mr. Vivek Karve, Chief Financial Officer of Company and Group Financial Services Sector

3. Ms. Brijbala Batwal, Company Secretary

Mr. Amit Raje, ceased to be the Whole-time Director and KMP of the Company w.e.f. 28th July 2022.

Pursuant to the provisions of Section 134

(5) of the Companies Act, 2013, ("the Act") your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i. In the preparation of the annual accounts for financial year ended 31 st March 2023, the applicable accounting standards have been followed and there are no material departures in adoption of these standards. i

ii. They have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March 2023 and of the profit of the Company for the year ended on that date. ii

iii They have taken proper and sufficient care 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.

iv. They have prepared the annual accounts for financial year ended 31 st March 2023 on a going concern basis.

v. They have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31st March 2023. v

vi. They have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March 2023.

The Companies Act, 2013 ("the Act") and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a process for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

An annual performance evaluation exercise was carried in compliance with the applicable provisions of the Act, Listing Regulations, the Company's Code of Independent Directors and the criteria and methodology of performance evaluation approved by the NRC as under:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

All the Directors of the Company as on 31st March 2023 had participated in the evaluation process. The Directors have expressed satisfaction with the criteria for evaluation of performance of Board, its Committees and individual Directors, assessed via online portal through series of questions. The results of evaluation were encouraging showing high level of engagement of Board and its Committees performing its role with effective oversight and providing guidance to Management. The results of the evaluation were shared with the Board, Chairman of respective committees and individual Directors.

Based on the results of the evaluation, the Board has agreed on an action plan to further improve the effectiveness and functioning of the Board. The suggestions from previous evaluations were implemented by the Company during FY2023.

The Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company its operations, business, industry, environment in which it functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company.

The Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement. The terms of reference of all the Committees with updations, if any, is shared with all the Board Members on quarterly basis. Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. During the year under review, the Company migrated to a new secure Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Reports, Code of Conduct for Directors, terms of appointment, committee charters and other policies for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the Company has during the year conducted familiarisation programmes through briefings at Board/ Committee meetings for all Directors including Independent Directors. Details of familiarisation programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the weblink: https:// www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#familiarisation-programme and is also provided in the Corporate Governance Report forming part of this Annual Report.

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act") read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company. Basis the recommendation of the Nomination and Remuneration Committee, the Board of Directors had approved the revised policy, effective 25 th November 2022 for strengthening the disclosures on Corporate Governance, including policies on Board membership criteria, Board Diversity Policy, Policy on criteria for determining independence of Directors, updating statutory amendments and updation with regards to Succession Planning.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies ii) Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of Sub-section (4) of Section 178 of the Act, Scale Based Regulations notified by the Reserve Bank of India ("RBI") and Listing Regulations. During the year, the said Policy was revamped to align with RBI Guidelines dated 29th April 2022 including introducing clawback/malus clause in the Policy. The said Policy is uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records.

The systems, Standard Operating Procedures and controls are reviewed by the Management. Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO"), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR") issued by The Institute of Chartered Accountants of India. risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis.

The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design operation of internal financial controls was observed. Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

The Joint Statutory Auditors of the Company viz M/s. Deloitte Haskins & Sells, Chartered Accountants and M/s. Mukund M. Chitale & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls financial reporting as at 31 st March 2023.

The Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls.

Separate meetings between the Chief Internal Auditor and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 2nd May 2022, 20 th September 2022, 2^nd November 2022 and 16th March 2023.

In compliance with RBI circular dated 3rd February 2021, the Audit Committee has approved a Risk Based Internal Audit ("RBIA") framework, along with or appropriate processes and plans for internal audit for

FY2023 and FY2024. The Risk Based Internal Audit Plan is also being reviewed by the Statutory Auditors and Chief Risk Officer before being approved by the Audit Committee.

The audit plan is aimed at evaluation of the efficacy and adequacy of internal control systems and compliance thereof, robustness of internal processes, policies and accounting procedures and compliance with laws and regulations. Based on the reports of internal audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are tracked and presented to the Audit Committee, together with the status of the management actions and the progress of the implementation of the recommendations on a regular basis.

