Your directors present the 18^th Annual Report along with the financial statements for Financial Year
2025-26 (or 'FY2026).

Company Overview

Bajaj Housing Finance Limited ('BHFL' or 'the Company) is registered with National Housing Bank ('NHB) as a
non-deposit taking Housing Finance Company ('HFC) engaged in the business of mortgage lending since July
2017. The Company is a subsidiary of Bajaj Finance Limited ('BFL'/'Holding Company).

The Company offers financial solutions tailored to individuals and corporate entities for the purchase and
renovation of homes and commercial spaces. The Company's mortgage product suite is comprehensive and
comprises () home loans; (ii) loans against property; (ii) lease rental discounting; (iv) developer financing and
(v) others, covering non-collateralized loans. The financial products offered by the Company caters to every
customer segment, from individual homebuyers to large-scale developers/HNIs.

BHFL is also a registered intermediary within the meaning of Insurance Regulatory and Development Authority
of India ('IRDAI) as a corporate agent.

The Company is classified as an Upper Layer NBFC by the Reserve Bank of India ('RBI). The Company's
equity shares got listed on National Stock Exchange of India Limited ('NSE) and BSE Limited ('BSE) on
16 September 2024.

Financial results

The key highlights of the financial results for FY2026 are given below:

By virtue of rounding off, numbers presented in above table may not add up precisely to the totals provided.

Working results of the Company

• Asset Under Management ('AUM') as on 31 March 2026 was H 1,40,706 crore as compared to H 1,14,684
crore as on 31 March 2025, representing an increase of 23% over the previous year.

• Loan receivables as on 31 March 2026 was H 1,23,745 crore as compared to H 99,513 crore as on
31 March 2025, an increase of 24% over the previous year.

• Total income during FY2026 increased to H 11,151 crore from H 9,554 crore during FY2025 registering a
growth of 17% over the previous year.

• Operating cost to net total income in FY2026 decreased by 120 basis points to 19.7% from 20.9% in FY2025.

• Impairment on financial instruments was H 191 crore. The Company holds macro-economic overlay of
H 29 crore as at 31 March 2026.

• The Company ended FY2026 with a Gross NPA of 0.27% and Net NPA of 0.11% as against 0.29% and 0.11%
for FY2025.

• Profit before tax for FY2026 was H 3,320 crore as against H 2,770 crore for FY2025, an increase of 20% over
the previous year. This is mainly due to the Company's healthy net interest margin, operating efficiencies and
prudent risk management.

• The profit after tax for FY2026 was H 2,560 crore as compared to H 2,163 crore for FY2025, an increase of
18% over the previous year.

Transfer to Reserve Fund

Under Section 29C of the National Housing Bank Act, 1987, Housing Finance Companies ('HFCs') are required
to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any
dividend. Accordingly, the Company has transferred a sum of H 512.07 crore to reserve fund, being 20% of its
net profit.

Pursuant to Section 71 of Companies Act, 2013 (the 'Act') read with Rule 18 of the Companies (share capital
and debentures) Rules, 2014, the Company, being an HFC, is exempt from creating a debenture redemption
reserve in respect of privately placed debentures including the requirement to invest up to 15% of the amount
of debentures maturing during the next financial year. However, the Company maintains sufficient liquidity
buffer to fulfil its obligations arising out of debentures. In case of secured debentures, an asset cover of at least
100% is maintained at all times.

Minimum Public Shareholding

• The promoter of the Company i.e., Bajaj Finance Limited on 2 December 2025 sold 16.66 crore equity shares
of the Company representing ~2% of its equity share capital through open market mechanism by executing

a bulk deal in a secondary market, which is one of the methods provided under the SEBI Master Circular for
achieving Minimum Public Shareholding. Accordingly, the promoter holding stand reduced from 88.70% to
86.70%.

• SEBI vide Securities Contracts (Regulation) Amendment Rules, 2026 dated 13 March 2026 has extended the
timeline for complying with the Minimum Public Shareholding by revising the market capitalization thresholds
at the offer price. The Company has now an additional timeline of 2 years for complying with the Minimum
Public Shareholding i.e., till 15 September 2029.

Share capital

During FY2026, the Company issued and allotted 41,87,918 equity shares of the face value of H 10/- each at
grant price of H 54.5/- per equity share (including a share premium of H 44.5/- per equity share) to the Bajaj
Housing Finance ESOP Trust under the Bajaj Housing Finance Limited Employee Stock Option Scheme, 2024.

Pursuant to the aforesaid allotment of equity shares, the issued, subscribed and paid-up capital of the
Company stands increased to H 8,332.33 crore (833,23,34,619 Equity shares of H 10/- each).

During FY2026, the Company has not issued any convertible securities and there are no outstanding
convertible securities as on 31 March 2026.

Borrowings

The shareholders have approved an overall borrowing limit of H 1,50,000 crore. The outstanding borrowings as
on 31 March 2026 were H 1,03,703.99 crore as compared to H 82,071.92 crore as on 31 March 2025.

During FY2026, the Company raised fresh borrowings aggregating to a face value of H 49,767.24 crore
(excluding CC/WCDL/TREPS) from various sources, including refinance from the National Housing Bank
('NHB'). The composition of the overall borrowings as on 31 March 2026 is set out below:

As per the Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management)

Directions, 2025, as amended from time to time, the Company is required to maintain a minimum Liquidity
Coverage Ratio ('LCR') of 100%. The Company's average daily LCR during Q4 stood at 146.10%, and the LCR as
on 31 March 2026 was 152.52%.

