Dear Members,

Your Directors have pleasure in presenting the 32nd Annual Report of the Company together with the Audited Standalone Financial Statements for the financial year ended March 31, 2026.

1. Financial Performance & Highlights

A snapshot of the key financial highlights of your Company showcasing the Company's performance across key business and operational parameters and financial performance is detailed below. The consistent growth in income and operational resilience highlight the Company's strengthened fundamentals and continued progress.

1.1. Financial Results

The summarized financial results of the Company for FY 2025-26 are given below:

(Rs in lakhs, except earnings per share)

1.2. Business Growth

Your Company has demonstrated substantial performance enhancement through strategic investments in technology, expansion into new markets and diversification of its product portfolio. Throughout this growth phase, the Company has remained steadfast in its commitment to delivering exceptional customer service. During the Financial Year 2025-26, the Company witnessed growth in the self-sourced portfolio in the form of Two-wheeler, Used Car and Used CV, substantially reduced business through Co-lending arrangements. This self-sourced initiative culminated in a successful conclusion to the fiscal year March 31, 2026, marked by an impressive additional disbursement of Rs 250 lakhs.

1.3. Profitability

During the Financial Year 2025-26, your Company achieved a net profit of Rs 1,117 lakhs, as compared to Rs 4,575 lakhs for the previous Financial Year. Profit before tax was at Rs 1,562 lakhs for the year ended March 31, 2026, as compared to Rs 6,040 lakhs for the year ended March 31, 2025. Total Income has increased from Rs 47,650 lakhs for the year ended March 31, 2025, to Rs 63,252 lakhs for the year ended March 31, 2026. The Net Interest Margin (NIM) is reported at 50% for the Financial Year 2025-26 as against 53% in Financial Year 2024-25.

1.4. Asset Quality

The Provision Coverage Ratio (PCR) on Stage 3 Assets stood at 50%, while the PCR on the overall loan portfolio was 3.55% as at the end of the reporting period. The newly originated portfolio demonstrated a lower probability of default, reflecting improved underwriting quality and portfolio performance. During the year, the Company observed certain stress in the seasoned portfolio and accordingly implemented appropriate corrective measures, including amendments to relevant credit policies. The effectiveness of these measures was reflected in the improved portfolio performance witnessed from the second quarter onwards, contributing to better asset quality trends and enhanced collection efficiencies.

As a prudent measure, the Company continued to maintain provisions in excess of the regulatory requirements. As at March 31, 2026, the Company maintained total provisions of '11,901 lakhs, including management overlay provisions, against the IRAC requirement of Rs 6,761 lakhs, resulting in an excess provision buffer of Rs 5,140 lakhs. This additional provisioning underscores the Company's conservative approach to risk management and its commitment to maintaining a resilient balance sheet.

1.5. Net Worth & Capital Adequacy Ratio

The Net Worth of your Company stood at Rs 67,042 lakhs as against Rs 65,806 lakhs in the previous year. It increased on account of profit earned during the year amounting to Rs 1,236 lakhs. Your Company's total Capital Adequacy Ratio (CRAR) as on March 31, 2026, stood at 22.02% of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the Balance Sheet items, which is significantly above the statutory minimum of 15%. Out of the above, Tier I CRAR stood at 21.87% and Tier II CRAR stood at 0.15%. The CRAR as on March 31, 2025, was at 22.25%.

1.6. Earnings Per Share (EPS)

Earnings Per Share of your Company during the year under review is reported at Rs 6.79 against earning of Rs 27.81 as on March 31, 2025. Return on Equity was at 1.86% for the Financial Year 2025-26.

2. Dividend

Considering the Company's growth aspirations, capital requirements and long-term value creation objectives, the Board of Directors believes it is prudent to retain the profits earned during the financial year to strengthen the Company's capital base and support future business growth. Accordingly, the Board does not recommend any dividend for the financial year 2025-26.

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company's Dividend Distribution Policy is available on the Company's website at: https://admin.muthootcap.com/upioads/Policy_on_Distribution_of_Dividends_f678ab3da6.pdf.

Shareholders are requested to note that unclaimed dividend amounts remaining unpaid or unclaimed for a period of seven consecutive years, together with the corresponding shares on which such dividends remain unclaimed, are required to be transferred to the Investor Education and Protection Fund ("IEPF") in accordance with the provisions of the Companies Act, 2013 and the rules made thereunder. Shareholders may claim such amounts and shares transferred to the IEPF by following the prescribed procedure under the applicable IEPF Rules. The details pertaining to unclaimed dividends are available on the Company's website at www.muthootcap.com.

2.1 Transfer to Investor Education & Protection Fund (IEPF)

During the financial year 2025-26, no amount or shares were due for transfer to the Investor Education and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, shareholders whose dividend amounts or shares have been transferred to the IEPF may claim the same by submitting an online application in Form IEPF-5 and complying with the prescribed requirements.

