1    COMPANY INFORMATION

Mahindra & Mahindra Financial. Services Limited ('the Company') with Corporate ID No.: L65921M H1991PLC059642, incorporated on 1^st January 1991 and domiciled in India, is a pubLic Limited company, headquartered in Mumbai. The Company is a Non-Banking Financial Company ('NBFC'), primarily engaged in financing new and pre-owned auto, utility vehicles, tractors, passenger cars and commercial vehicles through its pan India branch network. The Company has a diversified lending portfolio across retail, small and medium enterprises and commercial customers with a significant presence in rural and semi-urban India.

The Company is registered as a Systemicaly Important Deposit Accepting NBFC as defined under Section 45-IA of the Reserve Bank of India ('RBI') Act, 1934 with effect from 4^th September 1998, with registration no. 13.00996 and classified as NBFC-Investment and Credit Company (NBFC-ICC) pursuant to circuLar DNBR (PD) CC.No.097/03.10.001/2018-19 dated 22^nd February 2019. The equity shares of the Company are Listed on the NationaL Stock Exchange of India Limited ("NSE") and the BSE Limited ("BSE") in India. The Company is a subsidiary of Mahindra & Mahindra Limited.

The Company's registered office is at Gateway BuiLding, ApoLLo Bunder, Mumbai 400001, India.

2    SUMMARY OF MATERIAL ACCOUNTING POLICY2.1 Statement of compliance and basis for preparation and presentation of financial statements

These standaLone or separate financiaL statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Companies Act, 2013 ("the Act”), and is in conformity with the accounting principLes generaLLy accepted in India and other reLevant provisions of the Act. Further, the Company has compLied with aLL the directions reLated to ImpLementation of Indian Accounting Standards prescribed for Non-Banking FinanciaL Companies (NBFCs) in accordance with the RBI notification

no. RBI/2019-20/170 DOR NBFC).CC.PD. No.109/22.10.106/2019-20 dated 13 March 2020.

Any appLication guidance/ cLarifications/ directions/ expectations issued by RBI or other reguLators are impLemented as and when they are issued/ appLicabLe.

Accounting poLicies have been consistentLy appLied except where a newLy-issued accounting standard is initiaLLy adopted or a revision to an existing accounting standard requires a change in the accounting poLicy hitherto in use.

These standaLone or separate financiaL statements have been approved by the Company's Board of Directors and authorized for issue on 22^nd ApriL 2025.

2.2    Functional and presentation currency

These financiaL statements are presented in Indian Rupees ('INR' or '?') which is aLso the Company's functionaL currency. ALL amounts are rounded-off to the nearest crore, unless indicated otherwise.

2.3    Basis of measurement

The financial statements have been prepared on a historicaL cost convention and on an accruaL basis, except for certain assets and LiabiLities which are measured at fair vaLues as required by reLevant Ind AS.

2.4    Measurement of fair values

The Company's certain accounting policies and discLosures require the measurement of fair values, for both financial and nonfinancial assets and liabilities. The Company has estabLished poLicies and procedures with respect to the measurement of fair vaLues. Fair values are categorized into different levels in a fair vaLue hierarchy based on the inputs used in the vaLuation techniques as foLLows:

-    LeveL 1: Quoted prices (unadjusted) in active markets for identicaL assets and LiabiLities.

-    LeveL 2: Inputs other than quoted prices incLuded in LeveL 1 that are observabLe

for the asset or LiabiLity, either directLy or indirectLy.

- LeveL 3: Inputs for the asset or LiabiLity that are not based on observabLe market data (unobservabLe inputs).

2.5 Use of estimates and judgements and Estimation uncertainty

In preparing these financiaL statements, management has made judgements, estimates and assumptions that affect the application of the Company's accounting poLicies and the reported amounts of assets, LiabiLities, income, expenses and the discLosures of contingent LiabiLities. ActuaL resuLts may differ from these estimates. Estimates and underLying assumptions are reviewed on an ongoing basis. Revisions of estimates are recognized prospectiveLy.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a materiaL adjustment to the carrying amounts of assets and LiabiLities within the next financial year, are described below. The Company based its assumptions and estimates on parameters avaiLabLe when the financial statements were issued. Existing circumstances and assumptions about future deveLopments, however, may change due to market changes or circumstances arising that are beyond the controL of the Company. Such changes are reflected in the assumptions when they occur.

FoLLowing are areas that invoLved a higher degree of estimate and judgement or compLexity in determining the carrying amount of some assets and LiabiLities.

i) Effective Interest Rate (EIR) Method

The Company recognizes interest income / expense using a rate of return that represents the best estimate of a constant rate of return over the expected Life of the Loans given / taken. This estimation, by nature, requires an eLement of judgement regarding the expected behaviour and Life-cycLe of the instruments, as weLL as expected changes

to other fee income/expense that are integraL parts of the instrument.

ii) Impairment of FinanciaL Assets

The measurement of impairment Losses on Loan assets and commitments, requires judgement, in estimating the amount and timing of future cash flows and recoverabiLity of coLLateraL vaLues whiLe determining the impairment Losses and assessing a significant increase in credit risk.