Dividend

Pursuant to the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the 'SEBI Listing Regulations') and in accordance with the
RBI guidelines, the Company has in place a dividend distribution policy, which sets out the parameters and
circumstances to be considered by the Board of Directors ('Board') in determining the distribution of dividend
to its shareholders and/or retaining profit earned.

Further, during FY2026, the Company revised its Dividend Distribution Policy to incorporate a clause providing
for the exclusion of any exceptional or extraordinary income, as well as any portion of net profit affected by
statutory auditors' qualifications, while computing the dividend payout ratio.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Dividend-Distribution-Policy.pdf.

Considering the capital-intensive nature of the business, the business growth plan of the Company and with a
view to plough back profits, your Board has not recommended any dividend for consideration of its members at
the ensuing Annual General Meeting to build a strong base for long-term sustainable growth.

Annual Return

The Annual Return as provided under Section 92(3) of the Act, in the prescribed form is available on the
website of the Company and can be accessed athttps://www.bajajhousingfinance.in/annual-reports.

Number of Meetings of the Board

Six (6) meetings of the Board were held during FY2026. Details of the meetings and attendance thereat forms
part of the Report on Corporate Governance. The gap between two consecutive meetings was less than one
hundred and twenty days.

Declaration by Independent Directors

All the Independent Directors have submitted a declaration of independence, stating that they meet the
criteria of independence provided under Section 149(6) of the Act read with Regulation 16 of the SEBI
Listing Regulations, as amended. They also confirmed compliance with the provisions of Rule 6 of Companies
(Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in
the databank of Independent Directors.

The Board took on record the declaration and confirmation submitted by the Independent Directors regarding
them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the
same in terms of the requirements of Regulation 25 of the SEBI Listing Regulations.

In the opinion of the Board, the Independent Directors fulfil the conditions specified in the Act read with rules
made thereunder and have complied with the code for Independent Directors prescribed in Schedule IV to
the Act.

Meeting of Independent Directors

Pursuant to Act and SEBI Listing Regulations, the Independent Directors must hold at least one meeting in a
financial year without attendance of Non-Independent Directors and members of the Management. Accordingly,
Independent Directors of the Company met on 17 March 2026 and:

• noted the report of performance evaluation of the Board and Committees for the year 2025-26;

• reviewed the performance of Non-Independent Directors and the Board as a whole;

• reviewed the performance of the Chairman of the Board taking into account the views of executive and
non-executive directors; and

• assessed the quality, quantity and timeliness of flow of information between the Company's Management
and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Suggestions of the Independent Directors were noted by the Board.

In addition, the Independent Directors have a separate meeting with the Senior Management Team ('SMTs'),
during which, the SMTs are encouraged to express their views and concerns pertaining to the business.
Suggestions from the directors were noted by the Management.

Directors and Key Managerial Personnel ('KMP')

A. Change in Directors:

i. Re-appointment of Anami N Roy (DIN: 01361110)

The Members vide special resolutions passed through postal ballot on 7 May 2025, approved the
continuation of Anami N Roy as an Independent Director beyond the age of 75 years for his first tenure.
They have also approved his re-appointment as an Independent Director for a second term of three
consecutive years, commencing from 19 May 2025. The Board is of the opinion that Anami N Roy is a
person of integrity, expertise, and competent experience and proficiency to serve the Company as an
Independent Director.

ii. Appointment of Ajay Kumar Choudhary (DIN: 09498080)

On recommendation of the Nomination and Remuneration Committee ('NRC'), the Board has appointed
Ajay Kumar Choudhary as a Non-Executive Independent Director of the Company for a term of five
consecutive years effective 1 March 2026. Members through special resolution passed by postal ballot
on 11 April 2026, approved the appointment of Ajay Kumar Choudhary as a Non-Executive Independent
Director for a term of five consecutive years effective 1 March 2026.

The Board is of the opinion that Ajay Kumar Choudhary is a person of integrity and possesses relevant
expertise & experience and proficiency to serve the Company as an Independent Director that can
strengthen the overall composition of the Board.

Pursuant to the provisions of Rule 6(4) (c) of the Companies (Appointment and Qualifications of Directors)
Rules, 2014, as amended, Ajay Kumar Choudhary is exempted from completion of online proficiency
self-assessment test.

B. Directors liable for rotation:

Rajeev Jain, (DIN: 01550158) retires by rotation at the ensuing Annual General Meeting ('AGM'), and being
eligible, offers himself for re-appointment.

Brief details of Rajeev Jain are given in the Notice of 18^th AGM.

C. Key Managerial Personnel (KMP):

During FY2026, there was no change in the KMP.

Remuneration Policies

A. Policy on Directors' Appointment and Remuneration

Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule
II of the SEBI Listing Regulations, the Board has framed a Remuneration Policy. This policy, inter alia,
lays down:

a) The criteria for determining qualifications, positive attributes and independence of directors; and

b) Broad guidelines of compensation philosophy and structure for Non-Executive Directors, key
managerial personnel and other employees.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Remuneration-Policy.pdf.

During FY2026, there were no pecuniary relationship/transactions of any of the Non-Executive Directors
with the Company apart from sitting fees and commission, payable to them as directors.