3 Reserves

Your Company has transferred an amount of Rs 250 lakhs to the Statutory Reserve maintained under Section 45-IC of the Reserve Bank of India Act, 1934. The Company has not transferred any amount to the General Reserve for the Financial Year ended March 31, 2026. Post transfer of profits to reserves, your Board has decided to retain Rs 985.72 Lakhs as surplus in the profit & loss account.

4 Resource Mobilisation

4.1 Share Capital

a. Authorised Share Capital

During the financial year under review, there was no change in the Authorised Share Capital of the Company. As on March 31, 2026, the Authorised Share Capital of the Company stood at Rs 2,500 lakhs consisting of 2,50,00,000 Equity Shares of face value of Rs 10/- each.

b. Issued, Subscribed & Paid-Up Share Capital

During the financial year under review, there was no change in the paid-up Equity Share Capital of the Company. As on March 31, 2026, the Issued, Subscribed and Paid-up Share Capital of the Company stood at Rs 1,645 lakhs consisting of 1,64,47,533 Equity Shares of face value of '10/- each.

The Company did not issue any equity shares either with or without differential rights during the FY 2025-26 and hence, the disclosure requirements under Section 43 and Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 are not applicable during the year under review.

During the period under review, no stock options have been issued by the Company and hence disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 were not applicable during the year under review.

The Company also did not undertake any buy-back of its Equity Shares during the year under review.

4.2 Debentures

During the year under review, the Company issued Non-Convertible Debentures (NCDs) amounting to Rs 60,000 lakhs (including Green Bonds aggregating Rs 15,000 lakhs, guaranteed by GuarantCo) and redeemed NCDs aggregating to an amount of Rs 363 46.70 lakhs (amount is inclusive of interest and includes the repayment of Market Linked Debentures). The NCDs are listed on the Debt Market Segment of BSE Limited and National Stock Exchange of India Limited.

As specified in the respective offer documents, the funds raised from NCDs are being utilized for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Further, the details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

Your Company has made timely payment of principal and interest obligations of all the NCDs issued by the Company as and when due. All NCDs were issued on a private placement basis and are secured by way of pari passu charge on the current assets of the Company.

The NCDs of your Company are rated as "A+ / Positive" by CRISIL and "A+ / Stable" by ICRA for the respective issuances. Trustees for Debenture Holders for ensuring and protecting the interests of debenture holders:

a) Mr. A. Gopalakrishnan (For unlisted debentures)

M/s. K. Venkatachalam Aiyer & Co.

Chartered Accountants,

Building No. 41/3647 B, Providence Road North End, Kochi - 682 018

b) Vardhman Trusteeship Private Limited (For listed debentures)

The Capital, A Wing, 412A,

Bandra Kurla Complex, Bandra (East) Mumbai 400 051

Telephone: + 022- 4264 8335

E-Mail: compliance@vardhmantrustee.com

c) Catalyst Trusteeship Limited (For listed debentures)

901,9th Floor, Tower-B, Peninsula Business Park, Senapati Bapat Marg,

Lower Parel (W), Mumbai - 400013, Maharashtra, India

Telephone: +91 22 - 49220555

Email: ComplianceCTL-Mumbai@ctltrustee.com

4.3 Fixed Deposits

Your Company is a Non - Banking Financial Company (NBFC), registered with Reserve Bank of India (RBI), having a Deposit-taking License. The Company started accepting fixed deposits during FY 2013-14. The fixed deposits of your Company are rated as "A+/Positive" by CRISIL as on March 31, 2026.

The outstanding number of fixed deposits as on March 31, 2026, received by the Company including interest accrued at that date is Rs 83 11 lakhs.

As on March 31, 2026, there are 61 accounts of fixed deposits amounting to Rs 89 lakhs which have become due for payment but have not been claimed by the depositors.

Being an NBFC registered with RBI, the provisions of Chapter V of the Companies Act, 2013, relating to acceptance of deposits by Companies, is not applicable to the Company.

a. Communication to Deposit Holders: The Company has the practice of sending communication by registered post to the deposit holders whose accounts are about to mature, fourteen days prior to the date of maturity.

If the deposit holders do not respond to the communication, the Company makes reasonable efforts through available communication channels, instructing them to surrender the fixed deposit certificate and claim the amount. In case, the depositors are not traceable due to change in address / phone numbers, another regular communication is sent to the deposit holder and other modes to contact the deposit holders are also initiated till the deposits are repaid.

b. Trustees for Deposit Holders: Your Company has appointed IDBI Trusteeship Services Limited, as trustees for protecting the interests of deposit holders. In compliance with the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025, your Company has created a floating charge on the statutory liquid assets of the Company, in favour of IDBI Trusteeship Services Limited who acts as trustee on behalf of the depositors, as required under the extant provisions.

4.4 Subordinated Debts

During the year under review, your Company has raised Rs 25 00 lakhs through issue of subordinated debts. As of March 31, 2026, the total amount of outstanding subordinated debts, including accrued interest was Rs 25 91 lakhs as against Rs 2 14 lakhs in the previous year. The subordinated debts and public deposits contribute to 3.29 % of our total funding.

