To,

The Members of

Star Housing Finance Limited

The Board of Directors are pleased to present the Company's Twentieth Director's Report and the Audited Financial Statement for the Financial Year ("FY") ended March 31, 2025.

COMPANY OVERVIEW

Star Housing Finance Limited ("Star HFL") is BSE listed rural focused housing finance company operational in the affordable housing finance space helping achieve the dreams of the first-time home buyers from the Economic Weaker Section / Low Income Group to own their first house through simple and easy processes.

Since the commencement of our home loan business operations in Sep 2009, Star HFL has worked with the intent to enable homeownership through providing housing finance to target EWS/LIG customers in semi-urban and rural geographies. Star HFL is managed by a team of experienced housing finance professionals with strong domain at experience at regional and national level. Star HFL offers retail home loans up to INR 25 lakhs.

FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The Company's financial performance for the Financial Year ended March 31, 2025, is summarized as below:

BUSINESS PERFORMANCE

Note: Figures of the previous year/ period have been regrouped and/or reclassified whenever necessary while preparing the statement as per IND-AS requirements.

DIVIDEND

The Company has in place a Dividend Distribution Policy formulated in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), which intends to ensure that a rationale decision is taken, with regard to the amount to be distributed to the shareholders as dividend, after retaining sufficient funds for the Company's growth, to meet its long-term objective and other purposes. The Policy also lays down various parameters to be considered by the Board of Directors of the Company before recommendation of dividend to the Members of the Company.

Considering the performance of the Company during the financial year 2024-2025, the Board of Directors felt the need to strike a balance between being prudent and conserving capital in the Company, while at the same time catering to the expectations of shareholders and also considering the Dividend Distribution Policy and in terms of RBI Circular No. DOR.ACC.REC.No.23/21.02.067/2021-22 dated 24th June, 2021, have recommended payment of final dividend amounting to Rs. 0.10 per equity share of Rs.5/- for the financial year ended March 31, 2025 in its meeting held on 14th August 2025. The dividend payable shall be subject to the approval of the Members at the ensuing twentieth Annual General Meeting (‘AGM') of the Company.

The dividend declared by the Company for the Financial Year ended 31st March, 2025 is in compliance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy is available on the website of the Company at https://www.starhfl.com/wp-content/uploads/2024/08/Dividend-Distribution-Policy.pdf

TRANSFER TO RESERVES

During the year under review, your Company appropriated Rs. 283.76 Lakhs to the Statutory Reserve under Section 36(1) (viii) of the income Tax Act, 1961 read with Section 29C of National Housing Bank (NHB) Act, 1987 out of the amount available for appropriation and an amount of Rs. 1,109.91 Lakhs is proposed to be retained in the Profit and Loss Account.

Authorized Share Capital

During the year, the company's Authorized share capital remain unchanged. Hence, the authorized share capital of the Company as at March 31, 2025 is Rs. 50,00,00,000/- (Rupees Fifty Crore only) consisting of 10,00,00,000 (Ten Crore) equity shares of Rs. 5/- (Rupees Five) each.

Issued and Paid-up Capital

The paid-up Equity Share Capital of the Company at on March 31, 2025 is Rs. 39,48,19,740/- (divided into 7,89,63,948 Equity Shares of Rs. 5/- each).

During the year under review:

1) The Board of Directors of the Company in their meeting held on 18th June, 2024 has allotted 60,000 fully paid up equity shares of face value Rs. 5/- each under "Akme Employee Stock Option Plan 2021." A certificate from the Secretarial Auditors on the implementation of your Company's ESOP will be available at the ensuing Annual General Meeting ("AGM") for inspection by the Members. The disclosure with regard to ESOP as required under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 is available on the website of the Company at www.starhfl.com and also disclosed in the accompanying financial statements.

2) The Board of Directors of the Company in their meeting held on 25th July, 2024 has issued and allotted 1,83,332 Equity Shares of Rs. 5/- each at an issue price of Rs. 64/- per Equity Share including share premium of Rs. 59/- per equity share, against exercise of Warrants.

Lapse of Warrants and Forfeiture of Subscription Amount:

The Company had allotted 93,78,500 warrants on December 28, 2023, at an issue price of Rs. 64/- per warrant, each convertible into one equity share. The warrants issued carried an exercise period of 18 (Eighteen) months within which the warrant holders must exercise their right.

In line with the above, during the year under review, 1,83,332 equity shares of Rs. 5/- each were allotted upon exercise of warrants on July 25, 2024, at an issue price of Rs. 64/- per share, including a share premium of Rs. 59/- per share. The remaining unexercised warrants got lapsed upon expiry, and the 25% upfront subscription amount paid by the allottees was forfeited by the Company.

Apart from above, the Company has not issued any shares or convertible securities.

EMPLOYEE STOCK OPTION PLAN

a) During the year under review, your Company has allotted 60,000 Equity Shares under the "Akme Employee Stock Option Plan 2021" to the eligible Employee of the Company on June 18, 2024.

Total 30,19,700 options under the "Akme Employee Stock Option Plan 2021" are available for future grants as these were not exercised by the employees within the exercise period and were added back to the pool of the scheme for grant in future. 1,20,000 options are yet to exercise under the said scheme.

b) During the year under review, your Company has granted 77,00,000 stock options (convertible into 77,00,000 Equity Shares of the company, upon exercise ) under "Star Housing Finance Limited Employee Stock Option II 2023" ("ESOP 2023"/ "Plan") to the Eligible employees of the Company. However, all the granted options were surrendered by the eligible employees. These ESOPs are added back to the pool of the scheme for grant in future.

CREDIT RATING

The following ratings have been reaffirmed/assigned to the Company for its Bank Loan and Non-Convertible Debentures (NCDs) during the Year by India Ratings & Research Agency & Care Edge Ratings Agency:

The following ratings have been reaffirmed/assigned to the Company for its bank facilities after the Closure of financial Year by India Ratings & Research Agency

A. BANKS AND FINANCIAL INSTITUTIONS

During the Financial Year 2024-25, your company raised term loans of Rs. 175 crores from the following institutions:

The Outstanding Borrowings (other than debt securities) as on March 31, 2025 stood at Rs. 38118.23 Lakhs.

