l. Provisions

A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future
cash flows (representing the best estimate of the expenditure
required to settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market assessments

of the time value of money and the risks specific to the liability.
The unwinding of the discount is recognised as finance cost.
Expected future operating losses are not provided for.

m. Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. All leases are
accounted for by recognising a right-of-use asset and a lease
liability except for:

- Leases of low value assets; and

- Leases with a duration of 12 months or less.

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease
payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable and
amounts expected to be paid under residual value guarantees.

In calculating the present value of lease payments, the
Company uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease
is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease
term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.

The Company recognises right-of-use assets at the
commencement date of the lease (i.e.the date the underlying
asset is available for use). Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease
liabilities.The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement
date less any lease incentives received. Unless the Company is
reasonably certain to obtain ownership of the leased asset at
the end of the lease term, the recognised right-of-use assets
are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term.

The Company determines the lease term as the initial
period agreed in the lease agreement , together with both
periods covered by an option to extend the lease if the

Company is reasonably certain to exercise that option; and
periods covered by an option to terminate the lease if the
Company is reasonably certain not to exercise that option.
In assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for the
Company to exercise the option to extend the lease, or not
to exercise the option to terminate the lease. The Company
revises the lease term if there is a change in the initial period
agreed in the lease agreement.

n. Taxes

i. Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in
respect of previous years. The amount of current tax
reflects the best estimate of the tax amount expected
to be paid or received after considering the uncertainty,
if any, related to income taxes. It is measured using tax
rates (and tax laws) enacted or substantively enacted by
the reporting date.

Current tax assets and current tax liabilities are offset
only if there is a legally 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.

Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The
Company shall reflect the effect of uncertainty for each
uncertain tax treatment by using either most likely
method or expected value method, depending on which
method predicts better resolution of the treatment.

ii. Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax is not
recognised for:

- temporary differences arising on the initial
recognition of assets or liabilities in a transaction
that is not a business combination and that affects
neither accounting nor taxable profit or loss at the
time of the transaction;

- temporary differences related to investments
in subsidiaries and associates to the extent that
the Company is able to control the timing of
the reversal of the temporary differences and
it is probable that they will not reverse in the
foreseeable future; and

- taxable temporary differences arising on the
initial recognition of goodwill.

Deferred tax assets are recognised to the extent that it
is probable that future taxable profits will be available
against which they can be used. The existence of unused
tax losses is strong evidence that future taxable profit may
not be available. Therefore, in case of a history of recent
losses, the Company recognises a deferred tax asset only
to the extent that it has sufficient taxable temporary
differences or there is convincing other evidence that
sufficient taxable profit will be available against which
such deferred tax asset can be realised. Deferred tax
assets - unrecognised or recognised, are reviewed at each
reporting date and are recognised/ reduced to the extent
that it is probable/ no longer probable respectively that
the related tax benefit will be realised.

Deferred tax assets include Minimum Alternate Tax
(MAT) paid in accordance with the tax laws in India,
which is likely to give future economic benefit ts
in the form of availability of set off against future
income tax liability.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realised or the liability is settled, based on the laws
that have been enacted or substantively enacted by the
reporting date.

The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.

The carrying amount of deferred tax assets is reviewed
at each reporting date and 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 utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.

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

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

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

a. 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 recognised
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable

b. 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.

o. Borrowing cost

Borrowing costs are interest and other costs incurred in
connection with the borrowings of funds. Borrowing costs
directly attributable to acquisition or construction of an
asset which necessarily take a substantial period of time to
get ready for their intended use are capitalized as part of the
cost of the asset. Other borrowings costs are recognized as
an expense in the statement of profit and loss account on an
accrual basis using the Effective Interest Rate Method.

p. Cash and cash equivalents

Cash and cash equivalents comprises cash on hand and
demand deposits with banks. Cash equivalents are short¬
term balances (with an original maturity of three months or
less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.

q. Segment reporting- Identification of segments:

An operating segment is a component of the Company
that engages in business activities from which it may earn
revenues and incur expenses, whose operating results
are regularly reviewed by the Company's Chief Operating
Decision Maker (CODM) to make decisions for which discrete
financial information is available. Based on the management
approach as defined in Ind AS 108, the CODM evaluates the
Company's performance and allocates resources based on
an analysis of various performance indicators by business
segments and geographic segments.

r. Earnings per share

The Company reports basic and diluted earnings per equity
share in accordance with Ind AS 33, Earnings Per Share. Basic
earnings per equity share is computed by dividing net profit
/ loss after tax attributable to the equity share holders for
the year by the weighted average number of equity shares
outstanding during the year. Diluted earnings per equity
share is computed and disclosed by dividing the net profit/
loss after tax attributable to the equity share holders for the
year after giving impact of dilutive potential equity shares for
the year by the weighted average number of equity shares
and dilutive potential equity shares outstanding during the
year, except where the results are anti-dilutive.

s. Cash flow statement

Cash flows are reported using the indirect method, whereby
profit after tax is adjusted for the effects of transactions of
a non-cash nature and any deferrals or accruals of past or
future cash receipts or payments. The cash flows from regular
revenue generating, financing and investing activities of the
Company are segregated. Cash flows in foreign currencies are
accounted at the actual rates of exchange prevailing at the
dates of the transactions.

t. Derivative financial instruments

The Company enters into derivative financial instruments
to manage its exposure to interest rate risk and foreign
exchange rate risk. Derivatives held include foreign exchange

forward contracts, interest rate swaps and cross currency
interest rate swaps.