4.5 Commercial Paper

During the year under review, your Company has raised funds for its working capital requirements by issue of Commercial Papers. The Commercial Papers of your Company are rated as A1+ by CRISIL. The outstanding amount of Commercial Papers as on March 31, 2026 was Rs 173 80 lakhs.

4.6 Bank Finance

Your Company raises funds for its working capital requirements mainly from banks and financial institutions. As on March 31, 2026, the total outstanding amount of credit facilities from Banks and Financial Institutions were Rs 1161 10 lakhs as against Rs 1220 41 lakhs as on March 31, 2025, excluding accrued interest.

Apart from the above, the Company has been sourcing funds through Securitization. During the year under review, your Company has sourced Rs 684 87 lakhs (net of OC) (previous year Rs 370 86 lakhs). The same has been invested into by various kinds of entities and the value remaining outstanding as on March 31, 2026, was Rs 660 18 lakhs (previous year Rs 389 52 lakhs).

5 Directors & Key Managerial Personnel

5.1 Directors

As on March 31, 2026, the Board of your Company consisted of seven (7) Directors, as detailed below:

*Mr. Thomas Mathew resigned w.e.f. closure of business hours of July 07, 2026. Ms. Manimekhalai A was appointed as an Independent Director of the Company w.e.f. July 16, 2026.

The composition of the Board is in line with the requirements of the Act and the Listing Regulations. AH the Directors possess an appropriate mix of skills, experience and expertise and the Company has benefited immensely by their presence on the Board. The key Board qualifications, expertise, attributes are given in detail in the Report on Corporate Governance which forms part of this Report.

5.2 Key Managerial Personnel

Mrs. Tina Suzanne George, Whole-Time Director; Mr. Mathews Markose, Chief Executive Officer; Mr. Ramandeep Singh, Chief Financial Officer and Ms. Deepa G, Company Secretary and Compliance Officer are the Key Managerial Personnel of your Company, as on March 31, 2026.

5.3 Changes in Directors & KMP during the Financial Year 2025-26

a. Appointments

All appointments of Directors and Key Managerial Personnel ("KMP") is carried out in accordance with the applicable provisions of the Companies Act, 2013 ("the Act"), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Directions issued by the Reserve Bank of India and other applicable laws and regulations.

The Nomination and Remuneration Committee ("NRC") undertakes appropriate due diligence, including assessment of the 'fit and proper' criteria, before recommending the appointment of any individual to the Board. Based on the recommendations of the NRC, the Board considers and approves such appointments, subject to the approvals required under applicable laws.

During the financial year under review, there were no appointments of Directors or Key Managerial Personnel.

The shareholders, by way of a Special Resolution passed at the 31st Annual General Meeting held on September 19, 2025, approved the continuation of the directorship of Mr. Thomas Mathew (DIN: 01277149) as an Independent Director beyond the age of 75 years, in accordance with the applicable provisions of the Listing Regulations.

b. Cessation

There were no cessations of Directors or Key Managerial Personnel during the financial year ended March 31, 2026.

c. Director Retiring by Rotation

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, read with the rules made thereunder and the Articles of Association of the Company, Ms. Susan John (DIN: 10763021), Director, retires by rotation at the ensuing Annual General Meeting ("AGM") and, being eligible, has offered herself for reappointment. The requisite details of Ms. Susan John, as required under the Act and the Listing Regulations, are set out in the Notice convening the 32nd Annual General Meeting.

5.4 Declaration by Independent Directors & Statement on compliance with the Code of Conduct.

Pursuant to the provisions of Section 149 of the Act and Regulation 25(8) of the Listing Regulations, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. Further, the Independent Directors have confirmed that they are not debarred from holding office of Director by SEBI or any other authority.

The Board is satisfied that all the Independent Directors possess the requisite integrity, expertise, experience and proficiency as envisaged under the Act and the Listing Regulations. The Independent Directors have also confirmed that their names are included in the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

The Independent Directors have complied with the Code for Independent Directors prescribed under Schedule IV to the Companies Act, 2013 and the Company's Code of Conduct for Directors and Senior Management Personnel.

The declaration received from the Independent Directors has been affirmed by the Board, and the same forms part of this Report as Annexure I.

5.5 Non-Disqualification of Directors

A certificate issued by Mr. S. Sandeep, Managing Partner, M/s. S. Sandeep & Associates, Practicing Company Secretaries (COP No. 5987), confirming that none of the Directors of the Company as on March 31, 2026, has been debarred or disqualified from being appointed or continuing as a Director by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any other statutory authority, forms part of the Corporate Governance Report as Annexure II. All Directors have also confirmed that they satisfy the 'fit and proper' criteria prescribed under the Reserve Bank of India (Non-Banking Financial Companies - Governance) Directions, 2025.

5.6 Policy on Board Diversity

The Company recognises that an appropriately diverse Board enhances the quality of decision-making and strengthens corporate governance. The Policy on Board Diversity, approved by the Board, provides that diversity shall be considered across various parameters, including skills, industry and functional experience, professional background, regional representation, knowledge, age and gender, while ensuring that appointments continue to be merit-based.