The Company's Expected Credit Loss (ECL) caLcuLation is the output of a compLex modeL with a number of underLying assumptions regarding the choice of variabLe inputs and their interdependencies. ELements of the ECL modeL that are considered accounting judgements and estimates incLude:

-    The Company's criteria for assessing if there has been a significant increase in credit risk

-    The cLassification of financiaL assets when their ECL is assessed on a coLLective basis

-    DeveLopment of ECL modeL, incLuding the various formuLae and the choice of inputs

-    SeLection of forward-Looking macroeconomic scenarios and their probabiLity weights, to provide the economic inputs into the ECL modeL

-    Management overLay, if any, used in circumstances where management judges that the existing inputs, assumptions and modeL techniques do not capture aLL the risk factors reLevant to the Company's Lending portfoLios.

It has been the Company's poLicy to reguLarLy review its modeL in the context of actuaL Loss experience and adjust when necessary (refer note 49).

iii)    Provisions and contingent liabilities

The Company does not recognise a contingent LiabiLity but discLoses its existence in the financial, statements.

Contingent assets are neither recognised nor discLosed in the financial, statements. However, contingent assets are assessed continuaLLy and if it is virtuaLLy certain that an inflow of economic benefits wiLL arise, the asset and reLated income are recognised in the period in which the change occurs. Contingent Liabilities in respect of show cause notices are considered onLy when converted into demands.

The reLiabLe measure of the estimates and judgments pertaining to Litigations and the reguLatory proceedings in the ordinary course of the Company's business are discLosed as contingent Liabilities.

Estimates and judgements are continuaLLy evaLuated and are based on historical experience and other factors, incLuding expectations of future events that may have a financiaL impact on the Company and that are beLieved to be reasonable under the circumstances.

When there is a possibLe obligation or a present obLigation in respect of which the LikeLihood of outflow of resources is remote, no provision is made. The discLosure of contingent LiabiLity is made when there is a possibLe obLigation or present obligation that may, but probabLy wiLL not, require an outflow of resources. The Company aLso discLoses present obligation for which a reLiabLe estimate cannot be made as a contingent LiabiLity.

iv)    Provision for income tax and deferred tax assets:

The Company uses estimates and judgements based on the reLevant ruLings in the areas of aLLocation of revenue, costs, aLLowances and disaLLowances which is exercised whiLe determining the provision for income tax, incLuding the amount expected to be paid / recovered for uncertain tax positions. A deferred tax asset is recognized to the extent that it is probabLe that future taxabLe profit wiLL be avaiLabLe against which the deductible temporary differences and tax Losses, if any, can be utiLized. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period.

v)    Defined Benefit Plans:

The cost of the defined benefit gratuity pLan and the present vaLue of the gratuity obLigation are determined using actuariaL valuations. An actuariaL vaLuation invoLves making various assumptions that may differ from actuaL deveLopments in the future. These incLude the determination of the discount rate, future saLary increases and mortaLity rates. Due to the complexities invoLved in the vaLuation and its Long-term nature, a defined benefit obligation is sensitive to changes in these assumptions. ALL assumptions are reviewed at each reporting date.

vi)    Going Concern

The financiaL statements of the Company are prepared on a going concern basis for the year ended 31^st March 2025.

The Management is satisfied that the Company shaLL be abLe to continue its business for the foreseeable future and no materiaL uncertainty exists that may cast significant doubt on the going concern assumption. In making this assessment, the Management has considered a wide range of information reLating to present and future conditions, incLuding future projections of profitability, cash flows and capitaL resources.

2.6 Revenue recognition :a) Recognition of interest income

Interest income is recognized in Statement of profit and Loss using the effective interest method for aLL financiaL instruments measured at amortized cost, debt instruments measured at Fair VaLue Through Other Comprehensive

Interest income from investments is recognized when it is certain that the economic benefits wiLL flow to the Company and the amount of income can be measured reLiabLy. Interest income is accrued on a time proportionate basis, by reference to the principaL outstanding and at the effective interest rate appLicabLe.

b) Recognition of interest income on securitized loans

The Company securitizes certain pooLs of Loan receivabLes in accordance with appLicabLe RBI guidelines. The Company, being Originator of these Loan receivabLes, aLso acts as Servicer with a responsibility of coLLection of receivabLes from its borrowers and depositing the same in CoLLection and Pay-out Account maintained by the SPV Trust for making scheduLed pay-outs to the investors in Pass Though Certificates (PTCs) issued by the SPV Trust. These securitization transactions aLso requires the Company to provide for first Loss credit enhancement in various forms, such as corporate guarantee, cash coLLateraL, subscription to subordinated PTCs as credit support in the event of shortfaLL in coLLections from underLying Loan contracts. By virtue of existence of credit enhancement, the Company is exposed to credit risk, being the expected Losses that wiLL be incurred on the transferred Loan receivabLes to the extent of the credit enhancement provided.

I n view of the above, the Company has retained substantiaLLy aLL the risks and rewards of ownership of the financiaL asset and thereby does not meet the de-recognition criteria as set out in Ind AS 109. Consideration received in this transaction is presented as "Associated LiabiLity reLated to Securitization transactions" and the Loan receivabLes securitized are continued to be reflected as Loan assets. These Loan assets are carried at amortized cost and the interest income is recognized by appLying the EIR to the gross carrying amount of financiaL assets other than credit-impaired assets.