Hitherto, the Company has not paid any commission and sitting fees to its Independent Directors for
attending separate meeting of Independent Directors. Considering the value addition from these meetings
to Management and the Board as a whole, the Board has approved the payment of sitting fees of
H 1,00,000 and commission of H 2,00,000 per meeting, for separate meetings of Independent Directors.

B. Policy for Compensation of Key Managerial Personnel ('KMP') and Senior Management Team
('SMT') pursuant to the RBI Guidelines

Pursuant to Reserve Bank of India (Non-Banking Financial Companies - Governance) Directions dated
28 November 2025, issued in supersession of RBI guidelines on Compensation of Key Managerial Personnel
and Senior Management in NBFCs dated 29 April 2022, the Company has in place a Board approved policy
exclusively governing compensation payable to KMP and SMT. This policy lays down detailed framework,
inter alia, encompassing the following:

• Principles of compensation;

• Compensation components;

• Principles of variable pay;

• Deferral of variable pay;

• Compensation for control and assurance function personnel; and

• Provisions for malus and clawback and circumstances under which application of malus and clawback is
to be considered.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Remuneration-Policy-RBI.pdf.

Particulars of Loans, Guarantees and 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. Accordingly, the Company is exempted from complying with the requirements to
disclose in the financial statement the full particulars of the loans given, investment made, guarantee given, or
security provided.

Related Party Transactions

All contracts/arrangement/transactions entered by the Company during FY2026 with related parties
were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Approval of the
Audit Committee was obtained for all related party transactions entered during FY2026 as per SEBI Listing
Regulations. Such transactions are reviewed by the Audit Committee on a quarterly basis.

The Company had engaged an independent law firm to review the transactions carried out with related parties
during FY2026, to affirm that the transactions were entered into on an arm's length basis. The said firm, based
on its review performed every quarter, has concluded that the aforementioned transactions were entered into
on an arm's length basis.

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.

Approval of shareholders was obtained at the last AGM held on 23 July 2025 for transactions with Bajaj Finance
Limited (Holding Company) for an aggregate amount of H 12,612 crore for the period from the date of 17^th AGM
up to the date of 18^th AGM of the Company.

A transaction with a related party is considered material, if the transaction(s) to be entered into individually
or taken together with previous transactions during a financial year, exceeds the thresholds as per Regulation
23(1) of SEBI Listing Regulations, 2015. With effect from 19 December 2025, SEBI has revised the criteria for
determination of material related party transactions. Accordingly, a transaction with a related party shall be
considered material if the transaction(s), individually or taken together with previous transactions during a
financial year, exceeds the thresholds specified in Schedule XII of the said Regulations.

Details of transactions with related parties during FY2026 are provided in the notes to the financial statements.
Also, details of transactions with related parties during FY2026 as reported to the stock exchanges in
the prescribed format is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/financial-information.

Accordingly, the Company proposes to seek approval of the shareholders at the upcoming AGM for material
related party transaction with Bajaj Finance Limited, as under:

Material Related Party Transactions with Bajaj Finance Limited

Further details are provided in the Notice of the 18^th AGM.

There were no contracts or arrangements entered under Section 188(1) of the Act. Accordingly, the disclosure
of Related Party Transactions as required under Section 134(3) (h) of the Act in Form AOC-2 is not applicable to
the Company for FY2026 and hence, does not form part of this Report.

Material Changes and Commitments

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

Conservation of Energy

Though the operations of the Company are not energy intensive, the Company implements various energy
conservation measures across all its functions, vertical and value chain partners. Key initiatives of the Company
include the following:

• Energy-efficient LED lights are installed across all offices;

• Selecting and designing offices to facilitate maximum natural light utilization;

• Use of cloud based virtual servers to increase energy efficiency and data security; and

• The Company has adopted strategy to minimize usage of non-production workload during night hours which
helps in cost optimization and reduce greenhouse effect.

Technology Absorption

The Company leverages technology across its acquisition and servicing lifecycle. It hosted its enterprise
IT ecosystem on cloud, enabling a flexible architecture for business applications, data warehousing, and
analytics. This cloud-native foundation supports improved performance, scalability, cost efficiency, and
security. The Company has also enhanced its web-based application stack to ensure compatibility across
devices, enabling mobility, and has implemented API gateways to facilitate seamless integration.

The Company continues to adopt Artificial Intelligence ('AI) to strengthen customer service and other areas
with potential of significant impact. BHFL is further reinforcing its information security posture through
expanded attack-surface monitoring, process refinement, and proactive remediation of identified gaps. Security
solutions and controls-including VAPT, cloud architecture reviews, managed endpoint detection & response
('MDR'), and PII data masking-have been implemented to enhance security and strengthen customer data
protection. The Company has also improved productivity in business operations and customer service by
leveraging robotic process automation ('RPA') and AI along with machine learning ('ML).

Foreign Exchange Earnings and Outgo

During FY2026, the Company did not have any foreign exchange earnings in terms of actual inflow and the
foreign exchange outgo in terms of actual outflow amounted to H 0.31 crore.

Composition of Committees

The details of all the Board Committees including composition, attendance, terms of reference, etc, are provided
under Report on Corporate Governance. Pursuant to Section 177 and Section 135 of Companies Act, 2013, the
composition of Audit Committee and Corporate Social Responsibility committee are provided hereunder:

Audit Committee

The composition as on 31 March 2026, comprises of Anami N Roy (Chairman) (DIN: 01361110), Dr. Arindam
Bhattacharya (DIN: 01570746), Jasmine Chaney (DIN: 07082359), S M N Swamy (DIN: 10367727) and Rajeev
Jain (DIN: 01550158).