The Policy further provides that the Nomination and Remuneration Committee shall lead the process of identifying and recommending suitable candidates for appointment to the Board, taking into account the Company's business requirements, succession planning and the benefits of diversity.

5.7 Policy on Nomination & Remuneration

The Company has in place a Nomination and Remuneration Policy in accordance with Section 178 of the Companies Act, 2013, Regulation 19 read with Part D of Schedule II of the Listing Regulations, the applicable Reserve Bank of India Directions and the RBI Guidelines on Compensation of Key Managerial Personnel and Senior Management in NBFCs.

The Policy lays down the criteria for appointment, qualifications, positive attributes and independence of Directors, and provides the framework for the remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and employees of the Company. It also supports effective succession planning to ensure continuity of leadership and the long-term sustainability of the Company's governance framework.

The Nomination and Remuneration Policy is available on the Company's website accessible at https://admin.muthootcap.com/upioads/Nomination_and_Remuneration_Policy_783841c238.pdf.

5.8 Annual Performance Evaluation of the Board, Committees & Directors

Pursuant to the provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Company's Nomination and Remuneration Policy, the Board has carried out an annual evaluation of its own performance, the performance of its committees and individual Directors, including Independent Directors, excluding the Director being evaluated.

The detailed note on the annual evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and the Listing Regulations is provided in the Report on Corporate Governance.

5.9 Meetings of the Board of Directors

During the financial year 2025-26, your Board of Directors met ten (10) times. Further details about the Meetings of the Board are given in the Report on Corporate Governance.

5.10 Committees of the Board

The details of the Committees of the Board, their composition, terms of reference and the activities during the year are elaborated in the Report on Corporate Governance.

6 Subsidiaries / Joint Venture / Associate Companies

The Company does not have any subsidiary, joint venture or associate company. Accordingly, the provisions of the Companies Act, 2013 relating to consolidated financial statements and other applicable requirements in this regard are not applicable to the Company.

During the financial year 2025-26, no company became or ceased to be a subsidiary, joint venture or associate of the Company.

7 Change in the Nature of Business, if Any

During the financial year under review, the Company was primarily engaged in the business of financing the purchase of automobiles, with a focus on two-wheelers, used passenger vehicles and commercial vehicles, against hypothecation of the financed assets. The Company also provides personal loans and business/corporate loans to eligible customers. During the year, the Company further expanded its product portfolio by obtaining a Corporate Agent licence from the Insurance Regulatory and Development Authority of India (IRDAI) in January 2025, enabling it to distribute insurance products in compliance with the applicable regulatory framework.

During the financial year ended March 31, 2026, the Company disbursed vehicle and personal loans aggregating to Rs 2,34,154.77 lakhs. The outstanding loan portfolio under these segments stood at Rs 3,32,465.03 lakh as at March 31, 2026. Further, the Company disbursed business/corporate loans amounting to Rs 220 lakh during the year, with an outstanding portfolio of Rs 2,584.97 lakh as at March 31, 2026.

The Company's two-wheeler and used vehicle financing business is primarily sourced through an extensive network of authorised dealer locations, where dedicated Company representatives facilitate customer acquisition. In addition, business is generated through the branch network of its group company, Muthoot Fincorp Limited. The Company also continues to strengthen its digital sourcing capabilities through mobile application - Muthoot Fincorp One, thereby enhancing customer accessibility and improving the overall customer borrowing experience.

8 Material Changes & Commitments, if any, Affecting the Financial Position of the Company which have Occurred between the end of the Financial Year and the Date of this Report.

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

9 Significant & Material Orders Passed by Regulators, Courts & Tribunals

Your Directors confirm that no significant or material orders were passed by any regulatory authority, court or tribunal during the FY 2025-26 that would impact the going concern status of the Company or materially affect its future operations.

10 Risk Management

The Board oversees the risk management functions of your Company, and a separate Risk Management Committee of the Board supervises the risk management functions. Apart from this, the Company has a separate Risk Management Department that co-ordinates and administers the risk management functions thereby setting up a top-down approach on the risk management.

The Risk Management Committee of your Company has not identified any elements of risk which in their opinion may threaten the existence of your Company. Details of the risks and concerns relevant to the Company are discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report.

In order to ensure that your Company maintains high standards of risk management practices, the Chief Risk Officer (CRO) functions independently with no relationship with business verticals of the Company and reports to the Risk Management Committee. The CRO is inter alia entrusted with the responsibility of identifying, measuring and mitigating risks which may affect the Company and putting in place and monitoring the risk management policies and practices of the Company.

The Company believes that risk resilience is key to achieving higher growth. To this effect, your Company has a well- defined Risk Management Policy in place to create and protect shareholder value by minimizing threats or losses and identifying and maximizing opportunities and thereby to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The Policy lays down broad guidelines for timely identification, assessment and prioritization of risks affecting the Company in the short and foreseeable future. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately addressed or mitigated. The said policy is approved by the Board and reviewed from time to time.