B. NON-CONVERTIBLE DEBENTURES (NCDs)

The details of outstanding NCDs of the Company as on March 31, 2025 is as follows:

Your Company has made timely payment of interest and principal amount on the respective due dates for NCDs issued by the Company and there has been no default in payment. The necessary disclosures as per SEBI Master Circular no. SEBI/HO/DDHS/PoD1/P/CIR/2024/54 dated May 22, 2024 has been disclosed to BSE Limited and are available at the website of the Company. Further, during the year under review, the Company has not issued any Non-Convertible Debentures.

Pursuant to NBFC-HFCs (RBI) Master Directions, 2021, the following statement is provided -

REVIEW OF OPERATIONS

Your Company is registered as a Non-deposit taking Housing Finance Company (HFC) with RBI to carry out the housing finance activities in India.

In accordance with the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021, Housing Finance Company shall mean a Company incorporated under the Companies Act, 2013 that fulfils the following Principal Business Criteria (PBC):

a) It is an NBFC whose financial assets, in the business of providing finance for housing, constitute at least 60% of its total assets (netted off by intangible assets).

b) Out of the total assets (netted off by intangible assets), not less than 50% should be by way of housing financing for individuals.

During the year, the Company has met the aforesaid principal business criteria for HFCs.

To build a quality loan book, your Company endeavors to adopt superior underwriting practices backed by robust monitoring and recovery mechanism. Your Company is committed towards improving efficiency in all its processes and service levels for its customers.

Your Company's thrust continues to be the affordable housing segment, with its focus on catering to the aspirations of low and middle-income Indian families who dream to own their homes. Your Company has been facilitating credit access to the low and middle-income self-employed customers in semi-urban and rural areas in India. The majority of your Company's customers have limited access to formal banking credit facilities.

During the Financial Year under review, your Company delivered a resilient performance, which is reflected in the following financial snapshot:

? Income & Profits

Total Revenue from operations increased by 54.07% to Rs. 9,49 6.27 Lakhs for the Financial Year ended March 31, 2025 as compared to Rs. 6,163.55 Lakhs for the previous Financial Year. Profit before Tax (PBT) was 23.68 % higher at Rs. 1,418.80 Lakhs as compared to Rs. 1,147.12 Lakhs for the previous Financial Year. The Total Comprehensive Income for the Financial Year 2024-25 increased by 21.88% at Rs. 1,071.78 Lakhs in the Financial Year as compared to Rs. 879.39 Lakhs in the Previous Financial Year.

? Sanctions

During the Financial Year under review, your Company sanctioned housing loans of Rs. 18,246.88 Lakhs as compared to Rs. 23,796.11 Lakhs sanctioned in the previous Financial Year. The cumulative loan sanctions since inception of your Company stood at Rs. 81,571.83 Lakhs as at March 31, 2025.

? Disbursements

During the Financial Year under review, your Company disbursed loans of Rs. 14,951.44 Lakhs (including off balance sheet disbursement of Rs. 1039.90 lacs) as compared to Rs 24,072.63 Lakhs (including off balance sheet disbursement of Rs. 3,592.33 Lakhs) disbursed in the previous Financial Year.

? Capital Adequacy

The Company has been maintaining the Capital Adequacy Ratio (CAR) above the minimum required level of 15% as prescribed by Reserve Bank of India (RBI).

The Capital Adequacy Ratio of the Company as at March 31, 2025 is 50.55 % as against 54.65 % as at March 31, 2024.

? Assets Under Management (AUM)

The AUM of your company stood at Rs. 52,069.78 Lakhs (including off balance sheet AUM of Rs. 10,275.24 Lakhs) as at March 31, 2025 as against Rs. 42,686.39 Lakhs (including off balance sheet AUM of Rs. 4,396.10 Lakhs) in the previous financial year, registering a growth of 21.98%

Prudential Norms for the HFCs Issued By RBI

Star Housing Finance Limited ("the Company") is registered with the National Housing Bank (NHB) as a Non-Deposit Accepting Housing Finance Company (HFC). Pursuant to the Reserve Bank of India's (RBI) Scale Based Regulation (SBR) framework notified on October 22, 2021, all HFCs are classified under the Middle Layer for regulatory purposes. This revised framework, which became effective from October 1, 2023, covers key areas such as capital adequacy, governance, and prudential norms.

The Company has taken necessary steps to ensure full compliance with the SBR guidelines applicable to NBFC-Middle Layer (NBFC-ML) entities.

Further, in line with RBI Circular No. D0R.FIN.HFC.CC.No.120/03.10.136/2020-21 dated February 17, 2021 (updated as on February 27, 2025), the Company complies with the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 and all other applicable regulations issued by the RBI and NHB.

Further, the Company's Non-Convertible Debentures (NCDs) issued on a private placement basis are listed on the Wholesale Debt Market (WDM) Segment of BSE Limited, and the Company is in compliance with the provisions of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Asset Classification and Provisioning Norms:

The RBI has come out with certain clarifications on Income Recognition, Asset Classifications and Provisioning norms with a view to have a uniformity across all the lending institutions including HFCs vide their notification dated November, 12 2021. As per the notification, all the NBFCs have to specify the exact due dates of loan repayment along with the methodology of SMA/NPA classifications reckoning from the due dates, in their loan agreements. Upgradation of accounts classified as NPA to STANDARD may be done only if entire arrears of interest and principal are paid by the borrower. Further, the companies would also provide consumer education literature on their websites explaining with examples, the concepts of overdue SMA and NPA classification and upgradation of accounts. The company has been complying with these instructions meticulously.

PROSPECTS AND DEVELOPMENTS:

There is a very huge market to be served, which needs an efficient last mile delivery of credit, thus creating enormous opportunity for all the financial institutions and HFCs in special. The Company continues to pursue the strategy of being multi-product and multi-location, thus giving the distinct edge from the risk management and scalability perspective. The focus across the product is of catering to the lower and the middle income segment, which are the key drivers of our economy.

HOUSING FINANCE:

The Company aims at serving the middle income and the lower income sector of the economy, especially in the semi urban and rural areas, which are reckoned to be the key drivers of the sector in the coming decades. Full-fledged efforts are on to execute efficiently, as per the detail planning. Being aware of the challenges involved in serving this class of the society, a very cautious approach is adopted in building up volumes. Nevertheless, Company is quite confident of building substantial volumes in the near future. The Company's rural initiative will also start yielding results shortly. It is worth mentioning that despite the creditworthy customer class, ascertaining the title of the property remains a challenging job. The Company is actively involved with all the stakeholders to smoothen the process and is assertive in getting the right set of documents. We continue to endeavor relentlessly and are confident of creating a quality portfolio and add value to the ecosystem of country's housing finance.