Further details on Audit Committee, brief terms of reference and attendance record of members are given in
the Report on Corporate Governance.

During FY2026, all recommendations of the Audit Committee were accepted by the Board.

Corporate Social Responsibility ('CSR')

The composition as on 31 March 2026, comprises of Anami N Roy (Chairman) (DIN: 01361110), Sanjiv Bajaj
(DIN: 00014615) and Rajeev Jain (DIN: 01550158).

The CSR policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/CSR-Policy.pdf.

Pursuant to Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual Report on
CSR activities is annexed to this Report.

Further, the Company has met the CSR obligation, and no CSR amount remains unspent for FY2026.

Risk Management Framework

The Board of Directors have adopted a Risk Management Policy for the Company which provides for
identification of key events/risks impacting the business objectives of the Company and attempts to develop
risk policies and strategies to ensure timely evaluation, reporting and monitoring of key business risks.

This framework, inter alia, provides the set of components that provide the foundations and organisational
arrangements for designing, implementing, monitoring, reviewing and continually improving Risk Management
throughout the organisation. It covers principles of risk management, risk governance with roles and
responsibilities, business control measures, principle risks and business continuity plan. The Management
identifies and controls risks through a defined framework in terms of the aforesaid policy.

The Company has in place Operational Risk Management ('ORM) framework which enables systematic
identification, assessment, measurement, monitoring, mitigation and reporting of operational risks. This is
achieved through determining key process areas, converting them to measurable and quantifiable metrics
(KRI's), setting thresholds for KRI's, monitoring and reporting on breaches of the threshold levels. Corrective
actions are initiated, to bring back the breached metrics within their acceptable thresholds by conducting the
root cause analysis to identify the failure of underlying process, people, systems, or external events, if any. It
also establishes governance mechanisms, defined roles and responsibilities, and risk monitoring tools to support
effective oversight. A management level Operational Risk Management Committee ('ORMC) has also been put
in place to oversee implementation of the ORM framework.

The Board is of the opinion that there are no elements of risk that may threaten the existence of the Company.

As per the Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management) Directions,
2025, all non- deposit taking HFCs with asset size of more than H 100 crore shall pursue liquidity risk
management which, inter alia, should cover adherence to gap limits. The Board has in place a Liquidity Risk
Management framework encompassing, inter alia, strategies and practices, internal controls, maturity profiling,
liquidity coverage ratios and high-quality liquid assets.

Pursuant to the Reserve Bank of India (Housing Finance Companies) Directions, 2025, HFCs shall comply
with the directions for Internal Capital Adequacy Assessment Process ('ICAAP') as prescribed in paragraph
54 of the Reserve Bank of India (Non-Banking Financial Companies - Prudential Norms on Capital Adequacy)
Directions, 2025.

The Company has an ICAAP policy in place. The policy is developed considering the requirements as per the
RBI Directions and is based on the Pillar -2 requirements under Basel III Framework developed by the Basel
Committee on Banking Supervision ('BCBS). Accordingly, the Company has also framed ICAAP with an
objective to ensure availability of adequate capital to support all risks in business as also to develop and use
better internal risk management techniques for monitoring and managing risks.

The objective of the policy is to provide an ongoing assessment of the Company's entire spectrum of risks and
the methodology to assess current and future capital, reckoning other mitigating factors and to assist and
apprise the Board on these aspects and on Company's ICAAP and Company's approach to capital management.

In terms of the RBI Directions, the Committee also has an independent meeting with the Chief Risk Officer
without the presence of management.

Further details on the Risk Management Committee, brief terms of reference and attendance record of
members are given in the Report on Corporate Governance.

More detailed discussion on the Company's risk management and portfolio quality is covered in the
Management Discussion and Analysis.

Fraud monitoring and reporting

The Reserve Bank of India vide Master Directions on Fraud Risk Management in Non-Banking Financial
Companies ('NBFCs) (including Housing Finance Companies) dated 15 July 2024 issued directions on
fraud risk management. Pursuant to the RBI Directions, the Company has adopted comprehensive Fraud Risk
Management Policy covering aspects viz, measure towards fraud prevention, fraud detection, investigation,
staff accountability, monitoring of frauds, recovery of frauds, reporting of frauds and roles & responsibilities of
Board/Board Committees and Senior Management.

Further, a Special Committee of the Board is formed for Monitoring and Follow-up of cases of Frauds ('SCBMF')
to oversee the effectiveness of fraud risk management. The SCBMF committee reviews and monitor cases of
frauds, including root cause analysis, and suggests mitigating measures for strengthening the internal controls,
risk management framework and minimizing the incidence of frauds.

The Company also has in place a senior management Early Warning Signal Committee for review and
implementation of a robust framework for Early Warning Signal. During the year under review, no instances of
fraud have been committed against the Company by officers or employees.

The Company has a comprehensive Risk Containment Unit infrastructure. The risk containment unit, through
prevention and deterrence actions, is responsible for preventing fraud perpetrated by customers, sourcing
channels and employees either alone or in connivance with others. It ensures that most fraud checks
are performed well before any disbursal of loan through fraud controls/checks built in its loan origination
systems & processes.

Formal annual evaluation of the performance of the Board, its Committees and Directors

Pursuant to Section 178 of the Act, the NRC and the Board have decided that the evaluation shall be carried out
only by the Board and the NRC will only review its implementation and compliance.