The risk management framework in the Company is periodically reviewed by the Risk Management Committee of the Board. The Internal Auditors also undertake a complete review of risk assessments and associated management action plans. All material risks of the Company emerging in the course of its business are identified, assessed and monitored and necessary actions are taken on a regular basis.

The Company conducts Internal Capital Adequacy Assessment Process (ICAAP) on annual basis to assess the sufficiency of its capital funds to cover the risks specified under Pillar II of Basel guidelines. The adequacy of Company's capital funds to meet the future business growth is also assessed in the ICAAP Document. Capital requirement for current business levels and framework for assessing capital requirement for future business levels has been made. Capital requirement and Capital optimisation are monitored periodically by the Committee of Senior Management (Asset Liability Management Committee (ALCO)). The Senior Management deliberates on various options available for capital augmentation in tune with business growth. Based on these reports submitted by Senior Management, the Board of Directors evaluates the available capital sources, forecasts the capital requirements and capital adequacy of the Company and ensures that the capital available for the Company at all times is in line with the Risk Appetite of the Company.

11 Fraud Monitoring & Reporting

Pursuant to revised Master Directions - Reserve Bank of India (Fraud Risk Management in NBFCs) Directions, 2024 on Fraud Risk Management in Non-Banking Financial Companies (NBFCs) (including Housing Finance Companies) dated July 15, 2024 issued by Reserve Bank of India ("Master Directions"), your Company has constituted a Fraud Risk Monitoring Committee (FRMC) to monitor and review the cases of frauds to oversee the effectiveness of fraud risk management including root cause analysis and mitigating measures and strengthen the internal controls, risk management framework to prevent / minimize the incidence of frauds.

The Company has prepared the Framework for Early Warning Signals (EWS) on Fraud that aims to establish a robust system for the early detection and prevention of fraud. The framework outlines the governance structure, key indicators, and reporting mechanisms to ensure timely identification and mitigation of fraudulent activities. The Company also has in place a Fraud Risk Management Policy.

The Risk Management Committee reviews incidents of fraud quarterly. Annual review of the frauds is also conducted and reported by the management to Board as per the Master Directions. Among other things, details reported include modus operandi, amount involved, identity of the perpetrators of fraud, action taken against them and remedial actions taken to mitigate the risk. Further, the same is also reported to RBI and Auditors, where applicable.

12 Cyber Security

Our Cyber Security and Data Privacy Framework is critical in upholding customer trust and assuring them that their personal and financial information are handled responsibly. Our goal is to create secure, seamless and trusted financial experiences that give customers the freedom to engage with us confidently, knowing that behind every open interaction is a deeply secure foundation.

Muthoot Capital has a robust corporate governance framework for information and cyber security. The Information Security Committee, chaired by the Chief Risk Officer, meets quarterly to review the evolving cyber threat landscape and validate the Organization's cyber security controls. Risk Management Committee provides oversight of information and cyber security related initiatives, ensuring they remain aligned with regulatory directives and benchmarked against industry best practices.

The Company has adopted ISO 27001:2022 standards and regularly reviews and upgrades its implementation on regular basis to maintain the information security as per the market trend. Muthoot Capital Services Limited is an ISO 27001:2022 certified Company. On regular basis, different types of system audits are conducted by the external and internal auditors. To improve cyber security system, the Company continuously invests towards upgrading the technology, IT security related implementation, training and awareness programme.

During the year, new initiatives were taken in areas of Digital Platforms, API Security, Email Security and Attack Surface Management. Muthoot Capital has a comprehensive Information and Cyber Security Policy and has invested in robust technical and administrative controls to prevent, detect, and respond to suspicious activity. We conduct thorough assessments before introducing new systems or services, encompassing application security and vulnerability checks, penetration testing, and architecture reviews. We have also subscribed to Commercial Threat Intelligence Feeds and receive inputs from various regulatory bodies, such as the Reserve Bank of India - Cyber Security and Information Technology Examination (RBI-CSITE) and CERT-In.

13 Adequacy of Internal Audit & Financial Controls with Reference to the Financial Statements

Your Company has in place a robust and effective Internal Audit and Financial Controls system calibrated to the risk appetite of the Company and aligned to the size, scale and complexity of the business operations of the Company. The said financial controls of the Company are evaluated by the Audit Committee as per Part C of Schedule II of the Listing Regulations.

Apart from Statutory Audit and Concurrent Audit, your Company is in compliance with Section 138 of the Companies Act, 2013. Mr. Vuyyuru Vijaya Kumar has resigned from the position of Chief Internal Auditor of the Company w.e.f. the close of business hours of December 03, 2025 and the Board of Directors at its meeting held on January 21, 2026, appointed Mr. Krishnaraj S as the Chief Internal Auditor w.e.f. January 21, 2026, for a period of three years. The Board of Directors at its meeting held on March 31, 2026, appointed M/s. KPMG Assurance and Consulting Services LLP as the Information Systems (IS) Auditor to conduct the IS Audit for financial year 2025-26.