In case of credit-impaired financial, assets, the Company recognises interest income on the amortised cost net of impairment Loss on financiaL assets at EIR. If financiaL asset is no Longer credit-impaired, the Company reverts to caLcuLating interest income on a gross basis (amortised cost).

c)    Subvention income

Subvention income received from manufacturer / deaLers at the inception of the Loan contracts which is directLy attributabLe to individuaL Loan contracts in respect of vehicLes financed is recognized in the Statement of profit and Loss using the effective interest method over the tenor of such Loan contracts measured at amortized cost.

In case of subvention income which is subject to confirmation from manufacturer and received Later than inception date is recognized in the Statement of profit and Loss using straight Line method over the tenor of such Loan contracts.

d)    Rental Income

Income from operating Leases is recognized in the Statement of profit and Loss on a straight-Line basis over the Lease term. In certain lease arrangements, variable rentaL charges are aLso recognized over and above minimum commitment charges based on usage pattern and make/modeL of the asset.

e)    Income from finance lease

The income earned on finance Lease are recognised in the Statement of profit and Loss account based on pattern reflecting constant periodic return on the Company's net investment in lease.

The fees / charges received towards fleet management services rendered to customers is recognized over the Lease term.

f)    Fees, charges and commission income :

The Company recognises service and administration charges at point in time

towards rendering of additionaL services to its Loan customers on satisfactory compLetion of service deLivery.

Fees and commission that are not directly Linked to the sourcing of financiaL assets are recognised at point in time in the Statement of Profit and Loss when the right to receive the same is established.

Instrument Return Charges levied on customers for non payment of instaLments on the contractuaL date is recognised on reaLisation.

Distribution income is earned by distribution of services and products of other entities under distribution arrangements. The income so earned is recognised on successfuL distribution on behaLf of other entities subject to there being no significant uncertainty of its recovery from the other entities.

ForecLosure or prepayment charges are coLLected from Loan customers for earLy payment/cLosure of Loan and are recognised on reaLisation.

CoLLection fee reLated to transferred assets under securitisation transactions is recognised on remittance of collection proceeds to SpeciaL Purpose VehicLe (SPV) created under securitization transaction.

CoLLection fee reLated to transferred assets under assignment deaLs is recognised on remittance of coLLection proceeds to assignees as per the service agreement entered with the assignees.

g) Income on Derecognised (Assigned) Loans :

Gains arising out of direct assignment transactions comprises of the difference between interest on the Loan portfoLio and the applicable rate at which the direct assignment is entered into with the assignee, aLso known as the right of excess interest spread (EIS). The future EIS basis the expected cash flow on execution of the transaction, discounted at the appLicabLe rate entered into with

the assignee is recorded upfront in the statement of profit and Loss.

2.7 Property, Plant and Equipments (PPE)

PPE are stated at cost of acquisition (including incidental expenses), less accumulated depreciation and accumuLated impairment Loss, if any.

Cost of acquisition consists of purchase price or construction cost which is the amount paid, freight, duties, taxes and any other incidental expenses directLy attributable to bringing the asset to the Location and condition necessary for it to be capabLe of operating in the manner intended by the management.

Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probabLe that future economic benefits deriving from the cost incurred wiLL flow to the enterprise and the cost of the item can be measured.

Other repairs and maintenance costs are expensed off as and when incurred.

Advances paid towards the acquisition of PPE (excLuding Lease improvements) outstanding at each baLance sheet date are discLosed separately as "CapitaL advances" under other non-financiaL assets. CapitaL work in progress comprises the cost of PPE that are not ready for its intended use at the reporting date and cost of LeasehoLd improvements. CapitaL work-in-progress is stated at cost, net of impairment Loss, if any. On completion of work reLated to LeasehoLd property improvements, the reLevant cost is capitalized and the same is amortized over the Lease term.

Depreciation on PPE is provided on straightLine basis in accordance with the usefuL Lives specified in ScheduLe II to the Companies Act, 2013 on a pro-rata basis subject to exceptions Listed here beLow. Depreciation methods, usefuL Lives and residuaL vaLues are reviewed in each financiaL year, and changes, if any, are accounted for prospectiveLy.

I n accordance with Ind AS 116 - Leases, the Right-Of-Use assets (LeasehoLd premises) are initiaLLy recognized at cost which comprises

of initiaL amount of Lease LiabiLity adjusted for any Lease payments made at or prior to the commencement date of the Lease Less any Lease incentives. These are subsequently measured at cost Less accumuLated depreciation and impairment Losses, if any. Right-Of-Use assets (LeasehoLd premises) are depreciated from the commencement date on a straight-Line basis over the shorter of the Lease term and usefuL Life of the underLying asset.

The estimated usefuL Lives used for computation of depreciation are as foLLows:

Exceptions to usefuL Lives specified in ScheduLe II to the Companies Act, 2013 -

-    Assets costing Less than '5000/- are fuLLy depreciated in the period of purchase.

-    VehicLes provided to empLoyees as part of Cost-To-Company (CTC) scheme are depreciated using estimated usefuL Life of 4 years.

-    Repossessed vehicLes capitalized for own use are depreciated at 15% Leading to an estimated usefuL Life of 6.67 years.

PPE is derecognized on disposaL or when no future economic benefits are expected from its use. Assets retired from active use and heLd for disposaL are generaLLy stated at the Lower of their carrying amount & fair vaLue Less costs to seLL. Any gain or Loss arising on derecognition of the asset (caLcuLated as the difference between the net disposaL proceeds and the net carrying amount of the asset) is recognized in other income / netted off from any Loss on disposaL in the Statement of profit and Loss in the year the asset is derecognized.