DISTRIBUTION NETWORK:

Your company has been successful in continuous expansion of its branch network with a view to support its sustainable growth, deeper penetration in the states in which the Company operates and enhancing customer reach. During the Financial Year under review, the Company has expanded its branch network to 6 states with 35 branches as on March 31, 2025. Your Company operates in Akola, Baramati, Chennai, Hingoli, Indore, Jaipur, Jalgoan, Mahad, Nashik, Pune, Udaipur, Rajsamand, Surat, Dewas, Ahmednagar, Vapi, Vyara, Pithampur, Khargone, Dhar, Chalisgaon, Kalyan, Kolhapur, Washim, Panvel, Virar, Buldhana, Hapur, Meerut, Ghaziabad, Dudu, Mathura, Kanchipuram, Sholinghur, Vellore.

HUMAN RESOURCE MANAGEMENT:

During the year, the HR continued to provide timely on-board experienced resources across all locations, imparting functional and system training to develop productive resources for all the functional teams. The Company also gives an opportunity to identify and develop the internal talent pool. The Company hired professionals at senior positions as Functional Heads for heading the various Departments of the Company, having relevant industry experience and expertise to strengthen and grow the housing finance business of the Company.

The Company's success depends largely upon the quality and competence of its Management team and Key Personnel. Attracting and retaining talented professionals is therefore a key element of the Company's strategy and a significant source of competitive advantage. The Company has a diverse workforce of 266 employees as on March 31, 2025. There are 244 male and 42 female employees as on the financial year end.

Human resource development is considered vital for effective implementation of business plans. Constant endeavors are being made to offer professional growth opportunities and recognition, apart from imparting training to the employees at all levels. Your Company has also provided the sales training to the new recruits to provide them better understanding of the Company and align them towards the working culture of the Company.

Your Company will always strive to strengthen this most important resource in its quest to have enabling human capital.

CAPITAL AND LIABILITY MANAGEMENT:

The Company in tandem with its philosophy of pursuing the mission of "Excellence through Endeavors" will strive to maximize the shareholders' wealth. The Company continues to pursue an efficient capital management policy, which aims at maximizing the return on capital employed and at the same time adhering to the prudential guidelines laid down by RBI/NHB from time to time.

The Company by virtue of its performance over the years enjoys very good relationships with many leading banks and financial institutions. The Company could raise the required resources from various banks and financial institutions easily. We anticipate the same response from all our lending partners for the coming years too. The Company anticipates credit lines from few more banks and financial institutions besides the existing ones.

During the year, when the whole sector was looked upon as a risky proposition, the Company could not only manage to raise the required resources but also obtained credit lines for the coming year.

Your Company continues to command the respect and the confidence of Bankers as their extended channel in their task of providing efficient delivery of credit. The company acknowledges the constructive support of the Investors and Banks.

RESOURCE MOBILISATION:

Your Company's borrowing policy is under the control of the Board. The Company has vide special resolution passed on 10th August, 2023, under Section 180 (1) (a) & 180(1)(c) of the Companies Act, 2013, authorized the Board of Directors to borrow money upon such terms and conditions as the Board may think fit in excess of aggregate of paid up share capital, free reserves, security premium of the Company up to an amount of Rs. 700 crores and the total amount so borrowed shall be within the limits as prescribed under the regulatory directions issued from time to time. The prevalent relevant directions issued by RBI under Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 as amended are being complied with.

Your Company continued to use a variety of funding sources to optimize funding costs, protect interest margins and maintain a diverse funding portfolio which further strengthened its funding stability and liquidity needs. Your Company continued to keep tight control over the cost of borrowings through negotiations with lenders and thus, raised resources at competitive rates from its lenders while ensuring proper asset liability match.

Your Company continued to diversify its funding sources by exploring the Capital Market through private placement to Financial Institution, Banks, NHB Refinance, NHB SRF (Special Refinance Facility Assistance), NHB's LIFT (Liquidity Infusion Scheme).

DIRECT ASSIGNMENT AND CO-LENDING:

In line with our strategic objective to accelerate AUM growth and deepen our presence in underserved markets,the Company has entered into a Direct Assignment (DA) transaction to the tune of Rs. 6203.83 Lakhs and a co-lending partnership with Vastu Housing Finance Corporation Limited (Vastu HFC), during the year under review. Under the DA model, the Company will efficiently deploy capital to Vastu HFC, enabling us to expand our geographic reach and optimize our balance-sheet utilization, while Vastu HFC strengthens its retail housing portfolio.

Through the co-lending framework, the Company will originate, underwrite and service affordable home loans - targeting over 5,000 first-time buyers in the EWS/LIG segments across semi-urban and rural regions - leveraging Vastu HFC's capital support, technology platform and risk-sharing mechanisms. This collaboration not only reinforces our commitment to financial inclusion and first-time home ownership, but also provides both organizations with mutual access to best-in-class processes, enhanced credit flow and scalable growth in priority markets.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company, being a HFC registered with the NHB and engaged in the business of providing loans in ordinary course of its business, is exempt from complying with the provisions of Section 186 of the Companies Act, 2013, with respect to loans. However, details of the loans made, guarantee given or security provided by the Company other than in the ordinary course of business are given in the Notes to accounts forming part of the Audited Financial Statements for the year ended March 31, 2025.

ALTERATION IN MEMORANDUM AND ARTICLES OF ASSOCIATION:

During the year under review, the Company has not made any alteration in Memorandum and Article of Association of the Company. The Copy of the aforesaid documents are available on the Company's website at https://www.starh- fl.com/wp-content/uploads/2025/04/1.-MOA-and-AOA.pdf

NON-PERFORMING ASSETS AND PROVISIONS FOR CONTINGENCY:

The Gross NPA of your Company as on March 31, 2025 was Rs. 769.14 Lakhs; 1.84% (previous year Rs. 572.56 Lakhs; 1.50 %). The Net NPA as on March 31, 2025 was Rs. 580.65 Lakhs; 1.40% (previous year 388.90 Lakhs; 1.02%). The regulatory and compliance reporting, has been done in accordance with the prudential guidelines for Non-Performing Assets (NPAs) issued by the Reserve Bank of India under Master Direction - Non Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021.