In compliance with RBI circular dated February 03, 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internal controls, processes, policies and compliance with laws and regulations, with the objective of providing an independent and reasonable assurance on the adequacy and effectiveness of the organisation's internal control and governance processes. The internal audit plan is developed based on the risk profile of the audit universe including business activities, functions, branches, application systems of the organisation. The RBIA plan includes process audits, branch audits and Information Technology (IT) & Information Security (IS) audits. Internal audits are undertaken on a periodic basis to independently validate the existing controls. The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the Company's internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management protect the Company and its reputation.

The Audit Committee oversees and reviews the functioning of the entire audit team and the effectiveness of internal control system at all levels and monitors the implementation of audit recommendations. During the year, such control systems were assessed and no reportable material weaknesses in the design or operation were observed. Improvements suggested are tracked against defined timelines for implementation. Accordingly, your Board is of the opinion that the Company's internal financial controls were adequate and effective during financial year 2025-26.

14 Corporate Social Responsibility (CSR)

At Muthoot Capital, Corporate Social Responsibility ("CSR") extends beyond philanthropic society. The Company believes that responsible business practices and meaningful community engagement are integral to long-term growth and stakeholder value creation.

The Company's CSR framework is guided by the theme “HEEL" - Health, Education, Environment and Livelihood, reflecting its commitment to fostering inclusive and sustainable development. Through its CSR initiatives, the Company seeks to make a positive and lasting impact on the communities in which it operates, while fulfilling its responsibilities as a responsible corporate citizen.

To provide strategic direction and oversight to the Company's CSR initiatives, the Board has constituted a Corporate Social Responsibility Committee ("CSR Committee"). The CSR Committee has formulated and recommended a Corporate Social Responsibility Policy, which has been approved by the Board. The Policy outlines the guiding principles and focus areas of the Company's CSR programmes in line with the activities specified under Schedule VII of the Companies Act, 2013. The CSR Policy is available on the Company's website at: https://admin.muthootcap.com/uptoads/CSR_Poticy_1_53be1477d0.pdf.

During the Financial Year 2025-26, the Company spent 227.25 lakh towards CSR activities and initiatives, thereby meeting its obligations under the applicable provisions of the Companies Act, 2013 and the Rules made thereunder. The Annual Report on CSR activities, including details of the CSR Policy, composition of the CSR Committee, amount spent during the year, and key initiatives undertaken by the Company, forms part of this Report as Annexure II.

The composition of the CSR Committee and details of its meetings held during the year are provided in the Report on Corporate Governance, forming part of the Annual Report.

15 Auditors & Audit Reports

15.1 Statutory Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants (Firm Registration No. 004207S), were appointed as the Statutory Auditors of the Company at the 30th Annual General Meeting ("AGM") held on September 25, 2024, to hold office from the conclusion of the 30th AGM until the conclusion of the 33rd AGM, in accordance with the provisions of the Companies Act, 2013.

The Statutory Auditors hold a valid Peer Review Certificate issued by the Institute of Chartered Accountants of India and satisfy the eligibility criteria prescribed under the applicable provisions of the Companies Act, 2013 and the applicable RBI Directions governing the appointment of statutory auditors of Non-Banking Financial Companies.

Audit Qualifications, Reservation or Adverse Remarks or Disclaimer

The Board has duly examined the Statutory Auditors' Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to the Accounts to the Financial Statements. Further, your directors confirm that there is no qualification, reservation or adverse remark or disclaimer in the Independent Auditor's Report provided by M/s. Sundaram & Srinivasan, the Statutory Auditors of the Company for the financial year 2025-26. There is no incident of fraud reported by the Auditors under Section 143(12) of the Act.

15.2 Secretarial Auditors

Based on the recommendation of the Audit Committee, the Board of Directors, at its meeting held on August 05, 2025, appointed M/s. S. Sandeep & Associates, Practicing Company Secretaries (Peer Review Certificate No. 6526/2025), as the Secretarial Auditors of the Company for a term of five consecutive financial years, commencing from FY 2025-26 up to FY 2029-30, subject to the approval of the shareholders. The appointment was subsequently approved by the shareholders at the 31st Annual General Meeting held on September 19, 2025, in accordance with the provisions of Section 204 of the Companies Act, 2013 and the applicable rules made thereunder.

The Secretarial Audit Report in Form MR-3 for the financial year ended March 31, 2026, forms part of this Report as Annexure III. The Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, the Secretarial Auditors have not reported any instance of fraud under Section 143(12) of the Companies Act, 2013 during the financial year under review.

15.3 Internal Auditor

Your Company has an independent internal audit department which plays a critical role in evaluating and improving the effectiveness of risk management, Control and governance process. Following the resignation of Mr. Vijayakumar Vuyyuru w.e.f. closing hours of December 03, 2025, the Board appointed Mr. Krishnaraj S as Chief Internal Auditor of the Company w.e.f. January 21, 2026, for a period of 3 (Three) years.

The internal audit department broadly assesses and contributes to the overall improvement of the organisation's governance, risk management and control processes using a systematic and disciplined approach. The internal audit team follows Risk Based Internal Audit which helps the organisation to identify the risks and address them accordingly based on the risk priority and direction provided by the Board of Directors.