Further as per Schedule IV of the Act and provisions of the SEBI Listing Regulations, the performance
evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director
being evaluated, based on performance and fulfillment of criteria of independence and their independence
from management.

Based on the report of the performance evaluation, it shall be determined whether to extend or continue the
term of appointment of Independent Director.

Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its
Committees, Chairperson and Individual Directors.

The manner in which formal annual evaluation of performance was carried out by the Board for the year
2025-26 is given below:

• Based on the criteria approved by the Board, a questionnaire-cum-rating sheet was circulated for seeking
feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and
individual directors.

• From the individual ratings received from the directors, a report on summary of ratings in respect of
performance evaluation of the Board, its Committees, Chairperson and individual directors for the year
2025-26 and a consolidated report thereof arrived at.

• The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on
17 March 2026.

• The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting
held on 17 March 2026.

• Based on the report and evaluation, the NRC and Board at their above-mentioned meetings, determined that
the appointment of all Independent Directors may continue.

• Details on the evaluation of Board, Non-Independent Directors and Chairperson of the Company, carried
out by the Independent Directors at their separate meeting held on 17 March 2026 have been furnished in a
separate paragraph elsewhere in this report.

• During the year under review, the process followed by the Company was reviewed by the NRC, which opined
these to be in compliance with the applicable provisions and found it to be satisfactory.

• The evaluation criteria for Independent Directors as required under Chapter VI - D of the SEBI Master Circular
dated 30 January 2026 is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Performance-Evaluation-Criteria.pdf.

Other than the Chairman of the Board and NRC, no other Director has access to the individual ratings given
by directors.

Subsidiaries, Associates and Joint Ventures

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.

The Company's policy for determination of material subsidiary, as adopted by the Board of Directors, in
conformity with Regulation 16 of the SEBI Listing Regulations, is available on the website of the Company and
can be accessed athttps://www.bajajhousingfinance.in/Policy-for-determining-material-subsidiaries.pdf.

As per Regulation 16(1) (c) of SEBI Listing Regulations, a Company, whose turnover or net worth exceeds
ten percent of the consolidated turnover or net worth respectively, of its holding Company in the immediately
preceding accounting year, is deemed to be its material subsidiary.

For FY2026, the Company continues to be classified as material subsidiary of Bajaj Finance Limited ('BFL'), the
Holding Company, and Bajaj Finserv Limited ('BFS'), the ultimate Holding Company.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During FY2026, there were no significant and material orders passed by the regulators or courts or tribunals
impacting the going concern status and Company's operations in future.

Internal Financial Controls

Internal Financial Controls laid down by the Company is a systematic set of controls and procedures to ensure
orderly and efficient conduct of its business including adherence to the Company's policies, safeguarding of its
assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records
and timely preparation of reliable financial information. Internal financial controls not only require the system to
be designed effectively but also to be tested for operating effectiveness periodically.

The Audit Committee and Board is of the opinion that internal financial controls with reference to the financial
statements are adequate and operating effectively. The internal financial controls are commensurate with the
size, scale, and complexity of operations.

Internal Control Systems and their adequacy have been discussed in more detail in Management Discussion
and Analysis.

Whistle-Blower Policy/ Vigil Mechanism

The Company has a Whistle-blower Policy encompassing vigil mechanism pursuant to the requirements of the
Section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations and Regulation 9A of the SEBI
(Prohibition of Insider Trading) Regulations, 2015.

The whistle-blower framework has been introduced with an aim to provide employees, directors and value
chain partners with a safe and confidential channel to share their input about such aspects which are
adversely impacting their work environment. The policy/vigil mechanism also enables directors, employees
and value chain partners to report their concerns about unethical behaviour, actual or suspected fraud or
violation of the Company's code of conduct or ethics policy and leak or suspected leak of unpublished price
sensitive information.

The concerns may be reported anonymously either through e-mail or through a 'Confidential Feedback
Mechanism', which is reviewed by a Whistle-Blower Committee comprising of senior management from within
and outside the organisation. Pursuant to the Whistle-Blower Policy, the summary of incidents investigated,
actioned upon, founded and unfounded are reviewed by the Audit Committee on a quarterly basis. In addition,
the Committee conducts an annual review of the effectiveness and functioning of the vigil mechanism/
Whistle-Blower Policy. The Policy provides safeguards against victimization of directors, employees and value
chain partners who utilize the mechanism and enables direct access to the Chairperson of the Audit Committee
by writing tobhflacchairperson@bajajhousing.co.in.

The aforesaid policy is available on the website of the Company and can be accessed athttps://www.
bajajhousingfinance.in/Vigil-Mechanism-Policy.pdf.

Employees of the Company are required to undergo mandatory online learning module on code of conduct
which includes whistle-blower policy and affirm that they have understood and are aware of vital aspects
of the Policy.

During FY2026, no person was denied access to the Audit Committee or its Chairperson under this policy
and two complaints were received under the whistleblower mechanism of the Company which have been
investigated and addressed as per the policy of the Company.

Employee Stock Options ('ESOPs')

With a view to maintain a right balance between fixed pay, short-term incentives and long-term incentives and
to effectively align with the risk considerations and build focus on consistent long-term results, the Company
has formulated an Employee Stock Option Scheme in accordance with the Securities and Exchange Board of
India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ('SEBI SBEB Regulations').