A detailed comparison of asset classification as per the Ind AS provisions and IRACP norms has been provided under Disclosures required by Reserve Bank of India/National Housing Bank forming part of the Audited Financial Statements.

Your Company has made adequate provision for the assets on which installments are overdue for more than 90 days and on other assets, as required. For details on the impairment provisioning, please refer to disclosures required by RBI/NHB to the financial statements. By way of prudence and abundant caution, Company has provided additional provision over and above the RBI guidelines as on March 31, 2025.

The Company has maintained cumulative NPA provision of Rs. 188.49 lakhs against the required provision of Rs. 187.91 lakhs. Further for standard assets Company carries provision of Rs. 198.10 lakhs.

DETAILS RELATING TO DEPOSITS:

The Company has been granted registration by the Reserve Bank of India as a non-deposit taking Housing Finance Company and hence the provisions relating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable to the Company.

BSE COMPLIANCES:

The Company has submitted compliances as required quarterly/half yearly/ yearly in accordance with the prescribed guidelines.

Further, the annual listing fees, as prescribed, have been paid to BSE Limited within the due time.

INVESTOR COMPLAINTS AND COMPLIANCE:

The Company has not received any investor complaints during the year and the report of the same was submitted to BSE pursuant to SEBI (LODR) Regulations, 2015.

ONLINE DISPUTE RESOLUTION (ODR) MECHANISM:

In order to streamline the dispute resolution mechanism in the securities market, SEBI vide its circular dated 31 July 2023, as amended from time to time, read with Master Circular no. SEBI/HO/OIAE/OIAEJAD3/P/CIR/2023/195 dated 28 December 2023, introduced a common Online Dispute Resolution ("ODR") mechanism which harnesses online conciliation and arbitration for resolution of all kinds of disputes relating to securities market.

Under ODR mechanism, an investor shall first take up his/her/their grievance by lodging a complaint directly with the concerned Market Participant viz., Company. If the grievance is not redressed satisfactorily at the first phase, the investor may escalate the same through the SCORES Portal in accordance with the process laid out therein. ODR Mechanism provides a third level of escalation, if the investor is not satisfied with the resolution provided by the Company, the investor may initiate the dispute through the ODR portal within the timeframe prescribed under the circular. The ODR portal can be accessed at https://smartodr.in/login.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

In accordance with the provisions of Sections 124, 125 and other applicable provisions, if any, of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as ‘IEPF Rules') (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the amount of dividend remaining unclaimed or unpaid for a period of 7 (Seven) years from the date of transfer to the Unpaid Dividend Account is required to be transferred to the Investor Education and Protection Fund (IEPF) maintained by the Central Government. Further as per the provisions of Section 124(6) of the Act read with IEPF Rules, the shares in respect of which dividend has not been paid or claimed by the Shareholders for 7 (Seven) consecutive years or more are also required to be transferred to the designated demat account created by the IEPF Authority.

Your Company does not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there are no funds which were required to be transferred to IEPF till the date of this Report.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF FINANCIAL YEAR TILL THE DATE OF REPORT:

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate till the date of this report.

Listing of Equity Shares on the National Stock Exchange of India Limited (NSE)

The Company has made an application for the direct listing of its equity shares on the National Stock Exchange of India Limited (NSE) on July 16, 2025, with a view to enhance liquidity, broaden investor participation, and increase visibility in the capital markets. The listing, upon approval, is expected to provide an additional platform for trading of the Company's shares and further strengthen corporate governance and transparency standards.

Further, in respect thereof, the Company has made adequate and timely disclosures to the Stock Exchange, in compliance with the applicable regulatory requirements.

Reclassification of Promoter Shareholding

The Company has received a request from the Promoters and Promoter Group of the Company for reclassification of their shareholding from the "Promoter and Promoter Group" category to the "Public" category in accordance with Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The said request is being processed in compliance with the applicable provisions of SEBI LODR Regulations and is subject to necessary approvals from the Stock Exchange, members of the Company and other regulatory authorities, as may be required.

PROVISION OF FINANCIAL ASSISTANCE TO THE EMPLOYEES OF THE COMPANY FOR THE PURCHASE OF ITS OWN SHARES:

The company has not provided any financial assistance to its employees as per Section 67 of the Companies Act, 2013 (the ‘Act") for the purchase of its own shares.

SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:

As on March 31, 2025, the Company does not have any subsidiaries, associates, or joint ventures. Accordingly, the requirement of attaching Form AOC-1 is not applicable to the Company.

PARTICULARS OF EMPLOYEES:

In terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures with respect to the ratio of remuneration of director to median remuneration of employees, percentage increase in the median remuneration of the Company have been provided in Annexure VIII annexed to this Report.

Further, statement containing details top ten (10) employees in terms of the remuneration and employees in receipt of remuneration as required under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the ensuing Annual General Meeting. A copy of the statement may be obtained by shareholders by writing to the Secretarial Department at the Registered & Corporate Office of the Company or at compliance@starhfl.com.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNING AND OUTGO:

In accordance with the provision of sec 134(3) (m) of the Act, read with Rule 8 of the Companies (Accounts) Rules 2014 the requisite information relating to your Company are as under:

A. Conservation of energy:

The Company does not fall under any of the industries covered by the Companies (Disclosure of particulars of Directors) Rules, 1988.

B. Technology absorption:

Your company has successfully deployed a next generation, core housing virtual solution to stay at the forefront of technological innovation, enhance operational efficiency, and accelerate end to end loan processing. By integrating all branch offices with the head office on a secure, cloud based LOS LMS platform, you have partnered with Jaguar Software India to customize the system to your specific regional requirements. This strategic collaboration delivers the following key benefits:

? Document Digitization: All customer and loan documents are captured electronically, eliminating paper based workflows.

? Centralized Operations: Real time connectivity across all branches and the corporate office ensures consistent data access and streamlined communication.

? Accelerated Loan Processing: Automated workflows and predefined approval hierarchies reduce turnaround times significantly.

? On Demand Reporting: Single click generation of comprehensive reports enhances transparency and decision making.

? Robust Collaboration: An inter departmental solution fosters seamless coordination between sales, credit, underwriting, and operations teams.