16 Compliance with the Secretarial Standards on Board & General Meetings

The Company has duly complied with the applicable Secretarial Standards on Meetings of the Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.

17 Conservation of Energy & Technology Absorption, Foreign Exchange Earnings & Outgo

Considering the nature of the Company's business activities, the provisions relating to conservation of energy and technology absorption under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company. The Company is, however, committed to leveraging technology and continuously pursuing cost-effective technological upgradation to enhance operational efficiency and deliver superior customer service.

During the year under review, there were no foreign exchange earnings or outgo.

18 Whistle Blower Policy or Vigil Mechanism for Directors & Employees

Your Company has in place, a comprehensive Whistle Blower Policy in compliance with Section 177(9) & 177(10) of the Companies Act, 2013 and as per Regulation 4(2)(d)(iv) read with Para 10 of Part C of Schedule V of the Listing Regulations, which details the mechanism by which an employee of the Company may report unethical behaviour, suspected or actual fraud or violation of code of conduct of the Company. The policy is available on the website of the Company at www.muthootcap.com.

A brief note on the Whistle Blower Policy and compliance with the same is also provided in the Report on Corporate Governance, which forms part of the Annual Report.

19 Particulars of Loans, Guarantees or Investments

Pursuant to Section 186(11)(a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, loans made, guarantees given, or security provided in the ordinary course of business by a Non-Banking Financial Company registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act.

The details of the investments made by your Company are given in the notes to the financial statements.

20 Particulars of Contracts or Arrangements with Related Parties

Your Directors confirm that all contracts, arrangements and transactions entered into by the Company with related parties during the financial year ended March 31, 2026, were in compliance with the applicable provisions of the Companies Act, 2013 ("the Act") and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

In accordance with Regulation 23(2) of the Listing Regulations, all related party transactions were placed before and approved by the Audit Committee prior to their execution. The Audit Committee had also granted omnibus approval under Regulation 23(3) of the Listing Regulations for repetitive and foreseeable related party transactions, and the requisite details of such transactions were placed before the Committee on a quarterly basis for its review.

During the financial year under review, all related party transactions were entered into in the ordinary course of business and on an arm's length basis. The Company had obtained the approval of the shareholders through a Postal Ballot held on June 15, 2024, for specified related party transactions with Muthoot Bankers and Muthoot Fincorp Limited for a period of five years. Accordingly, the transactions with Muthoot Bankers in relation to the windmill business and with Muthoot Fincorp Limited pertaining to cash remittance services, space sharing arrangements and rent deposits were undertaken in accordance with the shareholders' approval.

Accordingly, the particulars of contracts or arrangements with related parties as prescribed under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided in Annexure IV in Form AOC-2.

The disclosures relating to related party transactions, as required under Ind AS 24 - Related Party Disclosures, form part of the Notes to the Financial Statements.

None of the Directors has a pecuniary relationship or transaction vis-a-vis the Company, save and except the payment of sitting fees to Independent Directors, payment of remuneration to Whole-Time Director apart from transactions in the ordinary course of business and at Arm's Length basis at par with any member of the general public.

The Board further confirms that there were no materially significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons that could have had a potential conflict with the interests of the Company. The Company has complied with the applicable provisions of Sections 177 and 188 of the Companies Act, 2013 and the Listing Regulations governing related party transactions.

The Company's Policy on Related Party Transactions, as approved by the Board and reviewed from time to time, is available on the Company's website accessible using the web link:

https://admin.muthootcap.com/uploads/56_Related_Party_Transaction_Policy_1315b62ef2.pdf.

21 Disclosure of Remuneration & Particulars of Employees

Disclosures required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia, the ratio of remuneration of each Director to median remuneration of employees, percentage increase in the median remuneration etc., forms a part of this Report as Annexure V.

In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the shareholders. Any shareholder interested in obtaining such particulars may write to Company Secretary at the Registered Office of the Company.

As the Company does not have any Holding Company or Subsidiary Company, no disclosure as required under Section 197(14) of the Act has been made.

22 Listing

The equity shares of the Company have been listed on BSE Limited since April 24, 1995, and on the National Stock Exchange of India Limited since August 24, 2015. The Company's debt securities are listed on BSE Limited. During the year under review, the Company issued Green Bonds aggregating 15,000 lakh, which were listed on the National Stock Exchange of India Limited. The Company has complied with the applicable listing requirements of the respective stock exchanges during the year under review. The Company confirms that it has paid the annual listing fees for the FY 2025-26 to the respective stock exchanges.

23 Business Responsibility & Sustainability Report (BRSR)

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requires the top one thousand listed entities based on market capitalization, to have, a "Business Responsibility and Sustainability Report" as part of their Annual Report, containing the environmental, social and governance disclosures, in the format as may be specified by the Board from time to time. As your Company is not one amongst the top one thousand listed companies based on the market capitalisation, this Report is not applicable to the Company.

24 Fair Practice Code (FPC)

Your Company has adopted a Fair Practices Code ("FPC"), approved by the Board of Directors, in accordance with the guidelines issued by the Reserve Bank of India, with the objective of ensuring fair business practices, transparency in dealings with customers and dissemination of adequate information to enable informed decision-making.