2.8    Intangible assets :

IntangibLe assets are stated at cost Less accumulated amortization and accumulated impairment Loss, if any.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

IntangibLe assets representing computer software are amortised using the straightline method over a period of 3 to 6 years, which is the Management's estimate of useful life. Amortization methods, useful lives and residual values are reviewed in each financial year, and changes, if any, are accounted for prospectiveLy.

I ntangibLe assets not ready for the intended use on the date of BaLance Sheet are discLosed as "IntangibLe assets under deveLopment".

An intangibLe asset is derecognised on disposal, or when no future economic benefits are expected from use or disposaL. Gains or Losses arising from derecognition of an intangible asset, measured as the difference between the net disposaL proceeds and the carrying amount of the asset are recognised in the Statement of Profit and Loss when the asset is derecognised.

2.9    Investments in subsidiaries, associate and joint ventures :

I nvestment in subsidiaries, associates and Joint Ventures are recognised at cost and are not adjusted to fair vaLue at the end of each reporting period as aLLowed by Ind AS 27 'Separate financial statement'. Cost of investment represents amount paid for acquisition of the said investment.

The Company reviews the carrying amounts of its investments in subsidiaries, associate and joint ventures at the end of each reporting period, to determine whether there is any indication that those investments have impaired. If any such indication exists, the recoverabLe amount of the investment is estimated in order to determine the extent of

the impairment Loss (if any) and provided for

accordingLy. Such impairment Loss is reduced

from the carrying vaLue of investments.

2.10 Foreign exchange transactions and translations :

a)    Initial recognition

Transactions in foreign currencies are recognized at the prevailing exchange rates between the reporting currency and a foreign currency on the transaction date.

b)    Translation

Transactions in foreign currencies are transLated into the functionaL currency using the exchange rates at the dates of the transactions. Foreign exchange gains and Losses resulting from the settLement of such transactions and from the transLation of monetary assets and LiabiLities denominated in foreign currencies at year end exchange rates are recognized in Statement of profit and Loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss within finance costs. All other foreign exchange gains and Losses are presented in the Statement of profit and loss on a net basis.

Non-monetary items that are measured at fair vaLue in a foreign currency are transLated using the exchange rates at the date when the fair vaLue was determined. TransLation differences on assets and LiabiLities carried at fair vaLue are reported as part of the fair vaLue gain or Loss. Thus, transLation differences on non- monetary assets and LiabiLities such as equity instruments held at fair value through profit or loss are recognized in profit or loss as part of the fair vaLue gain or Loss and transLation differences on non-monetary assets such as equity investments classified as FVOCI are recognized in other comprehensive income.

Non-monetary items that are measured at historicaL cost in foreign currency are not retransLated at reporting date.

2.11 Financial instruments :

a)    Initial Recognition

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractuaL provisions of the instruments.

Financial assets and financial liabilities are initially recognized at fair value. Transaction costs that are directLy attributabLe to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial LiabiLities at FVTPL) are added to or deducted from the fair vaLue of the financiaL assets or financiaL LiabiLities, as appropriate, on initiaL recognition. Transaction costs directLy attributabLe to the acquisition of financiaL assets or financiaL LiabiLities at FVTPL are recognized immediately in Statement of profit and loss.

b)    Classification and Subsequent measurement of financial assets

On initial recognition, a financial asset is classified as measured at

-    Amortized cost;

-    FVOCI - debt instruments;

-    FVOCI - equity instruments;

-    FVTPL

Amortized cost -

The Company's business model is not assessed on an instrument-by-instrument basis, but at a higher LeveL of aggregated portfoLios being the LeveL at which they are managed. The financial asset is held within a business modeL of coLLecting contractuaL cash flows as per the contractual terms that give rise on specified dates to cash flows that are solely payment of principal and interest ('SPPI') on the principaL amount outstanding. AccordingLy, the Company measures Bank baLances, Loans, Trade receivabLes and other financial instruments that meet the SPPI criterion at amortized cost.

amortized cost is reduced by impairment Losses. Interest income, and impairment provisions are recognized in Statement of profit and Loss. Any gain and Loss on derecognition is recognized in Statement of profit and Loss.

Debt investment at FVOCI are subsequently measured at fair value. Interest income at coupon rate and impairment provision, if any, are recognized in Statement of profit and Loss. Net gains or Losses on fair vaLuation are recognized in OCI. On derecognition, gains and Losses accumuLated in OCI are recLassified to Statement of profit and Loss.

For equity investments, the Company makes an eLection on an instrument-by-instrument basis to designate equity investments as measured at FVOCI. These elected investments are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in the reserves. The cumulative gain or Loss is not reclassified to Statement of profit and Loss on disposal of the investments. These investments in equity are not heLd for trading. Instead, they are heLd for strategic purpose. Dividend income received on such equity investments are recognized in Statement of profit and Loss.

Equity investments that are not designated as measured at FVOCI are designated as measured at FVTPL and subsequent changes in fair vaLue are recognized in Statement of profit and Loss.

Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in Statement of profit and Loss.

c) Financial liabilities and equity instruments:Classification as debt or equity -

Debt and equity instruments issued by the Company are classified as either financiaL

LiabiLities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financiaL LiabiLity and an equity instrument.

Equity instruments -

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting aLL of its liabilities. Equity instruments issued by Company are recognized at the proceeds received. Transaction costs of an equity transaction are recognized as a deduction from equity.

Financial liabilities -

Financial liabilities are classified and measured at amortized cost or FVTPL. A financiaL LiabiLity is classified as at FVTPL if it is classified as heLd-for-trading or it is a derivative (that does not meet hedge accounting requirements) or it is designated as such on initial recognition. Other financiaL Liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and Losses are recognized in Statement of profit and Loss. Any gain or Loss on derecognition is aLso recognized in Statement of profit and Loss.

d) Financial guarantee contracts:

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the hoLder for a Loss it incurs because a specified debtor faiLs to make payments when due in accordance with the terms of a debt instrument.

FinanciaL guarantee contracts issued by a Company are initiaLLy measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

- the amount of Loss aLLowance determined in accordance with impairment requirements of Ind AS 109 - Financial Instruments; and

- the amount initiaLLy recognized Less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Ind AS 115 Revenue from Contracts with Customers.

e)    Derecognition Financial assets

The Company derecognizes a financiaL asset when the contractuaL rights to the cash flows from the financiaL asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially aLL of the risks and rewards of ownership of the financiaL asset are transferred or in which the Company neither transfers nor retains substantiaLLy aLL of the risks and rewards of ownership and does not retain controL of the financiaL asset.

I f the Company enters into transactions whereby it transfers assets recognized on its baLance sheet, but retains either aLL or substantiaLLy aLL of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

A financiaL LiabiLity is derecognized when the obLigation in respect of the LiabiLity is discharged, canceLLed or expires. The difference between the carrying vaLue of the financiaL LiabiLity and the consideration paid is recognized in Statement of profit and Loss.

The Company aLso derecognises a financiaL LiabiLity when its terms are modified and the cash flows under the modified terms are substantiaLLy different. In this case, a new financiaL LiabiLity based on the modified terms is recognised at fair vaLue.

f)    Derivative financial instruments and hedge accounting

The Company enters into derivative financiaL instruments, primariLy foreign exchange forward contracts, currency swaps and principaL & interest rate swaps,

to manage its borrowing exposure to foreign exchange and interest rate risks.

Derivatives embedded in non-derivative host contracts are treated as separate derivatives when their risks and characteristics are not cLoseLy reLated to those of the host contracts and the host contracts are not measured at FVTPL.

Derivatives are initiaLLy recognized at fair vaLue on the date on which the contracts are entered into and are subsequentLy remeasured to their fair vaLue at the end of each reporting period. The resulting gain/Loss is recognized in Statement of profit and Loss immediately unLess the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or Loss depends on the nature of the hedging reLationship and the nature of the hedged item.

The Company designates certain hedging instruments, which incLude derivatives in respect of foreign currency risk, as either fair vaLue hedges or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge reLationship, the Company documents the reLationship between the hedging instrument and the hedged item, aLong with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair vaLues or cash flows of the hedged item attributable to the hedged risk.

Changes in fair vaLue of the designated portion of derivatives that quaLify as fair vaLue hedges are recognised in the statement of profit and Loss immediately, together with any changes in the fair vaLue of the hedged asset or LiabiLity that are attributabLe to the hedged risk.

The effective portion of changes in the fair value of derivatives that are designated and quaLify as cash fLow hedges is recognised in other comprehensive income and accumulated under hedging reserve. The gain or Loss relating to the ineffective portion is recognised immediately in the statement of profit and Loss.

Amounts previousLy recognised in other comprehensive income and accumuLated in equity (relating to effective portion as described above) are reclassified to profit or Loss in the periods when the hedged item affects profit or Loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or Loss recognised in other comprehensive income and accumuLated in equity at that time remains in equity and is recognised when the forecast transaction is uLtimateLy recognised in the statement of profit and Loss. When a forecast transaction is no Longer expected to occur, the gain or Loss accumulated in equity is recognised immediately in the statement of profit and Loss..

g) Impairment of financial instrumentsEquity instruments are not subject to impairment under Ind AS 109.

The Company recognizes lifetime expected credit Losses (ECL) when there has been a significant increase in credit risk since initiaL recognition and when the financial instrument is credit impaired. If the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the Loss aLLowance for that financiaL instrument at an amount equaL to 12 month ECL. The assessment of whether lifetime ECL should be recognized is based on significant increases in the LikeLihood or risk of a defauLt occurring since initiaL recognition. 12 month ECL represents the portion of Lifetime ECL that is expected to resuLt from defauLt

events on a financial instrument that are possible within 12 months after the reporting date.

Lifetime ECL represents the expected credit Losses that wiLL resuLt from aLL possibLe default events over the expected life of a financial instrument.

When determining whether credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit Losses, the Company considers reasonabLe and supportabLe information that is reLevant and avaiLabLe without undue cost or effort. This includes both quantitative and quaLitative information and anaLysis, including on historical experience and forward-Looking information. (refer note 49).

The Company recognizes lifetime ECL for trade advances. The expected credit losses on trade advances are estimated using a provision matrix based on the Company's historicaL credit Loss experience.

