2.11 Provisions

Provisions are recognized when the Company has
a present obligation (legal or constructive) because
of past events, and it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation, and a reliable
estimate can be made of the amount of the
obligation. When the effect of the time value of
money is material, the Company determines the
level of provision by discounting the expected cash
flow at a pre-tax rate reflecting the current rates
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
is recognized as a finance cost. The expense relating
to any provision is presented in the Statement of
profit and loss net of any reimbursement.

2.12 Share issue expenses

Incremental costs that are directly attributable to
the issue of an equity instrument (i.e. they would
have been avoided if the instrument had not been
issued) are deducted from securities premium.

2.13 Taxes2.13.1 Current tax

Current tax assets and liabilities for the current and
prior years are measured at the amount expected
to be recovered from, or paid to, the taxation
authorities. It is computed using tax rates and
tax laws enacted or substantively enacted at the
reporting date.

Current income tax relating to items recognized
outside profit or loss is recognized outside profit
or loss (either in other comprehensive income

or in equity). Current tax items are recognized in
correlation to the underlying transaction either in
OCI or directly in equity. 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.

Current tax assets and liabilities are offset only if the
Company:

• has a legally enforceable right to set off the
recognized amounts; and

• intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.

2.13.2 Deferred tax

Deferred tax is provided using the balance sheet
approach on temporary differences between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.

Deferred tax liabilities are recognized for all taxable
temporary differences, except:

• Where the deferred tax liability arises from the
initial recognition of goodwill or of an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss.

• In respect of taxable temporary differences
associated with investments in subsidiaries,
where the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future.

Deferred tax assets are recognized for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognized to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses
can be utilised Deferred tax assets are reviewed at
each reporting date and are reduced to the extent
that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the
deferred tax asset to be utilized.

Unrecognized deferred tax assets are reassessed at
each reporting date and recognized to the extent
that it has become probable that future taxable
profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled,
using tax rates (and tax laws) that have enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognized outside
profit or loss is recognized outside profit or loss
(either in other comprehensive income or in equity).
Deferred tax items are recognized in correlation to
the underlying transaction either in OCI or directly
in equity.

Deferred tax assets and liabilities are offset only if:

• the entity has a legally 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 the same taxable
entity.

2.13.3 Goods and services tax /value added taxes paid
on acquisition of assets or on incurring expenses

Expenses and assets are recognized net of the
goods and services tax/value added taxes paid,
except:

• When the tax incurred on a purchase of
assets or services is not recoverable from the
taxation authority, in which case, the tax paid
is recognized as part of the cost of acquisition
of the asset or as part of the expense item, as
applicable

• When receivables and payables are stated with
the amount of tax included

The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of
receivables or payables in the Balance sheet.

2.14 Earnings per share

The Company reports basic and diluted earnings
per share in accordance with Ind AS 33 on Earnings
per share. Basic earnings per share are calculated by
dividing the net profit or loss for the year attributable

to equity shareholders by the weighted average
number of equities shares outstanding during the
period. Partly paid equity shares are treated as a
fraction of an equity share to the extent that they
are entitled to participate in dividends relative to a
fully paid equity share during the reporting year.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effects of all potential dilutive
equity shares. Dilutive potential equity shares are
deemed converted as of the beginning of the period,
unless they are issued at a later date. In computing
the dilutive earnings per share, only potential equity
shares that are dilutive and that either reduces the
earnings per share or increases loss per share are
included.

The weighed average number of ordinary shares
outstanding during the period and for all periods
presented shall be adjusted for events, other than
the conversion of potential ordinary shares, that have
changed the number of ordinary shares outstanding
without a corresponding change in resources.

2.15 Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to the
Chief Operating Decision Maker.

The MD and CEO of the Company has been identified
as the Chief Operating Decision Maker for the
Company.

2.16 Contingent Liabilities and Contingent Assets

A Contingent Liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the
control of the Company or a present obligation that
is not recognized because it is not probable that an
outflow of resources will be required to settle the
obligation. Contingent liability also arises in extremely
rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably.
The Company does not recognize a contingent
liability but discloses its existence in the financial
statements.

A contingent asset is a possible asset that arises from

past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the
control of the entity. Contingent assets are disclosed,
where an inflow of economic benefits are probable.
The Company shall not recognise a contingent asset
unless the recovery is virtually certain.

2.17 Treasury Shares

The Company has created an Employee Benefit
Trust (EBT) for providing share-based payment to
its employees. The Company uses EBT as a vehicle
for distributing shares to employees under the
employee stock option schemes.

Own equity instruments that are reacquired (treasury
shares) are recognized at cost and deducted from
equity. No gain or loss is recognized in profit or
loss on the purchase, sale, issue or cancellation
of the Company's own equity instruments. Any
difference between the carrying amount and
the consideration, if reissued, is recognized in
capital reserve. Share options exercised during the
reporting period are satisfied with treasury shares.