? Mobile Field Enablement: Android and iOS applications empower field staff to submit initial documents and verification remarks immediately from customer premises.

? Cost and Risk Reduction: Savings in logistics, handling, and printing, coupled with minimized physical document movement, lower operational costs and mitigate security risks.

? Enhanced Credit Analysis: Automated data capture and structured workflows improve the consistency and quality of credit assessments.

? Enterprise Grade Security: A cloud-based platform with end-to-end encryption and role based access control safeguards sensitive loan information.

? Maker Checker Controls: Clearly defined maker checker roles ensure that only authorized personnel can grant final approval.

? Comprehensive Audit Trails: Digital logs preserve the complete history of each loan transaction, facilitating audits and traceability.

? Simplified Workflows and MIS: Regular management information system (MIS) updates provide actionable insights and reinforce process discipline.

Jaguar Software India, as your dedicated service provider, will deliver ongoing platform upgrades and implement the latest security protocols as required, ensuring that your solution remains both cutting edge and secure.

The RBI vide its Master Direction - Information Technology Framework for the NBFC Sector dated November 7, 2023, which shall apply mutatis mutandis to all HFCs also, had notified Information technology framework (guidelines) for all NBFCs including Housing Finance companies ('HFCs') to enhance safety, security, efficiency in process leading to benefit for HFCs and their customer.

Your company is in compliance with the aforesaid guidelines.

Your company does not have any foreign exchange earnings and outgo during the year under review.

RISK MANAGEMENT FRAMEWORK:

With the challenging macroeconomic conditions and uncertainties, there are heightened risks faced by the Company which can be inherent or market-related risks. There has been a continuous focus on identifying, measuring and mitigating risks by the Company. As a housing finance company, the Company is exposed to various risks like credit risk, market risk (interest rate and currency risk), liquidity risk and operational risk (technology, employee, transaction and reputation risk). A key risk in the competitive home loans, and mortgage-backed funding in general is losing customers that transfer out their loans for small gains in interest rates, this represents a significant loss of opportunity to the Company given the long-term nature of mortgage loans. To identify and mitigate all these risks, the Company has an effective Risk Management Control Framework that has been developed compassing all the above areas.

The Company has a Risk Management Committee (RMC). The RMC has met Five times during the year and kept an active watch on the emergent risks the Company come across during the course of business. The Risk Management Committee oversees the process of identification, measurement and mitigation of risks.

During the Financial Year under review, the Risk Management Committee reviewed the risks associated with the business of your Company, undertook its root cause analysis and monitored the efficacy of the measures taken to mitigate the same. In addition, the Committee reviewed and approved various policies aimed at strengthening the Company's risk management framework and ensuring alignment with regulatory and strategic objectives.

The Board of Directors in its meeting held on June 18, 2024 has appointed Mr. Ajit Kumar Satpathy as Chief Risk Officer of the Company for a tenure of 3 years w.e.f. July 1, 2024 to function independently and ensure highest standards of risk management.

The Company has a Risk Management Policy in place and the same can be accessed on the website of the Company at https://www.starhfl.com/wp-content/uploads/2023/12/1.-Risk-Management-Policy.pdf

ASSET LIABILITY MANAGEMENT COMMITTEE (ALCO):

Pursuant to the RBI Guidelines, the Company has in place a Committee of Directors for Asset Liability Management ('ALM'). It consist of the following persons as its members:

Mr. Kalpesh Dave -Chairman Mr. Natesh Narayanan-Member*

Mr. B.S. Kachhawaha- Member*

Mr. Ajit Kumar Satpathy -Member Mr. Anoop Saxena-Member

* Mr. B.S. Kachhawaha, Chief Compliance Officer, resigned from his position w.e.f. 14th May 2025 and Mr. Natesh Narayanan, Chief Financial Officer, resigned from his position w.e.f 15th June 2025

The ALCO lays down policies and quantitative limits that involve assessment of various types of risks and shifts in assets and liabilities to manage such risks. ALCO ensures that the liquidity and interest Rate risks are contained within the limits laid down by the Board.

The minutes of the Committee meetings were placed before the Board for their noting and review.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has in place a Whistle Blower Policy in place, which provides for a framework to report the genuine concerns against the suspected or confirmed fraudulent activities, allegations of corruption, violation of the Company's Code of Conduct and leak or suspected leak of unpublished price sensitive information.

The Company will provide adequate safeguards against victimization of persons who use this mechanism. Such persons shall have direct access to the Chairman of the Audit Committee when appropriate.

The whistle blower policy is placed on the website of the Company and can be accessed at https://www.starh- fl.com/wp-content/uploads/2073/06/Vigil-Mechanism-Whistle-Blower-Policy.pdf

During FY 2025, no person was denied access to the Audit Committee or its chairperson under this policy.

CODES AND STANDARDS

Your Company has formulated various policies and codes in compliance with provisions of Directions and Guidelines issued by the Reserve Bank of India, Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and to ensure high ethical standards in the overall functioning of the organization. The said policies and codes are periodically reviewed by the Board of Directors. The key policies and codes as approved by the Board of Directors and the respective compliance thereunder are detailed herein below:

a) Know Your Customer & Anti Money Laundering Measure Policy

Your Company has approved Know Your Customer & Anti Money Laundering Measure Policy (KYC & AML Policy) in place and adheres to the said Policy. The said Policy is in line with the Reserve Bank of India, Master Directions - 2016 on KYC and AML applicable to all regulated entities. The Company has also adhered to the compliance requirement in terms of the said policy relating to the monitoring and reporting of cash / suspicious transactions. The Company furnishes to Financial Intelligence Unit (FIU), India, in the electronic medium, information of all cash transactions of the value of more than Rupees Ten Lakh or its equivalent in foreign currency and suspicious transactions whether or not made in cash, in terms of the said Policy. The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/wp-content/uploads/7073/17/Policy-on-KYC-and-AMI-Standards-Final-7-.pdf

b) Fair Practice Code

Your Company has in place a Fair Practice Code (FPC), which includes guidelines on appropriate staff conduct when dealing with the customers and on the organization's policies vis-a-vis client protection. The FPC captures the spirit of the Reserve Bank of India guidelines on fair practices for Housing Finance Companies. During the year under review, FPC was modified by the Board and the grievance redressal mechanism within the Company was further strengthened. The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/wp-content/up- loads/7073/17/Fair-practice-Code.pdf

