Five Star Business Finance Limited has filed its Business Responsibility and Sustainability Report (BRSR) for the financial year 2025-26 with the National Stock Exchange of India and BSE Limited, pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report covers disclosures across all nine principles of the National Guidelines for Responsible Business Conduct (NGRBCs) and has received independent reasonable assurance from SGS India Pvt. Ltd for the period April 1, 2025 to March 31, 2026. The company, registered with the Reserve Bank of India as a Systemically Important Non-Deposit Taking Non-Banking Financial Company (SI-ND-NBFC), was incorporated in 1984 and is headquartered in Chennai, Tamil Nadu.

Company Overview and Operations

Five Star Business Finance operates exclusively in the secured lending segment, offering small business loans primarily to micro-entrepreneurs and self-employed individuals with limited access to formal credit. Loan amounts generally range from ₹1 lakh to ₹10 lakh, with the majority of disbursements falling below ₹5 lakh, structured with repayment tenures typically between five and seven years. Over 95% of collateral is secured against self-occupied residential properties, and the company maintains conservative Loan-to-Value (LTV) and Debt Burden Ratio (DBR) thresholds of approximately 50% at loan origination.

Workforce and Employee Well-Being

As at the end of FY 2025-26, Five Star Business Finance employed a total of 14,159 individuals, comprising 14,153 permanent employees and 6 other-than-permanent employees. The workforce is predominantly male, with female employees accounting for 330 out of 14,159 total employees (2.33%). The Board of Directors comprises 8 members, of whom 2 (25%) are women. No differently abled employees were reported during the year.

All 14,153 permanent employees are covered under health insurance and accident insurance. Maternity benefits are extended to all 329 permanent female employees. The cost incurred on well-being measures as a percentage of total revenue stood at 0.34% in FY 2026, compared to 0.27% in FY 2025. The return-to-work rate for female employees following parental leave was 69% in FY 2025-26, with a retention rate of 91% for those who returned in the prior year.

Skill training coverage for permanent employees reached 98.35% (13,920 out of 14,153) in FY 2025-26, compared to 99.09% (11,820 out of 11,929) in FY 2024-25. Health and safety training was provided to 9,590 permanent employees (67.76%) in FY 2025-26, up from 7,440 (62.37%) in FY 2024-25. The Lost Time Injury Frequency Rate (LTIFR) per one million person-hours worked was 0.615 for employees in FY 2025-2026, compared to 0.60 in FY 2024-2025. Total recordable work-related injuries for employees were 16 in FY 2025-2026 versus 17 in FY 2024-2025, and fatalities stood at 6 in both years.

Environmental Performance

Five Star Business Finance's environmental footprint is limited given its financial services nature. The company reported zero consumption from renewable energy sources in both FY 2025-26 and FY 2024-25. Non-renewable energy consumption declined significantly year-on-year.

Greenhouse gas emissions also declined on a year-on-year basis:

Total water consumption for FY 2025-26 was 179,040.56 kilolitres, estimated using CGWA norms of 45 litres per person per working day, with zero water discharged. E-waste generated during FY 2025-26 was 1.65 metric tonnes, all of which was re-used or disposed through authorized recyclers. Independent assurance for energy, water, GHG, and waste disclosures was conducted by SGS India Pvt. Ltd.

Grievance Redressal and Consumer Complaints

During FY 2025-26, a total of 956 customer complaints were received, of which 151 remained pending resolution at the close of the year. Shareholders filed 4 complaints during the year, all of which were reviewed and resolved. No complaints were received from communities, investors (other than shareholders), employees and workers, or value chain partners during the year.

No complaints related to sexual harassment, discrimination, child labour, forced labour, wages, or other human rights issues were filed by employees or workers in FY 2025-26 or FY 2024-25. No data breaches involving personally identifiable information of customers were reported during the year.

CSR Initiatives and Community Engagement

Five Star Business Finance's CSR strategy is structured around four priority pillars: Education, Skill Development, Health and Hygiene, and Community Conservation. All initiatives are aligned with Schedule VII of the Companies Act, 2013. The CSR Committee of the Board oversees planning, implementation, and monitoring of all CSR programmes. During the year, the company undertook CSR spending in the aspirational district of Virudhunagar, Tamil Nadu, with an amount of INR 6,066,000.00.