2.18 Critical accounting judgements, estimates and
assumptions

The preparation of financial statements requires
the management to make judgments, estimates
and assumptions that affect the reported amounts
of assets, liabilities, revenue and expenses and the
accompanying disclosures, as well as the disclosure
of contingent liabilities, at the end of the reporting
period. Estimates and underlying assumptions
are reviewed on an ongoing basis. Although
these estimates are based on the management's
best knowledge of current events and actions,
uncertainty about these assumptions and estimates
could result in the outcomes requiring a material
adjustment to the carrying amounts of assets or
liabilities affected in future periods

Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to estimates are
recognized prospectively.

In particular, information about significant areas of
estimation, uncertainty and critical judgments in
applying accounting policies that have the most
significant effect on the amounts recognized in the
financial statements is included in the following notes:

Business model assessment

Classification and measurement of financial
assets depend on the results of the SPPI and the
business model test. The Company determines the
business model at a level that reflects how groups
of financial assets are managed together to achieve
a particular business objective. This assessment
includes judgement reflecting all relevant evidence
including how the performance of the assets is
evaluated and their performance measured, the
risks that affect the performance of the assets and
how these are managed. The Company monitors
financial assets measured at amortized cost or fair
value through other comprehensive income that are
derecognized prior to their maturity to understand
the reason for their disposal and whether the
reasons are consistent with the objective of the
business for which the asset was held. Monitoring
is part of the Company's continuous assessment
of whether the business model for which the
remaining financial assets are held continues to
be appropriate and if it is not appropriate whether
there has been a change in business model and so
a prospective change to the classification of those
assets.

Fair value of financial instrument

The fair value of financial instruments is the price
that would be received to sell an asset or paid
to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at
the measurement date under current market
conditions (i.e., an exit price) regardless of whether
that price is directly observable or estimated
using another valuation technique. When the fair
values of financial assets and financial liabilities
recorded in the balance sheet cannot be derived
from active markets, they are determined using a
variety of valuation techniques that include the use
of valuation models. The inputs to these models are
taken from observable markets where possible, but
where this is not feasible, estimation is required in
establishing fair values. Judgements and estimates
include considerations of liquidity and model
inputs related to items such as credit risk (both
own and counterparty), funding value adjustments,
correlation and volatility.

Impairment of financial asset

Judgment is required by management in the
estimation of the amount and timing of future cash

flows when determining an impairment allowance
on financial assets. In estimating these cash
flows, the Company makes judgments about the
borrower's financial situation. These estimates are
based on assumptions about a number of factors
such as credit quality, level of arrears etc. and actual
results may differ, resulting in future changes to the
impairment allowance.

Share Based Payment

Estimating fair value for share-based payment
transactions requires determining of the most
appropriate valuation model, which is dependent
on the terms and conditions of the grant. This
estimate also requires determination of the most
appropriate inputs to the valuation model including
the expected life of the share option, volatility and
dividend yield and making assumptions about
them.

Defined employee benefit assets and liabilities

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 highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting
date.

2.19 Hedging

The Company makes use of derivative instruments
to manage exposures to interest rate and foreign
currency. In order to manage particular risks, the
Company applies hedge accounting for transactions
that meet specified criteria.

At the inception of a hedge relationship, the
Company formally designates and documents the
hedge relationship to which the Company wishes to
apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.
The documentation includes the Company's risk
management objective and strategy for undertaking
hedge, the hedging/ economic relationship, the
hedged item or transaction, the nature of the risk
being hedged, hedge ratio and how the entity will
assess the effectiveness of changes in the hedging

instrument's fair value in offsetting the exposure
to changes in the hedged item's fair value or cash
flows attributable to the hedged risk. Such hedges
are expected to be highly effective in achieving
offsetting changes in fair value or cash flows and
are assessed on an ongoing basis to determine
that they have been highly effective throughout
the financial reporting periods for which they were
designated.

Hedges that meet the strict criteria for hedge
accounting are accounted for, as described below:

Fair Value Hedge

Fair value hedges hedge the exposure to changes
in the fair value of a recognised asset or liability
or an unrecognised firm commitment, or an
identified portion of such an asset, liability or firm
commitment, that is attributable to a particular risk
and could affect profit or loss.

For designated and qualifying fair value hedges,
the cumulative change in the fair value of a
hedging derivative is recognised in the statement
of profit and loss in net gain on fair value changes.
Meanwhile, the cumulative change in the fair
value of the hedged item attributable to the risk
hedged is recorded as part of the carrying value of
the hedged item in the balance sheet and is also
recognised in the statement of profit and loss in net
gain on fair value changes.

The Company classifies a fair value hedge
relationship when the hedged item (or group of
items) is a distinctively identifiable asset or liability
hedged by one or a few hedging instruments. The
financial instruments hedged for interest rate risk
in a fair value hedge relationships fixed rate debt
issued and other borrowed funds.