c) Policy on Disclosure of material events and information

The Company has in place the Policy on Disclosure of Material Events and Information, in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to determine the events and information which are material in nature and are required to be disclosed to the Stock Exchanges. The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/wp-content/uploads/2024/08/- Disclosure-of-policy-for-determination-of-materiality-of-events-or-information.pdf

d) Code of Conduct for Board Members and the senior management

The Company has adopted Code of Conduct for the Board of Directors and the Senior Management Personnel to set forth the guiding principles on which the Company and its Board and Senior Management Personnel shall operate and conduct themselves with multitudinous stakeholders, government and regulatory agencies, media and anyone else with whom it is connected. The policy is placed on the website of the Company and can be accessed at https://www.starh- fl.com/wp-content/uploads/2023/02/Code-of-conduct-of-Board-of-Directors-and-Senior-Management-Personnel.pdf

e) CEO & CFO Certification

The Chief Executive Officer(CEO) and Chief Financial Officer (CFO) have certified to the Board in accordance with Regulation 17(8) read with Part B of Schedule II of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended March 31, 2025, which is annexed hereto as Annexure VII

f) Code for Prevention of Insider Trading Practices

The Company has formulated and adopted a Code for Prevention of Insider Trading Practices in accordance with the model code of conduct as prescribed under the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, as amended. The code lays down guidelines, which includes procedures to be followed and disclosures to be made while dealing in the shares of the Company. The code is applicable to the promoters, directors, senior designated employees and their dependents and the said persons are restricted from dealing in the securities of the Company during the 'restricted trading periods' notified by the Company, from time to time.

g) Code of Business Ethics (COBE)

The Company has adopted a Code of Business Ethics (COBE) which lays down the principles and standards that govern the activities of the Company and its employees to ensure and promote ethical behavior within the legal framework of the organization.

The Company is committed to provide a healthy environment to all the employees and thus does not tolerate any sexual harassment at workplace. The Company has a Policy on Prevention, Prohibition & Redressal of Sexual Harassment of Women at Workplace and an Internal Complaints Committee (ICC) has been constituted there under. The Policy's primary objective is to protect the women employees from sexual harassment at the place of work and also provides for punishment in case of false and malicious representations. All employees are covered under the policy. No complaints were received from any employee during the Financial Year 2024-25, and therefore, no complaints were outstanding for redressal as of March 31, 2025.

The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/wp-content/up- loads/2023/03/Star Anti-Sexual-Harrasment-Policy 1.0.pdf

h) Comprehensive Risk Management Policy

The Company is committed to manage its risk in a proactive manner and has adopted a structured and disciplined approach to risk management by developing and implementing risk management framework. With a view to manage its risk effectively your Company has in place a Comprehensive Risk Management Policy which covers a formalized Risk Management Structure, along with other aspects of risk management i.e. credit risk management, operational risk management, market risk management and enterprise risk management. The Risk Management Committee of the Board, on periodic basis, oversees the risk management systems, processes and minimization procedures of the Company.

i) Corporate Social Responsibility (CSR) Policy

The Company has Corporate Social Responsibility Policy (CSR Policy), as per the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, which, inter-alia, lays down the guidelines and mechanism for undertaking socially useful projects for welfare and sustainable development of the community at large. As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The Committee assists the Board in fulfilling its duty towards the community and society at large by identifying the activities and programmers that can be undertaken by the Company, in terms of the Company's CSR Policy. The composition of the CSR Committee and its terms of reference are given in the Corporate Governance Report forming part of this Annual Report.

The brief outline on CSR activities is mentioned in Notes to Financial Statements forming part of the Annual Report. The policy is available on the Company's website https://www.starhfl.com/wp-content/uploads/2024/09/CSR-Policy SHFI.pdf

j) Remuneration Policy

The Nomination and Remuneration Committee had laid down criteria for determining Director's Qualification, Attributes and Independence of a Director, remuneration of Directors, Key Managerial Personnel and other employees and criteria for evaluation of Directors, Chairperson, Non-Executive Directors and Board and the evaluation process of the same. In this respect the Company framed the Remuneration Policy in order to align with various provisions under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and RBI Circular DOR.GOV.REC.No. 29/18.10.002/2022-23 dated 29th April, 2022. The policy may be accessed on the Company's website at https://www.star- hfl.com/wp-content/uploads/2023/06/Remuneration-Policy.pdf

k) Related Party Transactions Policy

The Company has a Related Party Transaction Policy, intended to ensure requisite approval, reporting and disclosure of transactions between the Company and its related parties. The said policy also defines the materiality of related party transactions and lays down the procedures of dealing with related party transactions. During the year under review, the Related Party Transaction Policy was amended to align the same with the requirements of Companies (Amendment) Act, 2015 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/wp-con- tent/uploads/2023/02/2.-RPT-Policy SHFI.pdf

l) Familiarisation Programme for Independent Directors

The objective of a familiarisation programme is to ensure that the non-executive directors are updated on the business environment and overall operations of the Company. This enables the non-executive directors to make better informed decisions in the interest of the Company and its stakeholders. The policy is placed on the website of the Company and can be accessed at https://www.starhfl.com/disclosure-under-regulation-46-of-sebi-lodr-2015/

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company comprises of Seven [7] Directors of which one [1] is Executive Director; One [1] is Whole-time Director & Chief Executive Officer & Five [5] are Non - Executive Independent Directors including one woman Director as on March 31, 2025 who brings in a wide range of skills and experience to the Board.

? Retirement of Director by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and Articles of Association of the Company, Mr. Kalpesh Dave, Executive Director & CEO of the Company, who is liable to retire by rotation, has offered himself for re-appointment at the ensuing twentieth Annual General Meeting of the Company. A resolution for his re-appointment is being proposed at the twentieth Annual General Meeting and his profile is included in the AGM notice.

? Composition of the Board as on March 31, 2025

Based on the confirmations received, none of the Directors are disqualified from being appointed/re-appointed as a director in terms of Section 164 the Companies Act, 2013, a Certificate from M/s. D. M. Zaveri & Co. Practicing Company Secretaries regarding the Non-disqualification of Directors from being appointed/continue for the office of Director in your Company is placed as Annexure VI.