Bajaj Housing Finance Limited Employee Stock Option Scheme, 2024 is in compliance with the SEBI SBEB
Regulations and there were no changes in the scheme during the year. The same is available on the website
of the Company and can be accessed athttps://www.bajajhousingfinance.in/Employee-Stock-Option-
Scheme-2024.pdf. No acquisition has been undertaken by the trust through the secondary market route.

The Company follows an annual appraisal process of its employees. Various factors such as past year's
performance, grade of the employee, length of service, role and overall contribution, the performance of
business/function to which the employee belongs, merits of the employee, future potential contribution by
the employee and/or such other similar factors would be considered by the Compensation Committee while
approving the grant of options.

A certificate obtained from the Secretarial Auditors confirming that the scheme has been implemented in
accordance with the aforesaid regulations and the shareholders' resolution shall be placed before the Members
at the ensuing Annual General Meeting.

A statement giving details as at 31 March 2026, under Regulation 14 of the SEBI SBEB Regulations, and Rule
12(9) of Companies (Share Capital and Debentures) Rules, 2014 are available on the website of the Company
and can be accessed athttps://www.bajajhousingfinance.in/annual-reports.

Grant wise details of options vested, exercised, and cancelled are provided in the notes to the financial
statements. The Company has not issued any sweat equity shares or equity shares with differential voting
rights during FY2026.

Business Responsibility and Sustainability Report ('BRSR')

Pursuant to the SEBI circular dated 10 May 2021 read with the SEBI Listing Regulations, as amended from time
to time, top 1,000 listed entities based on market capitalization are required to submit Business Responsibility
and Sustainability report with effect from FY2023.

SEBI has further introduced BRSR Core, a focused sub-set of the BRSR, comprising Key Performance Indicators
('KPIs') across nine Environmental, Social, and Governance ('ESG') attributes. As per the glide path outlined
in the circular, the top 500 listed entities are mandated to obtain reasonable assurance on the BRSR Core
disclosures. In compliance with the SEBI requirements, the Company has appointed SGS India Private Limited.
('SGS') as an Assurance provider for carrying out the Reasonable Assurance for BRSR Core and Limited
Assurance for the remaining BRSR disclosures, in alignment with the SEBI's requirements, for FY2026.

The Company has in place an executive level cross functional ESG Committee headed by the Managing
Director. The Committee chalks out plans and other initiatives, keeping in view the leading practices and the
requirements. It also monitors the implementation of ESG related initiatives and reporting thereof. The BRSR
in the updated format (including KPIs of BRSR Core) prescribed by the SEBI is annexed to the Annual Report.

A detailed ESG Report describing various initiatives, actions, and process of the Company towards the ESG
endeavor is available on the website of the Company and can be accessed athttps://www.bajajhousingfinance.
in/annual-reports.

Corporate Governance

In terms of the SEBI Listing Regulations, a separate section titled Report on Corporate Governance has
been included in this Annual Report, along with the Management Discussion and Analysis and General
Shareholder Information.

The Managing Director and the Chief Financial Officer have certified the Board in relation to the financial
statements and other matters as specified in the SEBI Listing Regulations.

A certificate from Secretarial auditor of the Company regarding compliance of conditions of corporate
governance is annexed to this Report and it does not have any observations.

Secretarial Standards of ICSI

The Company has followed the applicable Secretarial Standards with respect to meetings of the Board of
Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

Statutory Audit

Mukund M. Chitale & Co., Chartered Accountants (Firm Registration No. 106655W) and Singhi & Co., Chartered
Accountants (Firm Registration No. 302049E), the Joint Statutory Auditors of the Company have conducted
audit of the financial statements of the Company for the FY2026.

The Audit Report given by the Joint Statutory Auditors for FY2026 is unmodified, i.e., it does not contain any
qualification, reservation, adverse remark or disclaimer.

The statutory auditors have not reported any matter under Section 143(12) of the Act, and therefore, no details
are required to be disclosed under Section 134(3) (ca) of the Act.

In terms of the RBI Directions, the Joint Statutory Auditors have also submitted an additional Report dated
27 April 2026, for FY2026. There were no comments or adverse remarks in the said Report as well.

Secretarial Audit

Pursuant to Regulation 24A(1) of the SEBI Listing Regulations, the Members at the 17^th Annual General
Meeting held on 23 July 2025, approved the appointment of DVD & Associates, (Firm Registration No.
S2016MH35900D), a peer reviewed firm of Company Secretaries in Practice as the Secretarial Auditor of the
Company for a term of 5 (five) consecutive years from FY2026 till FY2030.

Pursuant to the provisions of Section 204 of the Act, the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, and Regulation 24A (1) of the SEBI Listing Regulations, the secretarial audit
for FY2026 was conducted by DVD & Associates. The Secretarial Audit report in the prescribed Form MR-3 is
annexed to this Report. The report is unmodified i.e., it does not contain any qualification, reservation, adverse
remark or disclaimer.

The secretarial auditor has not reported any matter under Section 143(12) of the Act, and therefore, no details
are required to be disclosed under Section 134(3) (ca) of the Act.

Pursuant to Regulation 24A(2) of SEBI Listing Regulations, a report on secretarial compliance for FY2026
has been issued by DVD & Associates, Practicing Company Secretaries and the same will be submitted with
the stock exchanges within the given timeframe. The report will also be made available on the website of
the Company.