Cash Flow Hedge

A cash flow hedge is a hedge of the exposure to
variability in cash flows that is attributable to a
particular risk associated with a recognised asset or
liability (such as all or some future interest payments
on variable rate debt) or a highly probable forecast
transaction and could affect profit or loss.

For designated and qualifying cash flow hedges,
the effective portion of the cumulative gain or loss
on the hedging instrument is initially recognised
directly in OCI within equity (cash flow hedge
reserve). The ineffective portion of the gain or loss on

the hedging instrument is recognised immediately
in the profit and loss statement.

When the hedged cash flow affects the statement
of profit and loss, the effective portion of the gain
or loss on the hedging instrument is recorded in
the corresponding income or expense line of the
statement of profit and loss. When the forecast
transaction subsequently results in the recognition
of a non-financial asset or a non-financial liability,
the gains and losses previously recognised in OCI
are reversed and included in the initial cost of the
asset or liability.

When a hedging instrument expires, is sold,
terminated, exercised, or when a hedge no longer
meets the criteria for hedge accounting, any
cumulative gain or loss that has been recognised in
OCI at that time re-mains in OCI and is recognised
when the hedged forecast transaction is ultimately
recognised in the statement of profit and loss.
When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was
reported in OCI is immediately transferred to the
statement of profit and Loss.

2.20 New standards, interpretations, and
amendments:

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. As at the date
of authorisation of these financial statements,
the Company has not applied the following new
amendment to Ind AS that has been issued but is
not yet effective:

Ind AS 1, Presentation of Financial Statements:

Where a covenant breach exists on or before the
reporting date and, as a result, the liability becomes
payable on demand on that date, the liability
must be classified as current, even if the lender
subsequently (i.e. after the reporting date but
before approval of the financial statements) agrees
not to demand payment.

The Company does not expect that the adoption of
this amendment to have any material impact on the
financial statements of the Company in future periods.
However, in case of breach of covenants in future, the
liability for long-term borrowings will be classified as
current and will become repayable on demand.

# Cash Flow Hedge:

“The Company hedges foreign currency risk arising from its floating rate foreign currency borrowings by entering into the
swap contract. There is an economic relationship between the hedged item and the hedging instrument as the terms
of the contract matches that of the foreign currency borrowing. The Company has established a hedge ratio of 1:1 for the
hedging relationships as the underlying risk of the contracts are identical to the hedged risk component.

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 the heading cash flow hedge reserve within equity.
The gain or loss relating to the ineffective portion is recognised immediately in the statement of profit and loss.

b. Rights, preferences and restrictions attached to equity shares :

The Company has single class of equity shares having par value of ' 10 each (comprising 16,20,82,277 fully paid up
Equity Shares of face value of ' 10 each having paid-up value of ' 10 each except 3,92,088 on which call money in
arrears). The holder of the equity share is entitled to dividend right and voting right in the same proportion as the
capital paid-up on such equity share bears to the total paid up equity share capital of the Company. In the event of
liquidation of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company,
after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.

* With reference to the special resolution passed by the shareholders dated April 23, 2025, the Company may grant and
allot 5,000,000 equity shares of the Company to certain identified employees.

f. No share was allotted without payment being received in cash during the year ended March 31, 2026 and year ended
March 31, 2025.

g. Pursuant to the Board of Directors approval dated December 04, 2024 for issue of equity shares by way of Rights Issue
(“Rights Issue”) for an amount of ' 799.86 crore, the Company had filed Letter of Offer on March 29, 2025. The issue
opened for subscription on April 15, 2025 and closed on April 25, 2025.

Nature and purpose of other reserve :

Statutory reserve

The said reserve has been created under section 45-IC of Reserve Bank of India Act, 1934. As per the said section, every
Non-banking financial Company shall create a reserve fund and transfer a sum of not less than 20% of net profit every
year before declaration of dividend.

Securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the
provisions of the Companies Act, 2013.

Treasury Shares

Treasury shares represents shares held by ESOP trust. The Company treats ESOP trust as its extension and shares held by
ESOP trust are treated as treasury shares. Treasury share amount (excluding amount adjusted from equity share capital)
are recognized under this head. Exercise price received on equity share issued in excess of face value of share capital
against share option exercised are adjusted from treasury shares.

Retained Earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to statutory
reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company
and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date.

Employee stock option plan reserve

The said amount is used to recognise the grant date fair value of options issued to employees by the Company.

Other Comprehensive Income/(loss)

Remeasurement gains on defined benefit plans

Remeasurements of defined benefit plans represents the following as per Ind AS 19, Employee Benefits:

(a) actuarial gains and losses on defined benefit obligations

(b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and

(c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit
liability (asset).

Cash Flow Hedge Reserve

For designated and qualifying cash flow hedges, the effective portion of the cumulative gain or loss on the hedging
instrument is initially recognised directly in OCI within equity (cash flow hedge reserve). When the hedged cash flow
affects the statement of profit and loss, the effective portion of the gain or loss on the hedging instrument is recorded in
the corresponding income or expense line of the statement of profit and loss.