? Composition of the Key Managerial Personnel (KMP) as on March 31, 2025

? During the year following changes took place in the Board of Directors / KMP / Senior Managerial Personnel of Company:

? Following changes took place after the end of Financial Year End till the date of the report:

? Declaration from Independent Directors on Annual Basis:

The Company has received necessary declarations and disclosures from the Independent Directors under Section 149(7) and Section 184(1) of the Companies Act, 2013 stating that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and under Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") and disclosing their interest in form MBP-1.

Further, all Independent Directors of the Company have submitted declarations confirming that:

i. The disqualifications mentioned under sections 164, 167 and 169 of the Companies Act, 2013 do not apply to them.

ii. They have complied with the Code for Independent Directors prescribed in Schedule IV to the Act as applicable.

iii. They have registered themselves with Independent Directors' Database of The Indian Institute of Corporate Affairs (‘IICA') and have cleared the online proficiency test of IICA, as applicable.

iv. They are not aware of any circumstances or situations, 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; and

The Board of the Company has taken the disclosures and declarations on record after verifying the due veracity of the same. In the opinion of the Board, all the Independent Directors possess the integrity, expertise and experience including the proficiency required to be Independent Directors of the Company, fulfill the conditions of independence as specified in the Act and the SEBI Listing Regulations and are independent of the management and have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Act. The Directors and the senior management personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management Personnel.

FORMAL EVALUATION OF THE PERFORMANCE OF THE BOARD COMMITTEE OF THE BOARD AND INDIVIDUAL DIRECTOR:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 and Part D of Schedule II to the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as working of its Audit, Nomination and Remuneration, Stakeholders' Relationship and Corporate Social Responsibility Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specified duties, obligations and governance.

The exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company, etc.

MEETING OF INDEPENDENT DIRECTORS

Pursuant to Section 149(8) read with Schedule IV of the Act, and Regulation 25(3) of SEBI Listing Regulations, the Independent Directors shall hold at least two meeting in a financial year without the presence of Non- Independent Directors and members of the management. Accordingly, the Independent Directors of the Company met on February 14, 2025 and March 24, 2025 without the presence of Non-Independent Directors and members of the management to:

1. Review the performance of Non Independent Directors and the Board of Directors as a whole;

2. Review the performance of the Chairman and Managing Director of the Company and

3. Assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board. The details of the Independent Directors Meeting and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of this Report.

NUMBER OF THE MEETINGS OF THE BOARD

The Board met Seven (7) times during the year under review. The details of the number of meetings of the Board held during the Financial Year 2024-25 and the attendance therein forms part of the Report on Corporate Governance which forms part of the Annual Report.

The gap between any two consecutive meetings was less than one hundred and twenty days.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholders' Relationship Committee

d) Corporate Social Responsibility Committee

e) Risk Management Committee

The details of the required Committees of the Board along with their composition, number of meetings and attendance at the meetings are provided in the Report on Corporate Governance as required under Schedule V of the Listing Regulations.

SHAREHOLDER'S MEETING

During the financial year ended March 31, 2025, 1 (one) General Meeting was held. Further, details of the meetings are given in the Corporate Governance Report, which forms part of the Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS

In accordance with the provisions of Section 188 of the Act and rules made thereunder and considering the nature of the industry in which the Company operates, all the transactions entered with related parties are in the ordinary course of business and on an arm's length basis, the details with respect to the related party transactions are mentioned in the notes to the audited financial statements.

Pursuant to Regulation 23(4) of the SEBI Listing Regulations, 2015, all material related party transactions and subsequent material modification as defined in the policy on materiality of related party transaction shall require prior approval of the shareholders through resolution and no related party shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not.

Further, as per Regulation 23(1) of SEBI Listing Regulations, 2015, transaction with a related party shall be considered material, if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceeds rupees one thousand crore or ten per cent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity, whichever is lower.

Accordingly, during the financial year under review, the company has not entered into material contract, arrangement or transaction with related party, as defined under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Related Party Transaction Policy of the Company. The Related Party Transactions Policy and Procedures, as amended from time to time, as reviewed by the Audit Committee and approved by Board of Directors is uploaded on the website of the Company at https://www.starhfl.com/wp-content/up- loads/2023/02/2.-RPT-Policy SHFI.pdf

Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as "Annexure I" to this Report and forms a part of it.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company firmly believes that Corporate Social Responsibility (‘CSR') is more than an obligation and more than a duty, which helps to create positive impact on many lives. The Company persistently acts as a prudent corporate citizen and maintains harmonious relationship with the communities in which it operates to give back to the society.

As a part of its Corporate Social Responsibility (CSR) initiative, the Company has undertaken CSR projects and programs. These activities are in accordance with CSR activities as defined under the Act. The Company has a CSR Committee of Directors. Details about the Committee, CSR activities and the amount spent during the year, as required under section 135 of the Act and the related Rules and other details are given in the CSR Report as Annexure IX forming part of this Report.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has in place a Policy on Prevention Prohibition & Redressal of Sexual Harassment of Women at Workplace and has a robust mechanism to redress the complaints reported thereunder.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Pursuant to the provisions of Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the complaints received thereunder and the details relating thereto are as follows:

Further, as per Companies (Accounts) Second Amendment Rules, 2025, the law mandates for representing the following details:

Your Company, on a regular basis, sensitizes its employees on prevention of sexual harassment through various workshops, awareness programmes. It may be mentioned here that the Company has Zero tolerance towards any action on the part of any executive / staff which may fall under the ambit of ‘Sexual Harassment' at workplace, and is fully committed to uphold and maintain the dignity of every women working in the Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATOR OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS & COMPANY'S OPERATIONS IN FUTURE

During the year, there has been no such significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

CHANGE IN NATURE OF BUSINESS

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

MAINTENANCE OF COST RECORDS

The Company being a Housing Finance Company is not required to maintain cost records as prescribed under section 148(1) of the Companies Act, 2013.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable secretarial standards issued by the Institute of Company Secretaries of India.

1. Statutory Auditors

M/s. Nyati Mundra & Co., Chartered Accountants (Firm Registration No. 008153C) were appointed as Statutory Auditors of the Company for a period of 5 (five) consecutive years, at the Annual General Meeting of Members held on September 29, 2021 on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors. They have confirmed their eligibility and qualifications required under the Act for holding office as Statutory Auditors of the Company.

The Statutory Auditor's Report forms part of the Annual Report. There is no audit qualification, reservation or adverse remark for the year under review. There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/ or Board under Section 143(12) of Act and Rules framed thereunder.