Key CSR interventions during FY 2025-26 included:

• Education: Scholarship support for 150 students from marginalized communities through Team Everest; construction of school buildings through Sri Sai Education Trust, Akshaya Trust, and Sai Educare Trust; school bus procurement for children with intellectual disabilities through Sri Arunodayam Charitable Trust, Vidyasagar Trust, and Nithilyam Spastic Children Welfare Trust; funding of five food distribution vehicles for the Akshaya Patra Foundation's "Healthy Meals on Wheels" initiative in Warangal district, Telangana.
• Health and Hygiene: Support for running expenses of Kodaikanal Health and Medical Services Hospital; sponsorship of five dialysis machines for the Government Hospital in Mannargudi through Rotary Club of Madras Charitable Trust; construction of a hospital in the Ranipet region through Thirumalai Charitable Trust; purchase of a mobile mammogram unit bus for Project Femicare through Kalpavriksham, Chennai.
• Skill Development and Livelihoods: Construction and equipping of skill development centres through Multipurpose Integrated Developmental Society (MINDS) and Kadamai Education and Social Welfare Trust; apparel skill training and job placements for 240 rural women in Virudhunagar through MINDS; construction of 50 houses for Kani tribal families in the Western Ghats near Ambasamudram through Annai Trust.
• Social Protection: Annual welfare support for homeless girl children through Aram Charitable Trust; provision of food and medical expenses for cancer patients through Sri Matha Trust; free medicines for thalassemia patients through Thalassemia Welfare Association.

A total of 40 NGOs and trusts were supported during the year, with beneficiary counts ranging from 1 to 5,000 per project, and the majority of projects targeting 100% vulnerable and marginalized beneficiaries.

Governance and Policy Framework

The Board of Directors has approved policies covering all nine NGRBC principles. Mr. Lakshmipathy Deenadayalan, Chairman & Managing Director, is the highest authority responsible for implementation and oversight of the Business Responsibility Policies. The Audit Committee of the Board, along with the management team, reviews and ensures continued compliance with applicable laws. No non-compliances were observed or reported during the reporting period. The company is affiliated with one national trade and industry association — the Finance Companies Association (India). No disciplinary actions for bribery or corruption were taken against any directors, KMPs, employees, or workers in FY 2026 or FY 2025, and no complaints related to conflict of interest were received during either year.

Five-Star Business Finance Limited has scheduled its 42nd Annual General Meeting (AGM) for August 31, 2026, to be conducted via Video Conferencing (VC) or Other Audio Visual Means (OAVM). The meeting is set to begin at 10:00 AM IST and will seek shareholder approval for critical capital structure decisions, including the authorization to issue Non-Convertible Debentures (NCDs) aggregating up to ₹5,000 crore through private placement. This move aims to secure funding for business expansion and working capital needs amidst a challenging macroeconomic environment.

The company is also seeking consent to raise borrowings up to ₹13,000 crore, an increase from the existing limit of ₹12,000 crore. This expansion requires shareholder approval under Section 180(1)(c) of the Companies Act, 2013, as it exceeds the aggregate of paid-up capital and free reserves. Concurrently, the Board seeks authorization under Section 180(1)(a) to create charges on assets to secure these borrowings. These resolutions are vital for maintaining liquidity and supporting growth initiatives in the secured lending segment.

Key Resolutions and Corporate Actions

The AGM agenda includes several ordinary and special resolutions. Key details of the proposals are outlined below:

Shareholders will also vote on the appointment of Sreeram Ranganathan Iyer as a Non-Executive Independent Director and the re-appointment of Thirulokchand Vasan. Sreeram Ranganathan Iyer, a global banker with over 33 years of experience, will serve for five years from July 25, 2026. The Board has recommended a final dividend of ₹2 per equity share for FY26, subject to shareholder approval.

Regulatory Compliance and Voting

In compliance with SEBI Master Circular No. HO/38/13(4)/2026-MIRSD-POD/I/4298/2026, holders of physical securities must update their KYC details, including PAN and bank account information, to receive dividends electronically. The record date for dividend entitlement is fixed as July 31, 2026. Remote e-voting for the AGM will be available from August 28, 2026, to August 30, 2026, through the National Securities Depository Limited (NSDL) platform. The Notice of Annual General Meeting is available on the company’s website.

What the Numbers Show

The push for higher borrowing limits and NCD issuance underscores Five-Star Business Finance’s strategy to maintain aggressive growth despite asset quality pressures. With Gross Non-Performing Assets (GNPA) rising to 3.37% in FY26 from 1.79% in FY25 due to sector-wide overleverage issues, securing diverse and cost-effective funding sources is crucial. The company’s Capital Adequacy Ratio stood at 51.89% as of March 31, 2026, well above the RBI’s 15% threshold, providing a strong buffer for increased leverage.