(g) Description of risk exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework
which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit
which are as follows:

Interest rate risk : The plan exposes the Company to the risk of fall in interest rate. A fall in interest rate will result
in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of
liability.

Liquidity Risk : This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise
due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being
sold in time.

Salary Escalation Risk : The present value of the defined benefit plan is calculated with the assumption of salary
increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants
from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's
liability.

Investment risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.

Demographic Risk : The Company has used certain mortality and attrition assumptions in valuation of the liability.
The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk : Gratuity benefit is paid in accordance with the requirements of Code on Social Security, 2020 (as
amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase
in the maximum limit on gratuity of ' 20,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liabilty is longer compared to duration of assets,
exposing the Company to market risk for volatilities/fall in interest rate.

iii Compensated absences

The Company provides compensated absences benefits to the employees of the Company which can be carried
forward to future periods. Amount recognised in the Statement of profit and loss for compensated absences is as
under-

iv On November 21, 2025, the Government of India notified the four Labour Codes-the Code on Wages, 2019; the
Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working
Conditions Code, 2020 (collectively, the “New Labour Codes”) consolidating twenty-nine existing labour laws into a
unified framework. Subsequently, on December 30, 2025, the Ministry of Labour & Employment issued draft Central
Rules and FAQs to facilitate assessment of the financial impact of these regulatory changes. Based on the best
information currently available, the Company has assessed the incremental financial implications, resulting in an
increase in gratuity liability due to past service cost of ' 4.78 crore and an increase in leave liability of ' 2.13 crore and
the same has been recognized under the head “Employee benefit expenses” for the year ended March 31, 2026. The
Company continues to monitor the finalisation of Central and State Rules, as well as further clarifications from the
Government, and will evaluate and reflect any additional impact in its books of accounts as appropriate.

44 Share based compensation

A. Description of share-based payment arrangements

i. Share option programme (equity settled)

The Company has granted stock options to certain employees of the Company under the 'Employee Stock Option
Scheme 2016' (Scheme 2016) and 'Employee Stock Option Scheme 2023' (Scheme 2023). The key terms and conditions
related to the grant of the stock options are as follows:

a) The ESOP Scheme 2016 is effective form January 16, 2017 and is administered through a ESOP Trust (Fusion Employees
Benefit Trust). The ESOP Scheme 2023 has been approved by the members by passing special resolution dated 26th
March 2023 and is administrated through a ESOP Trust (Fusion Employees Benefit Trust).

b) The scheme provides that, subject to continued employment with the Company, the employees are granted an
option to acquire equity shares of the Company that may be exercised within a specified period.

c) The Company has formed Fusion ESOP Trust on September 27, 2014 to issue ESOPs to employees of the Company
as per the respective scheme. The Company has given interest and collateral free loan to the ESOP trust, to provide
financial assistance to purchase equity shares of the Company under such schemes. The Trust in turn allots the shares
to employees on exercise of their right against cash consideration.

d) As on March 31, 2026, the ESOP trust have 3,65,940 equity shares, (March 31, 2025: 3,70,180). The ESOP Trust does not
have any transaction other than those mentioned above, hence it is treated as an integral part of the Company and
accordingly gets consolidated with the books of the Company. As at March 31, 2026, the Company has reduced the
shares allotted to ESOP Trust amounting ' 0.37 crore (March 31, 2025: ' 0.37 crore) from the share capital and ' 10.70
crore (March 31, 2025: ' 10.82 crore) from the share premium. These are shown as treasury shares.

e) The eligible employees shall exercise their option to acquire the shares of the Company within a period of eight years
from the end of vesting period. The plan shall be administered, supervised and implemented by the board.

*The managerial remuneration paid to the Managing Director of the Company for the previous financial year exceeds the
prescribed limits under Section 197 read with Schedule V to the Companies Act, 2013. As per the provision of the act, the
excess amount is subject to approval of the shareholders. The Company has obtained the requisite approval for previous
financial year along with the current financial year in its Annual General Meeting held on July 22, 2025.

# During the year ended March 31, 2026. the Company has reversed share based compensation expenses related to
unvested stock options due to resignation of key managerial personnel.

Terms and conditions

All transactions with these related parties are priced on an arm's length basis and at normal commercial terms.

As the provision for gratuity and leave compensation is made for the Company as a whole, the amount pertaining to
the Key Management Personnel is not specifically identified and hence is not included above. The above remuneration
details are in the nature of short term benefits.

The management assessed that carrying value of financial
assets (other than loans) and financial liabilities (other than
debt securities, borrowings (other than debt securities)
and subordinated liabilities) approximate their fair value
largely due to short term maturities of these instruments.

There were no transfers between Level 3 and Level 1 / Level
2 during the current year and previous year.

The management assessed that carrying value of financial
assets (other than loans) and financial liabilities (other than
debt securities, borrowings (other than debt securities)
and subordinated liabilities) approximate their fair value
largely due to short term maturities of these instruments.