The industry benchmarking is used for Leasing portfoLio in the absence of sufficient history.

Management overLay is used to adjust the ECL aLLowance in circumstances where management judges that the existing inputs, assumptions and modeL techniques do not capture aLL the risk factors reLevant to the Company's Lending portfolios. Emerging LocaL or gLobaL macroeconomic, micro economic or poLiticaL events, and naturaL disasters that are not incorporated into the current parameters, risk ratings, or forward Looking information are exampLes of such circumstances. The use of management overLay may impact the amount of ECL recognized.

Loss aLLowances for financiaL assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities measured at FVOCI, the Loss aLLowance is recognized in OCI.

Loan contract renegotiation and modifications:

Loans are identified as renegotiated and classified as credit impaired when the Company modifies contractual payment terms due to significant credit distress of the borrower. Renegotiated Loans remain classified as credit impaired until there is sufficient evidence to demonstrate a significant reduction in the risk of nonpayment of future cash flows and retain the designation of renegotiated Loan untiL maturity or derecognition.

A Loan that is renegotiated is derecognised if the existing agreement is canceLLed and a new agreement is made on substantiaLLy different terms, or if the terms of an existing agreement are modified such that the renegotiated Loan is a substantiaLLy different financial instrument. Any new Loans that arise foLLowing derecognition events in these circumstances are considered to be originated credit impaired financial asset and continue to be discLosed as renegotiated Loans.

Other than originated credit-impaired loans, aLL other modified loans could be transferred out of stage 3 if they no Longer exhibit any evidence of being credit impaired and, in the case of renegotiated loans, there is sufficient evidence to demonstrate a significant reduction in the risk of non-payment of future cash flows over the minimum observation period, and there are no other indicators of impairment. These Loans couLd be transferred to stage 1 or 2 based on the risk assessment mechanism by comparing the risk of a defauLt occurring at the reporting date (based on the modified contractual terms) and the risk of a default occurring at initiaL recognition (based on the original, unmodified contractual terms). Any amount written off as a result of the modification of contractual terms would not be reversed.

Loan modifications that are not identified as renegotiated are considered to be commercial restructuring. Where a commerciaL restructuring resuLts in a modification (whether legalised through an amendment to the existing terms or the issuance of a new Loan contract) such that the Company's rights to the cash flows under the original contract have expired, the oLd Loan is derecognised and the new Loan is recognised at fair vaLue. The rights to cash fLows are generaLLy considered to have expired if the commerciaL restructure is at market rates and no payment-reLated concession has been provided. Mandatory and generaL offer Loan modifications that are not borrower-specific, for example market-wide customer reLief programmes announced by the ReguLator or other statutory body, have not been classified as renegotiated Loans and so have not resuLted in derecognition, but their stage aLLocation is determined considering aLL avaiLabLe and supportabLe information under the Company's ECL poLicy.

h)    Simplified approach for trade receivables and contract assets

The Company foLLows 'simplified approach' for recognition of impairment Loss aLLowance on trade receivabLes that do not contain a significant financing component. The application of simplified approach does not require the Company to track changes in credit risk.

i)    Collateral repossessed -

The underlying Loans in respect of which coLLateraLs have been repossessed but not soLd are considered as Stage 3 assets and impairment aLLowance is estimated as per the ECL poLicy.

I n the normaL course of business, the Company does not physicaLLy repossess assets/properties in its Loan portfolio, but engages externaL agents to repossess and recover funds, generaLLy by seLLing at auction, to settLe outstanding debt. Any surpLus funds are returned to the customers/ obLigors. As a resuLt of this practice, the assets / properties under LegaL repossession processes are not separately recorded on the baLance sheet.

j) Write offs -

The gross carrying amount of a financial, asset is written off when there is no reaListic prospect of further recovery. This is generaLLy the case when the Company determines that the debtor/ borrower does not have assets or sources of income that couLd generate sufficient cash fLows to repay the amounts subject to the write- off as per the Company's poLicy. However, financial, assets that are written off couLd stiLL be subject to enforcement activities under the Company's recovery procedures, taking into account LegaL advice where appropriate. Any recoveries made from written off assets are netted off against the amount of financiaL assets written off during the year under "Bad debts and write offs" forming part of "Impairment on financiaL instruments" in the Statement of profit and Loss.

2.12 Employee benefits:a)    Short-term employee benefits

ALL empLoyee benefits payabLe whoLLy within twelve months of receiving employee services are classified as short-term empLoyee benefits. These benefits incLude salaries and wages, bonus and ex-gratia. Short-term empLoyee benefit obLigations are measured on an undiscounted basis and these are expensed as the related service is provided. A LiabiLity is recognized for the amount expected to be paid if the Company has a present LegaL or constructive obligation to pay this amount as a resuLt of past service provided by the employee and the obligation can be estimated reliably.

b)    Contribution to provident fund, Superannuation fund, ESIC and National Pension Scheme -

The defined contribution plans i.e. provident fund (administered through Regional Provident Fund Office), superannuation scheme and empLoyee state insurance corporation and NationaL Pension Scheme are post-empLoyment benefit pLans under which a Company pays fixed contributions and wiLL have no

legal and constructive obligation to pay further amounts beyond its contributions. The Superannuation scheme, a defined contribution scheme, administered by Life Insurance Corporation of India and the Company has no obLigation to the scheme beyond its contributions.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is avaiLabLe.