. Risk Management

Risk management forms an integral part of the Company's business. Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter-alia, includes identification of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk management process has been established across the Company and is designed to identify, assess and frame a response to threats that affect the achievement of its objectives. Further, it is embedded across all the major functions and revolves around the goals and objectives of the Company. Your Company has a robust organisational structure for managing and reporting on risks. This risk management mechanism works at all the levels, which acts as the strategic defence cover of the Company's risk management and is supported by regular review, control, self-assessments and monitoring of key risk indicators. The Risk Management Committee ("RMC") constituted by the Board manages the integrated risk and reviews periodically the Risk Management Policy and strategy followed by the Company.

In compliance with Scale Based Regulations, the Board of Directors have basis recommendation of RMC adopted ICAAP Policy and Framework with the objective of ensuring availability of adequate capital to support all risks in business as also enable effective risk management system in the Company.

The Chief Risk Officer ("CRO") oversees strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset Liability Committee and Risk Management Committee Meetings. The CRO along with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaluating risks, major risks as well as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps being taken to mitigate these risks.

In terms of the provisions of Section 139 of the Companies Act, 2013 and RBI guidelines for appointment of statutory auditors of NBFCs and basis the recommendation of the Audit Committee and the Board of Directors of the Company, the members have at 32nd AGM held on 28 th July 2022 approved the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants (ICAI Firm Registration No. 117365W) ["DHS"] and M/s. Mukund M. Chitale & Co., Chartered Accountants (ICAI Firm Registration No. 106655W) ["MCC"], as the Joint Statutory Auditors of the Company to hold office for a period of 2 consecutive years from the conclusion of the Thirty-second Annual General Meeting till the conclusion of the Thirty-fourth Annual General Meeting of the Company to be held in the year 2024. The Joint Statutory Auditors holds a valid peer review certificate as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations").

The joint Statutory Auditors have given a confirmation to the effect that they have not been disqualified in any manner from continuing as the Statutory Auditors. Joint Statutory Auditors of the Company were present at the last Annual General Meeting ("AGM") held on and 28th July 2022.

In compliance with the Reserve Bank of India Guidelines dated 27^th April 2021, the Company has in place a Policy for appointment of Statutory Auditors of the Company.

M/s. Makarand M. Joshi & Co., Practicing Company Secretaries were appointed as the Secretarial Auditor of the Company for conducting the Secretarial Audit of the Company for FY2023 and FY2024 in accordance with the provisions of Section 204 of the Act read with the Rules framed thereunder.

In accordance with the provisions of Sub-section (1) of Section 204 of the Companies Act, 2013, the Secretarial Audit Report for FY2023 issued by M/s. Makarand M. Joshi & Co., is appended to this Report as "Annexure III".

The former Secretarial Auditor viz. M/s KSR & Co., Company Secretaries LLP and the current secretarial auditor M/s. Makarand M. Joshi & Co., were present at the last AGM of the Company held on 28th July 2022.

The Secretarial Audit of Mahindra Rural Housing Finance Limited ("MRHFL"), a material, debt listed subsidiary of the Company, for FY2023 was carried out pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report of MRHFL submitted by M/s. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer.

In compliance with Regulation 24A of SEBI Listing Regulations, your Company has undertaken an audit for FY2023 for all the applicable compliances as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Circulars/ Guidelines issued thereunder.

The Annual Secretarial Compliance Report ("ASCR") issued by M/s. Makarand M. Joshi & Co., Company

Secretaries, Secretarial Auditor for FY2023 with additional confirmations on compliances by the Company with respect to Insider Trading Regulations, Related party Transactions, updation of Policies, disclosure of material events to Stock Exchanges etc. as per revised ASCR format prescribed by BSE and NSE, has been filed with the Stock Exchanges.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not applicable in respect of the business activities carried out by the Company and hence such accounts and records were not required to be maintained by the Company.