C. Valuation framework

The objective of valuation techniques is to arrive at
a fair value measurement that reflects the price that
would be received to sell the asset or paid to transfer
the liability in an orderly transaction between market
participants at the measurement date.

The Company measures fair values using the following
fair value hierarchy, which reflects the significance of
the inputs used in making the measurements.

Level 1: Inputs that are quoted market prices
(unadjusted) in active markets for identical assets or
liabilities.

Level 2 : The fair value of financial instruments that
are not traded in active markets is determined using
valuation techniques which maximize the use of
observable market data either directly or indirectly,
such as quoted prices for similar assets and liabilities
in active markets, for substantially the full term of
the financial instrument but do not qualify as Level 1
inputs. If all significant inputs required to fair value an
instrument are observable the instrument is included
in level 2.

Level 3 : If one or more of the significant inputs is not
based in observable market data, the instruments is
included in level 3. That is, Level 3 inputs incorporate
market participants' assumptions about risk and
the risk premium required by market participants in
order to bear that risk. The Company develops Level 3
inputs based on the best information available in the
circumstances.

Valuation methodologies of financial instruments

Loans (measured at amortised cost)

The fair values of loans and receivables are estimated
by discounted cash flow models that incorporate
assumptions for credit risks, probability of default
and loss given default estimates. The Company uses
historical experience and other information used
in its collective impairment models. The credit risk

is applied as a top-side adjustment based on the
collective impairment model incorporating probability
of defaults and loss given defaults. The Company has
considered carrying amount ofloans net of impairment
loss allowance is of reasonable approximation of their
fair value.

Debt Securities, Borrowings and Subordinated
liablities (measured at amortised cost)

The fair values of the Company's fixed rate interest¬
bearing debt securities, borrowings and subordinated
liabilities are determined by applying discount rate
that reflects the issuer's borrowing rate as at the end of
the reporting period. For variable rate interest-bearing
debt securities, borrowings and subordinated liabilities,
carrying value represent best estimate of their fair value
as these are subject to changes in underlying interest
rate indices as and when the changes happen.

Derivative financial instrument

The Company has entered into derivative financial
instruments with counterparty being a financial
institution with investment grade credit ratings.
Currency and Interest rate swaps are valued using
valuation techniques, which employs the use of
market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap
models, using present value calculations. The models
incorporate various inputs including the credit quality
of counterparties, foreign exchange spot and forward
rates, yield curves of the respective currencies, currency
basis spreads between the respective currencies and
interest rate curves. As at March 31, 2026, the mark-to-
market value of derivative liability position is net of a
credit valuation adjustment attributable to derivative
counterparty default risk.

Investments

The Company has measured investments based on
market value i.e. NAV as at reporting date.

47 Transfers of financial assets

A. Transfer of financial assets that are not derecognised
in their entirety:

The Company generally enters into securitization
arrangement with various parties wherein, the
Company has transferred a pool of loan portfolio. The
Company, being originator of these loan receivables,
also acts as servicer with a responsibility of collection
of receivables from its borrowers. These securitisation
transactions also requires the Company to provide for
first loss credit enhancement in various forms such as
fixed deposits and book debts as credit support in the
event of shortfall in collections from underlying loan
contracts. By virtue of existence of credit enhancement,

48 Financial risk management
Introduction risk profile

Risk is an integral part of the Company's business and
sound risk management is critical to the success. As a
financial intermediary, the Company is exposed to risks
that are particular to its lending and the environment
within which it operates and primarily includes credit,
liquidity and market risks. The Company has a risk
management policy which covers risks associated with
the financial assets and liabilities. The risk management
policy is approved by the Board of directors.

Risk management framework

As a lending institution, the Company is exposed to
various risks that are related to lending business and
operating envirounment. The Company's board of
directors has overall responsibility for the establishment
and oversight of the Company's risk management
framework. The Board of directors has established the
risk management committee, which is responsible
for developing and monitoring the Company's risk
management policies. The committee reports regularly
to the board of directors on its activities.

The Company's risk management policies are
established to identify and analyse the risks faced
by the Company, to set appropriate risk limits and
controls and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and
the Company's activities. The Company, through its
training and management standards and procedures,
aims to maintain a disciplined and constructive control
environment in which all employees understand their
roles and obligations.

The Company's audit committee oversees how
management monitors compliance with the
Company's risk management policies and procedures,
and reviews the adequacy of the risk management
framework in relation to the risks faced by the Company.
The audit committee is assisted in its oversight role
by internal audit that undertakes both regular and
ad hoc reviews of risk management controls and
procedures, the results of which are reported to the
audit committee.