The FPC is available on the Company's website at www.muthootcap.com. The Board reviews the FPC periodically to ensure its continued adequacy, effectiveness and alignment with the applicable regulatory requirements.

25 Customer Grievance

Your Company has established a dedicated Customer Grievance Redressal Cell for receiving, monitoring and resolving customer complaints and grievances. Your Company remains committed to ensuring fair, transparent and unbiased treatment of all customers at all times. Customer complaints and grievances are addressed promptly and courteously, with due emphasis on timely resolution and customer satisfaction.

26 Annual Return

In accordance with the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company in Form MGT-7 is available on the Company's website at www.muthootcap.com.

27 Directors' Responsibility Statement

In accordance with the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors state that:

a) In the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards had been followed with proper explanation relating to material departures, if any.

b) We had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

d) We had prepared the annual accounts on a going concern basis;

e) We had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

28 Credit Rating

The Credit Ratings assigned to the various instruments issued/faciLities availed by the Company as on March 31, 2026, is as given below:

As on date of this report, it may be noted that Crisil Ratings upgraded its ratings on the long-term bank facilities and debt instruments of the Company to 'Crisil AA-/Crisil PPMLD AA-/Stable' from 'Crisil A+/Crisil PPMLD A+/Positive'. Crisil Ratings also reaffirmed its ratings of 'Crisil A1+', on the commercial paper instruments issued by the Company.

29 Disclosures Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company is committed to fostering a work environment that promotes dignity, respect, equality and inclusivity, and provides a safe workplace for all employees. In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), the Board has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. An Internal Complaints Committee ("ICC") has been constituted in compliance with the provisions of the POSH Act to redress complaints relating to sexual harassment at the workplace. During the financial year 2025-26, one complaint was received under the provisions of the POSH Act.

Details of cases reported to Internal Complaints Committee during the FY 2025-26 are as under:

30 Compliance with Maternity Benefit Act, 1961

Your Company remains committed to providing a supportive, inclusive and legally compliant workplace for all its employees. During the financial year 2025-26, the Company complied with all applicable provisions of the Maternity Benefit Act, 1961. Eligible women employees were provided all statutory benefits, including paid maternity leave, in accordance with the provisions of the Act. During the year under review, 26 women employees availed maternity benefits. Your Company ensured the timely processing and disbursement of such benefits in compliance with the applicable statutory requirements. The Company did not receive any complaints or grievances relating to the provisions of the Maternity Benefit Act, 1961 during the year.

31 Regulatory Compliance

Your Company is a listed Non-Banking Financial Company with Deposit-taking License (NBFC-D). The Company has complied with and continues to comply with all applicable laws, rules, regulations, circulars and guidelines, including the directions issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The Company has carried on its business in accordance with the Certificate of Registration issued by the RBI and has not undertaken any activity other than those permitted under the applicable regulatory framework for NBFCs.

32 Other Disclosures

a. Your Company, in the capacity of Financial Creditor, has not filed any applications with National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 during the FY 2025-26 for recovery of outstanding loans against any customer.

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

c. The provision of Section 148 of the Act relating to maintenance of cost records and cost audit are not applicable to your Company.

d. Your Company has not defaulted in repayment of loans from banks and financial institutions. There were no delays or defaults in payment of interest / principal of any of its debt securities and deposits accepted.

e. The equity shares of your Company were not suspended from trading during the year.

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

g. Disclosure regarding details relating to deposits covered under Chapter V of the Companies Act, 2013 is not applicable since your Company is a Non-Banking Financial Company regulated by Reserve Bank of India. Your

Company accepts deposits as per the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025.

h. Your Company continues to comply with all the applicable laws, regulations, guidelines, etc. prescribed by RBI from time to time. The Board of Directors have framed various policies as applicable to the Company and periodically reviews the policies and approves amendments as and when necessary.

i. There was no instance during the year where the Board has not accepted the recommendations of the Audit Committee requiring disclosure pursuant to Section 177(8) of the Companies Act, 2013.

j. A Compliance Certificate from M/s. S Sandeep & Associates, Practicing Company Secretaries, regarding compliance of conditions of Corporate Governance forms part of this Report as Annexure VI.

Acknowledgements

Your Directors wish to place on record their sincere appreciation for the continued trust, support and co-operation extended by the Company's shareholders, customers, depositors, debenture holders, bankers, business associates and other stakeholders. The Board also gratefully acknowledges the guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Registrar of Companies, Kerala and Lakshadweep, BSE Limited, National Stock Exchange of India Limited, Registrar and Share Transfer Agents, Credit Rating Agencies and other statutory and regulatory authorities.

Your Directors place on record their deep appreciation for the commitment, dedication and exemplary efforts of all employees of the Company ("Muthootians"), whose unwavering support and contributions have been instrumental in sustaining the Company's growth and operational excellence. The Board also expresses its gratitude to all well-wishers for their continued confidence in and support of the Company.