The Statutory Auditors have also submitted a separate Auditor's Report on Regulatory compliance to the Board to comply with the requirement under chapter XII of the Master Directions. The copy of the Auditor Report is annexed herewith.

The Notes on financial statements referred to in the Auditor's Report are self-explanatory and do not call for any further comments.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and pursuant to Regulation 24A of Securities Exchange Board of India (Listing Obligation & Disclosure Requirement) (Amendments) Regulations, 2018, the Board of Directors of the Company appointed M/s D.M. Zaveri & Co., Practicing Company Secretaries, Mumbai, a Peer Reviewed Firm, to undertake the Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report & Annual Secretarial Compliance Report for the financial year ended March 31, 2025, is annexed as "Annexure II" and "Annexure III" forms an integral part of this Report.

Further, pursuant to the amendment of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with effect from 13 December 2024, the Board of Directors have approved and recommended the appointment of M/s. D.M. Zaveri & Co., as a Secretarial Auditor of the Company for a term of 5 (Five) consecutive years to conduct Secretarial Audit of the Company and to furnish the Secretarial Audit Report for the period commencing from FY 2025-26 till FY 2029-2030, for approval of the Members at ensuing AGM of the Company.

Brief resume and other details are separately disclosed in the Notice of the AGM. M/s. D.M. Zaveri & Co have given their consent to act as a Secretarial Auditor of the Company and confirmed that their aforesaid appointment, if made, would be within the prescribed limits under the Act & Rules made thereunder and SEBI Listing Regulations. They have also confirmed that firm is not disqualified to be appointed as a Secretarial Auditor in terms of provisions of the Act & Rules made thereunder and SEBI Listing Regulations.

The said report, does not contain any qualification, reservation or adverse remark, and thus do not call for any further comments.

3. Internal auditor

Your Company has adequate internal control procedures commensurate with its size and nature of business. Your Company has clearly laid down policies, guidelines, and procedures that form a part of the internal control systems. The adequacy of the internal control systems encompasses the Company's business processes and financial reporting systems and is examined by the management as well as by its internal auditors at regular intervals.

The internal auditors conduct audits at regular intervals to identify the weaknesses and suggest improvements for better functioning. The observations and recommendations of the internal auditors are discussed by the Audit Committee to ensure timely and corrective action.

Your Company has appointed M/s. KVU & Associates, Chartered Accountants as an Internal Auditor of the Company, who reports to the Audit Committee and to the Board of Directors of the Company. The Internal Auditor conducts comprehensive audit of functional areas and operations of the Company to examine the adequacy of and compliance with policies, procedures, statutory and regulatory requirements. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations.

The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism. The function also proactively recommends improvement in policies and processes, suggests streamlining of controls against various risks.

Your Company has laid down set of standards, processes and structure, which enables it to implement internal financial control across the Company and ensure that the same are adequate and operating effectively.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee under Section 143(12) of the Act any instance of fraud committed against the Company by its officers or employees.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Act, for the financial year ended on March 31, 2025, the Directors hereby confirm that:

? In the preparation of the annual financial statements for the year ended March 31, 2025, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;

? The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and of the profit of the Company for the year ended on that date;

? The Directors 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;

? The Directors have prepared the annual accounts on a going concern basis;

? The Directors have laid down adequate internal financial controls to be followed by the Company and that the financial controls were adequate and were operating effectively;

? The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.

COMPLIANCE WITH MATERNITY BENEFIT

The Company has complied with the provisions of the Maternity Benefit Act, 1961 during the financial year under review. All eligible women employees were extended the benefits as prescribed under the Act, including paid maternity leave, nursing breaks, and creche facility (where applicable). The Company remains committed to ensuring a safe, inclusive and supportive work environment for all its employees.

REPORT ON CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Chapter IX (Corporate Governance) of Master Directions Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 and the Companies Act, 2013 and Rules thereto, as amended from time to time.

Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, RBI Directions and disclosures as required under the Companies Act, 2013 and the Rules thereto, a separate Section titled ‘Report on Corporate Governance' forms part of this Annual Report as Annexure IV.

The certificate issued by Mr. M/s. D.M. Zaveri & Co. confirming compliance with the conditions of Corporate Governance as stipulated in the SEBI (LODR) Regulations, 2015 & forms part of this report as Annexure V.

The said certificate for financial year 2024-25 does not contain any qualification, reservation or adverse remarks.

In terms of Section 136 of The Companies Act, 2013, the reports and accounts are being sent to the members and others entitled thereto.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management's Discussion and Analysis Report, for the year under review, is presented as separate section forming part of this Annual Report.

ANNUAL RETURN

Pursuant to section 92(3) read with Section 134(3)(a) of the Act, the Annual Return is available on the Company's website and can be accessed under the annual return tab at https://www.starhfl.com/disclosure-under-regula- tion-46-of-sebi-lodr-2015/

ENHANCING SHAREHOLDERS WEALTH

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

OUTLOOK

? Focus on growth of Individual home loans segment.

? Making online loan application more effective and enhance its contribution towards the incremental business.

? Strengthening marketing offices opened during the last 3 years and making them high growth centers.

? To grow business qualitatively by consolidating position and strengthening the competitiveness on service delivery. ? Understanding the inherent risks to the business and managing it effectively.

? Widespread market studies assisting modelling of loan products to suit customer needs.

? Making use of information provided by marketing offices about ground market conditions.

INSOLVENCY AND BANKRUPTCY

The Company has not made any application or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the Financial Year and hence not being commented upon.

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.

During the Financial Year under review, there has been no incident of one time settlement for loan taken from the banks of financial institutions and hence not being commented upon.

ACKNOWLEDGEMENTS

Your Board of Directors take this opportunity to express their appreciation to all stakeholders of the Company including the Reserve Bank of India, National Housing Bank, the Ministry of Corporate Affairs, Securities and Exchange Board of India, the Government of India, Stock Exchanges and other Regulatory Authorities, Bankers, Lenders, Financial Institutions, Members, Credit Rating agencies, Customers of the Company for their continued support and trust. Your directors would like to express deep appreciation for the commitment shown by the employees in supporting the Company in achieving continued robust performance on all fronts.

In closing, we would like to thank all the investors as well as the communities we operate in who have reposed their trust in us and supported us in our journey.