A. Credit risk

All derivative activities for risk management purposes
are carried out by specialist teams that have the
appropriate skills, experience and supervision. It is
the Company's policy that no trading in derivatives
for speculative purposes may be undertaken. Credit
risk arising from derivative financial instruments
is, at any time, limited to those with positive fair
values, as recorded on the balance sheet. As per risk

management policy of the Company, it only deals
with counterparties, which has good credit rating/
worthiness given by external rating agencies or based
on Company's internal assessment. The Board of
Directors reviews and agrees policies for managing
each of these risks, which are summarised below:

Credit risk is the risk of loss that may occur from
defaults by our borrowers under our loan agreements.
In order to address credit risk, we have stringent credit
assessment policies for client selection. Measures such
as verifying client details and usage of credit bureau
data to get information on past credit behaviour also
supplement the efforts for containing credit risk. We
also follow a systematic methodology in the opening
of new branches, which takes into account factors
such as the demand for credit in the area; income and
market potential; and socio-economic and law and
order risks in the proposed area. Further, our client
due diligence procedures encompass various layers of
checks, designed to assess the quality of the proposed
group and to confirm that they meet our criteria.

The Company's exposure to credit risk is influenced
mainly by the individual characteristics of each
customer. However, management also considers the
factors that may influence the credit risk of its customer
base, including the default risk associated with the
industry. A financial asset is 'credit-impaired' when
one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset
have occurred. Evidence that a financial asset is credit-
impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or past due
event.

The Company believes that the Micro finance
loans (MFI) have shared risk characteristics (i.e.
homogeneous) across various states in India. Similarly,
the MSME loans are considered to have shared risk
characteristics. Accordingly, the Company believes
that these product categories are the best measure of
credit risk concentration. Refer note 6 for the product
wise loan balances.

(a) Probability of default (PD)

PD describes the probability of a loan to eventually
falling into stage 3. PD percentage is calculated for
entire loan portfolio and is determined by using
available historical observations.

PD for stage 1: is derived as percentage of all loans in
stage 1 moving into stage 3 in 12-months' time.

PD for stage 2: is derived as percentage of all loans in
stage 2 moving into stage 3 in the maximum lifetime

of the loans under observation. Marginal PD is used in
case cash flows/ repayment schedule is available, else
cumulative PD is used.

PD for stage 3: is derived as 100% considering that the
default occurs as soon as the loan becomes overdue for
90 days which matches the definition of stage 3.

Macroeconomic information (such as agriculture, real
GDP, consumer prices, domestic demand, inflation,
etc.) is incorporated as part of the internal assessment
. In general, it is presumed that credit risk has
significantly increased since initial recognition if the
payments are more than 30 days past due.

(b) Exposure at default (EAD)

EAD is the sum of outstanding principal and the
interest amount accrued but not received on each
loan as at reporting date.

(c) Loss given default (LGD)

The Company determines its recovery rates by analysing
the recovery trends over different periods of time after
a loan is considered credit impaired. Recovery rate
is the total of discounted value of all the recoveries
on the credit impaired loan account divided by the
outstanding of the loan account after its first default.
LGD = 1 - (Recovery rate).

(d) Discounting factor (Df)

The discounting factor is computed using the effective
interest rate (EIR) for the portfolio.

(e) Significant increase in credit risk

The Company continuously monitors all assets subject
to ECL. In order to determine whether an instrument
or a portfolio of instruments is subject to 12 months
ECL or life time ECL, the Company assesses whether
there has been a significant increase in credit risk since
initial recognition. Regardless of the change in credit
grades, if contractual payments are more than 30 days
past due, the credit risk is deemed to have increased
significantly since initial recognition.

(f) Expected credit loss on Loans

The Company measures the amount of ECL on a
financial instrument in a way that reflects an unbiased
and probability-weighted amount. The Company
considers its historical loss experience and adjusts the
same for current observable data. The key inputs into
the measurement of ECL are the probability of default,
loss given default and exposure at default. These
parameters are derived from the internal assessment
of the historical data. In addition, the Company uses
reasonable and supportable information on future
economic conditions including macroeconomic
factors such as interest rates, gross domestic product,

inflation and expected direction of the economic cycle.
Since incorporating these forward looking information
increases the judgment as to how the changes in
these macroeconomic factor will affect ECL, the
methodology and assumptions are reviewed regularly.

The Company has applied a three-stage approach to
measure expected credit losses (ECL) on loans. Assets
migrate through following three stages based on the
changes in credit quality since initial recognition:

i) Stage 1: 12- months ECL: For exposures where there
is no significant increase in credit risk since initial
recognition and that are not credit-impaired upon
origination, the portion of the lifetime ECL associated
with the probability of default events occurring within
the next 12- months is recognized.

ii) Stage 2: Lifetime ECL, not credit-impaired: For credit
exposures where there has been a significant increase
in credit risk since initial recognition but are not credit-
impaired, a lifetime ECL is recognized.

iii) Stage 3: Lifetime ECL, credit-impaired: Financial
assets are assessed as credit impaired upon occurrence
of one or more events that have a detrimental impact
on the estimated future cash flows of that asset. For
financial assets that have become credit-impaired,
a lifetime ECL is recognized and interest revenue is
calculated by applying the effective interest rate to the
amortised cost.