During the year under review, the Joint Statutory

Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which need to be mentioned in this Report.

All contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm's length basis. Prior/omnibus approval is obtained for Related Party Transactions which are of repetitive nature and/or entered in the Ordinary Course of Business and are at Arm's Length. All Related Party Transactions and subsequent material modifications are placed before the Audit Committee for review and approval.

All Related Party Transactions entered during the year were in the ordinary course of business and on arm's length basis. During the year under review your Company had not entered into any material related party transactions i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements or exceeding 1,000 crores.

There were no contracts or arrangements transactions entered into during the year ended 31st March 2023 which were not at arm's length basis. Further, there were no material contracts or arrangements or transactions for the year ended 31st March 2023. The disclosure as required under Section 134(3)(h) of the Companies Act 2013, in form AOC-2, is not applicable to the Company and hence, the prescribed Form AOC 2 does not form a part of this report.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the ‘Policy on Materiality of and Dealing with Related Party Transactions', is available on the Company's website: https://www.mahindrafinance. com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies.

The transactions of the Company with the company belonging to the promoter/promoter group which holds more than 10% shareholding in the Company as required pursuant to para A of schedule V of the Listing Regulations is disclosed separately in the financial statements of the Company. Further, details on the transactions with related parties are provided in the accompanying financial statements.

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees, and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Whistle Blower Policy, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct or Corporate Governance Policies or any improper activity, through the channels provided below.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. The Whistle-blower can make a Protected Disclosure by using any of the following channels for reporting:

1. Independent third party Ethics Helpline

2. Toll free No: 000 800 100 4175

3. Chairperson of the Audit Committee

The Whistle Blower Policy has been widely disseminated within the Company. The Policy is available on the website of the Company at the web link: https:// www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies The Audit Committee is apprised of the vigil mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A quarterly report on the whistle blower complaints is placed before the Audit Committee for its review.

Details of employees who were in receipt of remuneration of not less than 1,02,00,000 during the year ended 31st March 2023 or not less than 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual General Meeting in electronic mode to any Shareholder upon request sent at the Email ID: investorhelpline_mmfsl@mahindra.com. Such details are also available on Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investors/disclosures-reg-46-62/financial-information Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in ‘Annexure IV."

During FY2023, Mr. Ramesh Iyer, Vice Chairman & Managing Director has received an amount of 89.23 lakhs towards settlement of fourth vesting of Employees' Phantom Stock Options granted by Mahindra Insurance Brokers Limited, subsidiary of the Company.

Mr. Amit Raje, was appointed as Whole time Director ("WTD") of the Company w.e.f. 1 ^st April 2021 and ceased to hold the said position w.e.f. 28th July 2022. Mr. Raje was earlier associated with the Holding Company viz. Mahindra & Mahindra ("M&M") as Executive Vice President Partnerships & Alliances, wherein he was granted

97,783 ESOPs of M&M at an exercise price of 5/- per share. While he was paid remuneration from the Company during his stint with the Company as WTD, out of 43,458 ESOPs of M&M vested and exercisable by him, he exercised 34,028 ESOPs during FY2023.

Except as mentioned herein, Mr. Ramesh Iyer and Mr. Amit Raje did not receive any other remuneration or commission from Holding/Subsidiaries of the Company during FY2023.

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

Your Company has in place a comprehensive Policy in accordance with the provisions of POSH Act and Rules made thereunder.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com//investors/disclosures-reg-46-62/corporate-governance#MMFSL-policies. Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC") under the POSH Act to redress complaints received regarding sexual harassment. To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona (Internal Training App) covering topics including POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s). The following is a summary of Sexual Harassment complaint(s) received and disposed off during the FY2023, pursuant to the POSH Act and Rules framed thereunder: a) Number of complaint(s) of Sexual Harassment received during the year 1 b) Number of complaint(s) disposed off during the year 1 c) Number of cases pending as at 31^st March 2023 0 d) Number of workshops/awareness programme on the subject carried out during the year under review were as under:

Awareness program was conducted in which mailers & video on the Prevention of Sexual Harassment at the workplace along with POSH policies was circulated to all employees. POSH training was provided to all new joinees as a part of induction module.