Company's contribution paid/payabLe during the year to provident fund, Superannuation scheme, ESIC and NationaL Pension Scheme is recognized in the Statement of profit and Loss.

c) Gratuity and post retirement medical benefit -

The Company's LiabiLity towards gratuity and post retirement medical benefit schemes are determined by independent actuaries, using the projected unit credit method. The present vaLue of the defined benefit obLigation is determined by discounting the estimated future cash outflows by reference to market yieLds at the end of the reporting period on government bonds that have terms approximating to the terms of the reLated obLigation. Past services are recognized at the earLier of the pLan amendment / curtaiLment and recognition of reLated restructuring costs/termination benefits.

The Company determines the net interest expense (income) on the net defined benefit LiabiLity (asset) for the period by appLying the discount rate used to measure the defined benefit obLigation at the beginning of the annual period to the then-net defined benefit LiabiLity (asset), taking into account any changes in the net defined benefit LiabiLity (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses reLated to defined benefit pLans are recognised in the Statement of Profit and Loss.

When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits avaiLabLe in the form of any future refunds from the plan or reductions in future contribution to the plan. To calculate the present value of economic benefits, consideration is given to any appLicabLe minimum funding requirements.

Remeasurement gains/losses -

Remeasurement of defined benefit pLans, comprising of actuariaL gains / Losses, return on plan assets excluding interest income are recognized immediateLy in the balance sheet with corresponding debit or credit to Other Comprehensive Income (OCI). Remeasurements are not recLassified to Statement of profit and Loss in the subsequent period.

When the benefits of a pLan are changed or when a pLan is curtaiLed, the resuLting change in benefit that reLates to past service ('past service cost' or 'past service gain') or the gain or Loss on curtaiLment is recognised immediateLy in Statement of profit and Loss. The Company recognises gains and Losses on the settLement of a defined benefit pLan when the settLement occurs.

d)    Leave encashment / compensated absences / sick leave -

The Company provides for the encashment / avaiLment of Leave with pay subject to certain ruLes as per Leave poLicy of the Company. The empLoyees are entitLed to accumuLate Leave subject to certain Limits for future encashment / avaiLment. The LiabiLity is provided based on the number of days of unutiLized Leave at each baLance sheet date on the basis of an independent actuariaL vaLuation.

e)    Employee stock options :

Compensation cost on Equity-settLed share-based payments to empLoyees are recognized as an expense at the fair vaLue of equity stock options at the grant date. The fair vaLue determined at the grant date of the equity-settLed share-based payments is expensed on a straight-Line basis over the graded vesting period, based on the Company's estimate of equity instruments that wiLL eventuaLLy vest, with a corresponding increase in equity.

f) Long-Term Incentive Plan:

The Company pays Long Term Incentives to certain empLoyees on fuLfiLment of prescribed criteria/conditions. The Company's LiabiLity towards Long Term Incentive is determined actuariaLLy based on certain assumptions regarding rate of Interest, staff attrition and mortaLity as per Projected Unit Credit Method. Expenses towards Long term incentive are recognised in the Statement of Profit and Loss.

2.13    Finance costs :

Finance costs incLude interest expense computed by appLying the effective interest rate on respective financiaL instruments measured at Amortized cost. FinanciaL instruments incLude bank term Loans, associated LiabiLities in respect of securitization transactions, non-convertibLe debentures, fixed deposits mobiLized, commerciaL papers, subordinated debts and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Finance costs are charged to the Statement of profit and Loss.

Interest expense on Lease LiabiLities computed by appLying the Company's weighted average incrementaL borrowing rate has been incLuded under finance costs.

2.14    Taxation - Current and deferred tax:

Income tax expense comprises of current tax and deferred tax. It is recognized in Statement of profit and Loss except to the extent that it reLates to an item recognized directLy in equity or in other comprehensive income.

a) Current tax :

Current tax comprises amount of tax payabLe in respect of the taxabLe income or Loss for the year determined in accordance with Income Tax Act, 1961 and any adjustment to the tax payabLe or receivable in respect of previous years. The Company's current tax is caLcuLated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Significant judgments are invoLved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods.

Current tax assets and liabilities are offset only if there is a legacy enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Current tax is recognised in statement of profit or Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current tax is aLso recognised in other comprehensive income or directLy in equity respectiveLy.

The management periodically evaluates positions taken in the tax returns with respect to situations in which appLicabLe tax reguLations are subject to interpretation and estabLishes provisions where appropriate.

b) Deferred tax :

Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases. Deferred tax LiabiLities and assets are measured at the tax rates that are expected to appLy in the period in which the LiabiLity is settLed or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequence that would foLLow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets are recognized to the extent that it is probabLe that future taxabLe income wiLL be avaiLabLe against which the deductibLe temporary difference couLd be utiLized. Such deferred tax assets and LiabiLities are not recognized if the temporary difference arises from the initial recognition of assets and LiabiLities in a transaction that affects neither the taxabLe profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits wiLL be available to alow aLL or part of the asset to be recovered. Deferred tax is recognised in statement of profit or Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the deferred tax is also recognised in other comprehensive income or directly in equity respectiveLy.

Deferred tax assets and liabilities are offset only if there is a legaly enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities on a net basis or simultaneously.