At each reporting date, the Company assesses whether
there has been a significant increase in credit risk of its
financial assets since initial recognition by comparing
the risk of default occurring over the expected life of the
asset. In determining whether credit risk has increased
significantly since initial recognition, the Company
uses information that is relevant and available without
undue cost or effort. This includes the Company's
internal assessment and forward-looking information
to assess deterioration in credit quality of a financial
asset.

Expected credit loss on other financial assets

The Company assesses whether the credit risk on a
financial asset has increased significantly on collective
basis. For the purpose of collective evaluation of
impairment, financial assets are grouped on the basis
of shared credit risk characteristics, taking into account
accounting instrument type, credit risk ratings, date of
initial recognition, remaining term to maturity, industry,
geographical location of the borrower, collateral type,
and other relevant factors.

The Company monitors changes in credit risk by
tracking published external credit ratings. In order

are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking
damage to the Company's reputation.

The maturity schedule for all financial liabilities and
assets are regularly reviewed and monitored. Company
has assets liability management (ALM) policy and
ALM Committee to review and monitor liquidity
risk and ensure the compliance with the prescribed
regulatory requirement. Monitoring liquidity risk
involves categorizing all assets and liabilities into
different maturity profiles and evaluating them for any
mismatches in any particular maturities, particularly in
the short-term. The ALM Policy prescribes the detailed
guidelines for managing the liquidity risk.

50 Market risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market
variables such as interest rates, credit, liquidity etc. The Company is exposed to three type's of market risks as follow:

(i) Interest rate risk

Interest rate risk is the risk that might adversely affect the financial position of the Company because of changes in
market interest rates. The Company subject to interest rate risk, principally because the Company lend to clients at
fixed interest rates and for periods that may differ from our funding sources, while our borrowings are at both fixed
and variable interest rates for different periods. The immediate impact of change in the interest rates is on earnings
(i.e. reported profits) by changing its Net Interest Margin (NIM).

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and
borrowings.

The following table demonstrates the sensitivity to a reasonably possible change in the interest rates on the portion
of borrowings affected. With all other variables held constant, the profit before tax is affected through the impact on
floating rate borrowings, as follows:

(ii) Price Risk

The Company's exposure to price risk is not material and it is primarily on account of investment of temporary treasury
surplus in the highly liquid debt funds for very short durations. To manage its price risk arising from investments in
quoted mutual funds, the Company periodically monitors the sectors it has invested in, performance of the investee
companies and measures mark-to-market gains/(losses). As of March 31, 2026, the company has exposure to mutual
fund ' 2.06 Crore (March 31, 2025 : ' 2.07 Crore).

(iii)Foreign currency risk

The Company is exposed to foreign exchange risk
arising from foreign currency transactions. Foreign
exchange risk arises from recognized assets and
liabilities denominated in a currency that is not the
functional currency of the Company. Currency risk is
the risk that the value of a financial instrument will
fluctuate due to changes in foreign exchange rates. To
mitigate the Company's exposure to foreign currency
risk, derivative contracts are entered into in accordance
with the Company's risk management policies. The
Company manages its foreign currency risk by entering
into cross currency swaps. When a derivative is
entered in to for the purpose of being as hedge, the
Company negotiates the terms of those derivatives
to match with the terms of the hedge exposure.

For hedges of forecasted transactions, the derivatives
cover the period of exposure from the point the
cash flows of the transactions are forecasted up to
the point of settlement of the resulting receivable or
payable that is denominated in the foreign currency.

The Company hedges its exposure to fluctuations
on the translation into INR of its foreign currency
transactions by using foreign currency swaps and
forwards. At March 31, 2026, the Company hedged 100%
(March 31, 2025: 100%), for entire term of borrowing,
of its expected interest and principle repayments on
External commercial borrowings. This foreign currency
risk is hedged by using cross currency swaps

C. Contingent assets

There are no contingent assets as at March 31, 2026 and March 31, 2025.

D. The Company has reviewed all litigations having an impact on the financial position, where applicable, has adequately
provided for where provision are required . As on March 31, 2026, the Company does not have any litigations pending
with Income tax authorities, Goods and service authorities and other statutory authorities in the ordinary course of
business requiring any provision to be provided in books of accounts.

E. The Company did not have any long term contract including derivative contract for which there were any material
foreseeable losses.

54 Leases

Company as a lessee

The Company has created right of use assets and lease liabilities on account of building and vehicle taken on lease as per
IND AS 116. The terms of the leases ranges from 2 years to 9 years. The Company has branch offices on lease for which
'short term lease' recognition exemption is applied. Accordingly, lease rentals of ' 31.48 crore for year ended March 31,
2026 (' 30.22 crore for the year ended March 31, 2025) on such short term leases has been directly charged to Statement
of profit and loss.

(vi) Institutional set-up for liquidity risk management

The Board of Directors has the overall responsibility for establishing the risk management framework for the Company.
The Board in turn has established an ALM Committee (ALCO) for evaluating, monitoring and reviewing liquidity and
interest rate risks arising in the Company on both sides of the Balance sheet. The Board based on recommendations
from the ALCO has prescribed policies and the risk limits for the management of liquidity risk.