An online e-learning module for employees on Prevention of Sexual Harassment covering topics on Sexual Harassment, process of filing complaints, dealing with sexual harassment, etc. is developed for training all the employees. 83% of the employees have completed this training.

ICC training conducted for all ICC members. 1 session

POSH sensitisation training conducted for HR team. 5 sessions

The information in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is attached as ‘Annexure V' to the Board's Report.

The details of the Key Policies adopted by the Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

The Directors have devised proper systems to ensure compliance with the provisions of the Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively, issued by the Institute of Company Secretaries of India ("ICSI") and such systems are adequate and operating effectively.

Although, SS-1 compliance is required only for Board and its Committees mandatorily required to be constituted under the Companies Act, 2013 ("the Act"), the Company adheres and complies with the good practices enunciated in the said Secretarial Standards for all its mandatory and non-mandatory Committees.

Your Company has duly complied with applicable SS-1 and SS-2, during the year under review.

There were no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status of the Company and its future operations.

During the year under review and till the date of this report, Reserve Bank of India ("RBI") has passed the following orders against the Company:

1. Vide its press release dated 22nd September 2022, the RBI had directed the Company to cease carrying out any recovery or repossession activity through outsourcing arrangements. The said prohibition was lifted by RBI effective 4th January 2023 based on the submissions made by the Company and its commitment to strengthen its recovery practices and outsourcing arrangements, tighten the process of onboarding third party agents and strengthen accountability framework as per its Board approved action plan.

2. Vide its order dated 5th April 2023, the RBI imposed a monetary penalty of 6.77 crores on the Company for deficiencies in regulatory compliance with the RBI directions on fair practices relating to disclosure of annualised rate of interest charged on loans to certain borrowers at the time of sanction and failure to give notice of change in terms and conditions of loan to these borrowers. Your Company has already implemented remedial actions to modify its processes and documentation to ensure disclosures, as per regulatory requirements.

The above-mentioned orders do not impact either the going concern status or the Company's operations in future.

Your Company will continue to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

The Members may also refer note no. 53(VII)(b) of the standalone financial statements.

Your Company has not made any application under the Insolvency and Bankruptcy Code, 2016 ("IBC") during the year under review. The details of the pending proceedings under IBC is mentioned hereunder: Your Company had filed 2 petitions with National Company Law Tribunal ("NCLT") under IBC in FY2021, for recovery of outstanding loans from its customers, being Corporate Debtors. The proceedings with respect to said petitions were completed and order has been passed by the respective jurisdictional NCLTs for initiating Corporate Insolvency Resolution Process against the said companies.

During the year, the Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions and hence 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 is not applicable.

The Directors further state that no disclosure reporting is required in respect of the following items, as there were no transactions/events related to these items during the financial year under review:

There was no issue of equity shares with differential rights as to dividend, voting or otherwise;

There was no issue of shares (including sweat equity shares) to the employees of the Company under any scheme;

There was no raising of funds/Issue of shares through Preferential Allotment, Public Issue, Rights Issue or Qualified Institutional Placement;

There was no buy back of the equity shares during the year under review;

There were no voting rights which are not directly exercised by the employees in respect of equity shares for the subscription/purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the ACT");

There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

There was no revision made in Financial Statements or the Board's Report of the Company;

The Company being an NBFC, the provisions relating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable. Disclosures as per NBFC regulations have been made in this Annual Report.

The Board conveys its deep gratitude and appreciation to all the employees of the Company for their tremendous efforts as well as their exemplary dedication and contribution to the Company's performance.

The Directors would also like to thank its Shareholders, Customers, Vendors, Business Partners, Bankers, Government and all other Business Associates for their continued support to the Company and the Management.

For and on behalf of the Board