2.15 Provisions, contingent liabilities and contingent assets:

Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of resources embodying economic benefits wiLL be required to settLe the obLigation and there is a reLiabLe estimate of the amount of the obLigation. Provisions are reviewed at each baLance sheet date and adjusted to reflect the current best estimate.

If it is no longer probable that the outflow of resources wouLd be required to settLe the obligation, the provision is reversed. Provisions are not recognised for future operating losses.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision is made. The disclosure of contingent liability is made when there is a possible obligation or present obligation that may, but probably wil not, require an outflow of resources. The Company also discloses present obligation for which a reliable estimate cannot be made as a contingent liability. Contingent Liabilities are reviewed at each Balance Sheet date.

A contingent asset is disclosed where an inflow of economic benefit is probable.

When some or al economic benefits required to settLe a provision are expected to be recovered from third party, a receivable is recognised as an asset, if it is virtuaLLy certain that reimbursement wiLL be received and the amount can be measured reliably.

2.16 Leases :The Company as a lessee -

As a lessee, the Company's lease asset class primarily consist of buildings or part thereof taken on Lease for office premises, certain IT equipments and general purpose office equipments used for operating activities. The Company assesses whether a contract contains a Lease, at inception of a contract. A contract is, or contains, a Lease if the contract conveys the right to controL the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to

controL the use of an identified asset, the Company assesses whether: (i) the contract invoLves the use of an identified asset (ii) the Company has substantially al of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for aLL Lease arrangements in which it is a Lessee, except for Leases with a term of tweLve months or Less (short-term Leases) and Low vaLue Leases. For these short-term and Low vaLue Leases, the Company recognizes the Lease payments as an operating expense on a straight-Line basis over the term of the Lease.

The carrying amount of lease liabilities is remeasured if there is a modification, a change in the Lease term, a change in the Lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such Lease payments) or a change in the assessment of an option to purchase the underLying asset. ROU assets and corresponding Lease LiabiLities constitute Lease contracts for office premises.

Certain Lease arrangements incLudes the options to extend or terminate the Lease before the end of the Lease term. ROU assets and Lease LiabiLities incLudes these options when it is reasonabLy certain that option to extend wiLL be exercised and option to terminate wiLL not be exercised.

The Right-of-use assets are initially recognized at cost which comprises of initiaL amount of Lease LiabiLity adjusted for any Lease payments made at or prior to the commencement date of the lease less any lease incentives. These are subsequentLy measured at cost Less accumuLated depreciation and impairment Losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-Line basis over the Lease term.

The Lease LiabiLity is initiaLLy measured at amortized cost at the present vaLue of the future Lease payments that are not paid at the commencement date, discounted using the

Company's incremental average borrowing rate. Lease Liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment of whether it wiLL exercise an extension or a termination option.

I n the BaLance Sheet, ROU assets have been incLuded in Property, PLant and Equipment and Lease LiabiLities have been incLuded in Other financiaL Liabilities and the principaL portion of Lease payments have been classified as financing cash flows. The Company has used a singLe discount rate to a portfoLio of Leases with simiLar characteristics.

Where the Company is the lessor -

At the inception of the Lease, the Company classifies each of its leases as either a finance Lease or an operating Lease. Whenever the terms of the Lease transfer substantiaLLy aLL the risks and rewards of ownership to the Lessee, the contract is classified as a finance lease. aLL other Leases are classified as operating Leases.

The Company has given certain vehicLes on Lease where it has substantiaLLy retained the risks and rewards of ownership and hence these are classified as operating Leases. These assets given on operating Lease are incLuded in PPE. Lease income is recognized in the Statement of profit and Loss as per contractual rentaL unLess another systematic basis is more representative of the time pattern in which the benefit derived from the Leased asset is diminished. Costs incLuding depreciation are recognized as an expense in the Statement of profit and Loss. Initial direct costs are recognized immediately in Statement of profit and Loss.

In case of assets under Finance Lease, amount receivabLe from Lessees are recognised at the net investment in the Leases measured by using the interest rate impLicit in the Lease contract. ALL initiaL direct cost incurred to put

the Leased asset for intended use are incLuded in the initiaL measurement of net investment.

I n accordance with Ind AS 116, Leases, the financiaL information has been presented in the foLLowing manner.

a)    ROU assets and Lease LiabiLities have been incLuded within the Line items "Property, PLant and Equipment" and "Other financiaL LiabiLities" respectively in the BaLance sheet;

b)    Interest expenses on the Lease LiabiLity and depreciation charge for the right-to-use asset have been incLuded within the Line items "Finance costs" and "Depreciation, amortization and impairment" respectiveLy in the statement of profit or Loss;

c)    Short-term Lease payments and payments for Leases of Low-vaLue assets, where exemption as permitted under this standard is avaiLed, have been recognized as expense on a straight Line basis over the Lease term in the statement of profit or Loss.

d)    Cash payments for the principaL and interest of the Lease LiabiLity have been presented within "financing activities" in the statement of cash flows;

The disclosures as required in accordance with Ind AS 116, Leases, are set out under note no. 40.

2.17 New standards or amendments to the existing standards and other pronouncements :

Ministry of Corporate Affairs ("MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) RuLes as issued from time to time. As on 31^st March 2025, there is no new standard notified or amendment to any of the existing standards under Companies (Indian Accounting Standards) RuLes, 2015.