ALCO Committee is responsible for managing the risks arising out of Asset Liability mismatches consistent with
the regulatory requirements and internal risk tolerances established by the Board. Amongst other responsibilities,
ALCO has been empowered to decide the funding mix for the company in light of the future business strategy and
prevailing market conditions. ALCO committee is conducted at least once in a quarter and the ALCO minutes are
reviewed by the Board from time to time.

*Notes

1. A “significant counterparty” is defined as a single counterparty or group of connected or affiliated counterparties

accounting in aggregate for more than 1% of the NBFC-NDSI's, NBFC-Ds total liabilities and 10% for other non-deposit
taking NBFC.

2. A “significant instrument/product” is defined as a single instrument/ product of group of similar instruments/products

which in aggregate amount to more than 1% of the NBFC-NDSI's, NBFC-Ds total liabilities and 10% for other non¬
deposit taking NBFC's.

3. Total Liabilities has been computed as sum of all liabilities (Balance sheet figure) less equities and reserve/surplus.

4. “Public Funds” shall include funds raised either directly or indirectly through public deposits, commercial paper,
debentures, inter-corporate deposits and bank finance but exclude funds raised by issue of instruments compulsory
convertible into equity shares with in a period not exceeding 5 years from the date of issue as defined in Regulatory
Framework.

5. The amount stated in this disclosure is based on the audited financial statements for the year ended March 31, 2026.

*The Company has obtained extension for said breaches from lenders whose borrowings as of March 31, 2026'37.95
crore. As a result, no demand for immediate repayment is anticipated until the extended date from these lenders.
The Company is in discussion with the remaining lenders to obtain similar extensions and no demand for immediate
repayment of borrowed fund is made by lenders to date.

ab. Divergence in Asset Classification and Provisioning

There was no instances of divergence in Assets Classification and Provisioning norms identified by RBI which is
required to be disclosed as per RBI Directions for the year ended March 31, 2026 (March 31, 2025 : Nil)

56 “(i) Details of resolution plan implemented under the Resolution Framework for COVID-19-related stress as per RBI
circular dated August 6, 2020 (Resolution Framework 1.0) are not applicable as the Company has not restructured any
loan accounts under resolution framework 1.0.

(ii) The Company has not transferred any non-performing assets (NPAs).

(iii) The Company has not acquired any loans through assignment.

(iv) The Company has not acquired any stressed loan.

58 a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other

sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall
lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.

b) No funds have been received by the Company from any other person(s) or entity(ies), including foreign entities
('"'Funding Parties””) with the understanding, whether recorded in writing or otherwise, that the Company
shall whether, directly or indirectly, lend or invest in other persons or entities identified by or on behalf of the
Funding party ('Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.”

59 The Company is using three accounting software for maintaining its books of account wherein, audit trail feature
(edit log facility) as per the requirements of proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, was
available throughout the year ended March 31, 2026 and March 31, 2025.

Notes to above :

Total risk-weighted assets represents the weighted average of funded and non-funded items after applying the risk
weights as assigned by the RBI.

Tier I capital means owned funds as reduced by investment in shares of other NBFCs and in shares, debentures, bonds,
outstanding loans and advances, including hire purchase and lease finance made to and deposits with subsidiaries and
companies in the same group exceeding, in aggregate, 10% of the owned fund.

Tier II capital includes preference share capital, revaluation reserves, general provisions and loss reserves, hybrid debt
capital instruments and subordinate debts to the extent the aggregate does not exceed Tier I capital.

Liquidity Coverage Ratio (LCR) is given for the quarter ended March 31, 2026 and March 31, 2025.

High Quality Liquid Assets (HQLA) means liquid assets that can be readily sold or immediately converted into cash at
little or no loss of value or used as collateral to obtain funds in a range of stress scenarios.

Total net cash outflows is defined as the total expected cash outflows minus total expected cash inflows for the
subsequent 30 calendar days.

61 The Company, in respect of the comparative year, has provided the below mentioned note:

During the year ended March 31, 2025, the Company recorded an allowance for Expected Credit Loss ("ECL”) of
' 1,864.91 crore, in respect of loans given, with a corresponding charge to the Statement of Profit and Loss, consequent
to a significant increase in credit risk evidenced by slowing and delayed collections. In preparing this statement, the
Company has not evaluated whether any of these allowances should have been recognized in any of the prior period
presented because of limitations in objectively determining information relating to assumptions and circumstances
as it existed in those prior periods. As a result, the Company has concluded that it was impracticable to evaluate and
determine any amounts for retrospective recognition and measurement in those prior periods.

62 With regard to instruction under "Division III of Schedule III” under "Part II - Statement of Profit and Loss - General
Instructions for preparation of Statement of Profit and Loss” :-

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the

company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

(iv) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

(v) The Company has not any such transactions which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.