Internal Audit

Internal Audit function provides an independent view to the Audit Committee on the quality and efficacy of
internal controls, governance systems and processes.

In line with the RBI's guidelines on Risk Based Internal Audit, the Company has adopted a Risk Based Internal
Audit policy.

The Internal Audit provides assurance to the Audit Committee / Board of Directors and Senior Management
on quality and effectiveness of the internal controls, and governance related systems and processes. The
concurrent review process has been strengthened for all products covering underwriting, collateral and
operations to mitigate transaction risk.

At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee. The
Audit Committee regularly reviews the internal audit reports along with the corrective and preventive actions
thereon. Significant audit observations, corrective and preventive actions thereon are presented to the Audit
Committee on a quarterly basis. The Committee also reviews adequacy and effectiveness of internal controls
based on such reports.

The Audit Committee independently meets the internal auditor every quarter without the presence of
management. As per the RBI guidelines, quality assurance and improvement program ('QAIP') is required to
be carried out at least once a year covering all aspects of internal audit function. Accordingly, QAIP was carried
out by an external agency for FY2025 to assess functioning of the internal audit function, adherence to the
internal audit policy, objectives and expected outcomes. Similarly, QAIP for FY2026 will be carried out by an
external agency.

Information System Audit

In terms of the RBI Master Direction on Information Technology Governance, Risk, Controls and Assurance
Practices dated 7 November 2023, the Company is required to put in place IS Audit Policy which shall inter alia
contain a clear description of its mandate, purpose, authority, audit universe, periodicity of audit etc.

During the year under review, an IT system audit was conducted by a CERT-in empaneled audit firm.

The areas audited were IT General Controls, Cyber Security Controls and Information Security Controls as per
the regulatory framework applicable to the Company.

Necessary continuous improvement actions have been taken in line with the audit observations.

The 2^nd surveillance audit under the ISO 27001:2022 standard was conducted by BSI, and the overall outcome
of the audit was found to be satisfactory.

Information Technology Governance, Business Continuity, Cyber Security and IT
Infrastructure

The Reserve Bank of India ('RBI) issued the Master Direction on Information Technology Governance, Risk,
Controls and Assurance Practices dated 7 November 2023, effective 1 April 2024. In line with these Directions,
the Company revised the Terms of Reference of the IT Strategy Committee during the year, which, interalia,
includes annual review of the adequacy and effectiveness of Business Continuity Planning ('BCP) and Disaster
Recovery ('DR') management, review of IT capacity assessments and mitigation measures, approval of
documented standards for access to information assets, and constitution of an Information Security Committee
('ISC) comprising the Chief Information Security Officer ('CISO) and representatives from business and
other functions.

Pursuant to the directions, the CISO is responsible for driving the cyber security strategy and ensuring
compliance with applicable regulatory/statutory requirements on information/cyber security. The Company
has implemented an IT governance policy framework, including the Business Continuity Policy, Information
Security Policy, Information Technology Policy, Cyber Security Policy, IT Outsourcing Policy, Cyber Crisis
Management Plan, Information Security Incident Management Policy, Access Management Policy, and Change
Management Policy.

The IT Strategy Committee is supported by the IT Steering Committee and the ISC comprising senior
executives. The IT Steering Committee supports strategic IT planning, oversight of IT performance, and
alignment of IT initiatives with business objectives, including implementation of robust IT architecture and
compliance with statutory and regulatory requirements. The ISC oversees cyber and information security under
the IT Strategy Committee, comprising the CISO and representatives from business, finance and IT functions,
and is headed by personnel from the risk management function.

To further strengthen secure remote working, the Company implemented Zero Trust Network and VPN
capabilities and deployed Network Access Control across LAN and Wi Fi. Privileged access controls enable
secure remote support for identified partners. The cloud infrastructure includes DR capabilities; DR drills are
conducted twice a year, and periodic backup restoration exercises are performed. While Senior management
laptops are backed up, all laptop disks are encrypted, and security logs are monitored 24x7 by the Security
Operations Center ('SOC).

During the year, the Board was apprised of cyber security developments and incident trends, and
Directors & Senior Management underwent annual IT security training. The Company has also adopted
measures to minimize non production workload during night hours to support cost optimization and reduce
greenhouse effects.

Customer Engagement

Customer engagement and experience are core pillars of our organisation, and we are dedicated to
upholding customer fairness in both letter and spirit across all our actions. Proactive engagement empowers
institutions to gain meaningful insights, manage risks effectively, ensure compliance, and seamlessly adopt
new technologies.

The Company maintains a robust grievance redressal framework with defined turnaround timelines and a
structured escalation matrix. Leveraging Machine Learning-based sentiment analysis and advanced analytics,
we prioritize and categorize customer queries for faster, personalized resolution. Straight-through processing
capabilities and data-driven insights enhance efficiency while enabling proactive engagement, portfolio
segmentation, and tailored financial solutions to strengthen long-term relationships.

Service quality is continuously monitored through structured feedback mechanisms, root cause analysis of
complaints, and active monitoring of social and digital platforms to address concerns promptly and implement
corrective actions where required.

Further details on the Customer Service Committee, brief terms of reference and attendance record of
members are given in the Report on Corporate Governance.

Initiatives of the Company towards customer engagement are detailed in the Management Discussion
and Analysis.

Succession Planning

The Company has in place a succession planning framework to address anticipated, as well as unscheduled
changes in leadership. The plan is revisited, re-evaluated, and updated every year. The key attribute of the
plan involves:

• Organisational level Long Range Strategy wherein talent required to fulfil the Company's strategy and annual
operating plan is discussed and planned.

• Performance appraisal system which helps in identifying people demonstrating consistent performance on
their goals and leadership behaviour in line with our cultural anchors.

• Identifying key succession gaps for critical/expert roles especially in N-1 roles to create internal mobility and
career growth or identifying and periodically refreshing external hiring slate.

• To provide leaders with broader experience, cross-functional exposure, and meaningful developmental
challenges through structured rotations across roles, departments, and functions, thereby helping build
multi-dimensional leadership capability.

Compliance with the POSH Act, 2013

The Company is committed to creating a healthy working environment that enables employees to work without
fear of prejudice, gender discrimination and harassment. At BHFL, we believe that all employees have the right
to be treated with fairness and dignity.

The Company has a policy on prevention of sexual harassment at the workplace. The policy is gender neutral.
This policy has been framed in accordance with the provisions of The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013, and rules framed thereunder.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee
under POSH Act, 2013. The aforesaid policy is available on the website of the Company and can be accessed at
https://www.bajajhousingfinance.in/Prevention-of-Sexual-Harassment-at-Workplace.pdf.

Details of the complaints received during the year are as under:

Other Statutory Disclosures

• In this report, any reference to the statutory or regulatory guidelines, acts, circulars, regulations,
notifications and directions, unless the context otherwise requires, is construed to include any amendments,
modifications, updations or re-enactment thereof as the case may be.

• More details regarding the operations of the Company and its state of affairs are covered in the Management
Discussion and Analysis.

• There is no change in the nature of business of the Company during FY2026.

• During FY2026, there were no changes to the Company's constitutional documents.

• The provisions of Section 148 of the Act relating to maintenance of cost records and cost audit are not
applicable to the Company.

• Details 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 director to median remuneration of employees, percentage increase in the
median remuneration, are annexed to this Report.

• Details of top ten employees in terms of the remuneration and employees in receipt of remuneration as
prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, as amended, containing details prescribed under Rule 5(3) of the said rules, which form part of
the Directors' Report, will be made available to any member on request, as per provisions of Section 136(1)
of the Act.

• As on 31 March 2026, the Company had 2,052 permanent employees, comprising 1,917 male and 135
female employees.

• Disclosure under Section 197(14) of the Act is not applicable to the Company as the Managing Director is not
on the Board of the Holding Company.

• The voting rights are exercised directly by the employees in respect of shares to be allotted under the
Employee Stock Option Scheme of the Company. Thus, the disclosure requirements pursuant to Rule 16(4)
of the Companies (Share Capital and Debentures) Rules, 2014, are not applicable.

• The Company being a non-deposit accepting HFC, the provisions relating to Chapter V of the Act, i.e.,
acceptance of deposit, are not applicable. Hence, information pursuant to Rule 8 of the Companies
(Accounts) Rule, 2014 is not applicable. The Board has also passed a resolution confirming non- acceptance
of public deposits.

• The Company remains committed to supporting working mothers and promoting a gender-inclusive
workplace. The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961.

• The Company has not defaulted on repayment of loans from any banks and financial institutions. There were
no delays or default in payment of interest/principal of any of its debt securities.

• Neither any application was made, nor any proceeding pending under the Insolvency and Bankruptcy Code,
2016 against the Company.

• During FY2026, there was no instance of one-time settlement with Banks or Financial Institutions. Therefore,
as per Rule 8(5) (xii) of Companies (Accounts) Rules, 2014, reasons of difference in the valuation at the time
of one-time settlement and valuation done while taking loans from the Banks or Financial Institutions are
not reported.

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

• The Company has in place various Board approved policies pursuant to Companies Act, 2013, SEBI
Regulations, RBI/NHB Directions and other regulations. These policies are reviewed from time to time keeping
in view the operational requirements and the extant regulations. The Report on Corporate governance
contains web-link for policies hosted on website.

Directors' Responsibility Statement

The financial statements are prepared in accordance with the Indian Accounting Standards ('Ind AS') under
historical cost convention on accrual basis except for certain financial instruments, which are measured at fair
values pursuant to the provisions of the Act and guidelines issued by the SEBI/RBI/NHB. Accounting policies
have been consistently applied except when a newly issued accounting standard is initially adopted or a revision
to an existing accounting standard requires a change in the accounting policy. These form a part of the notes to
the financial statements.

In accordance with the provisions of Section 134(3) (c) of the Act and based on the information provided by
the Management, the Directors state that:

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

ii. they 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 at the end of the financial year and of the profit of the Company for FY2026;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal
financial controls are adequate and are operating effectively; and

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that
such systems are adequate and are operating effectively.

Acknowledgement

The Board of Directors places its gratitude and appreciation for the support and co-operation from its
members, debenture holders, the RBI, the IRDAI, the National Housing Bank, the Securities and Exchange Board
of India, BSE Limited & National Stock Exchange of India Limited, the Registrar to an issue and Share Transfer
Agent, the depositories, banks, financial institutions, trustees for debenture holders and customers.

The Board of Directors also places on record its sincere appreciation for the commitment and hard work
put in by the Management and the employees of the Company and thanks them for yet another good year
of performance.

On behalf of the Board of Directors,

Sd/-

Sanjiv Bajaj

Chairman
DIN: 00014615

Date: 27 April 2026