Derivatives are initially recognised at fair value on the
date when a derivative contract is entered into and are
subsequently remeasured to their fair value at each balance
sheet date. The resulting gain/loss is recognised in the
statement of profit and loss immediately unless the derivative
is designated and is effective as a hedging instrument, in
which event the timing of the recognition in the statement
of profit and loss depends on the nature of the hedge
relationship. The Company designates certain derivatives as
hedges of highly probable forecast transactions (cash flow
hedges). A derivative with a positive fair value is recognised
as a financial asset whereas a derivative with a negative fair
value is recognised as a financial liability.

u. Hedge accounting policy

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 specific 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 Company would 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 on-going
basis to determine that they actually 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:

(i) Fair value hedges

The change in the fair value of a hedging instrument is
recognised in the statement of profit and loss as finance
costs. The 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 and is also recognised
in the statement of profit and loss as finance costs.

For fair value hedges relating to items carried at
amortised cost, any adjustment to carrying value is
amortised through profit or loss over the remaining term
of the hedge using the EIR method. EIR amortisation may
begin as soon as an adjustment exists and no later than
when the hedged item ceases to be adjusted for changes
in its fair value attributable to the risk being hedged.
If the hedged item is derecognised, the unamortised
fair value is recognised immediately in profit or loss.
When an unrecognised firm commitment is designated
as a hedged item, the subsequent cumulative change in
the fair value of the firm commitment attributable to the
hedged risk is recognised as an asset or liability with a
corresponding gain or loss recognised in profit or loss.
The Company has an interest rate swap that is used as
a hedge for the exposure of changes in the fair value
of its 8.25% fixed rate secured loan. Refer note 49
for more details.

(ii) Cash flow hedges

The effective portion of the gain or loss on the hedging
instrument is recognised in OCI in the Effective
portion of cash flow hedges, while any ineffective
portion is recognised immediately in the statement
of profit and loss. The Effective portion of cash flow
hedges is adjusted to the lower of the cumulative
gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item.
The Company uses forward currency contracts as
hedges of its exposure to foreign currency risk in forecast
transactions and firm commitments, as well as forward
commodity contracts for its exposure to volatility in
the commodity prices. The ineffective portion relating
to foreign currency contracts is recognised in finance
costs and the ineffective portion relating to commodity
contracts is recognised in other income or expenses.
Refer to note 44 b for more details.

The Company designates only the spot element of a
forward contract as a hedging instrument. The forward
element is recognised in OCI.

The amounts accumulated in OCI are accounted for,
depending on the nature of the underlying hedged
transaction. If the hedged transaction subsequently
results in the recognition of a non-financial item, the
amount accumulated in equity is removed from the
separate component of equity and included in the initial
cost or other carrying amount of the hedged asset or

liability. This is not a reclassification adjustment and
will not be recognised in OCI for the period. This also
applies where the hedged forecast transaction of a non¬
financial asset or non-financial liability subsequently
becomes a firm commitment for which fair value hedge
accounting is applied.

For any other cash flow hedges, the amount accumulated
in OCI is reclassified to profit or loss as reclassification
adjustment in the same period or periods during which
the hedged cash flows affect profit or loss.

If cash flow hedge accounting is discontinued, the
amount that has been accumulated in OCI must remain
in accumulated OCI if the hedged future cash flows
are still expected to occur. Otherwise, the amount
will be immediately reclassified to profit or loss as a
reclassification adjustment. After discontinuation, once
the hedged cash flow occurs, any amount remaining
in accumulated OCI must be accounted for depending
on the nature of the underlying transaction as
described above.

New and amended standards

Ministry of Corporate Affairs ("MCA”) notifies new standard
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as amended from time
to time. During the year ended 31 March 2025, MCA has
notified following new standards or amendments to the
existing standards applicable to the Company:

i) Lack of exchangeability - Amendments to Ind AS
21: The amendments to Ind AS 21 "The Effects of
Changes in Foreign Exchange Rates

The amendment specify how an entity should assess
whether a currency is exchangeable and how it should
determine a spot exchange rate when exchangeability
is lacking. The amendments also require disclosure
of information that enables users of its financial
statements to understand how the currency not being
exchangeable into the other currency affects, or is
expected to affect, the entity's financial performance,
financial position and cash flows.

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. MCA has notified below

new standards / amendments which were effective
from 01 April 2024.

i) Introduction of Ind AS 117 - Insurance contracts

MCA notified Ind AS 117, a comprehensive standard
that prescribe, recognition, measurement and
disclosure requirements, to avoid diversities in practice
for accounting insurance contracts and it applies to all
companies i.e., to all "insurance contracts” regardless
of the issuer However, Ind AS 117 is not applicable
to the entities which are insurance companies
registered with IRDAI.

ii) Amendments to Ind AS 116 - Lease liability in a sale
and leaseback

The amendments require an entity to recognise lease
liability including variable lease payments which are
not linked to index or a rate in a way it does not result
into gain on right-of-use asset it retains.

The Company has reviewed the new pronouncements
and based on its evaluation has determined that these
amendments do not have a significant impact on the
financial statements.

w. Business combinations and goodwill

Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred measured
at acquisition date fair value and the amount of any non¬
controlling interests in the acquiree. For each business
combination, the Company elects whether to measure the
non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.

The Company determines that it has acquired a business when
the acquired set of activities and assets include an input and
a substantive process that together significantly contribute to
the ability to create outputs. The acquired process is considered
substantive if it is critical to the ability to continue producing
outputs, and the inputs acquired include an organised
workforce with the necessary skills, knowledge, or experience
to perform that process or it significantly contributes to the
ability to continue producing outputs and is considered unique
or scarce or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing outputs.

At the acquisition date, the identifiable assets acquired, and
the liabilities assumed are recognised at their acquisition date
fair values. For this purpose, the liabilities assumed include
contingent liabilities representing present obligation and
they are measured at their acquisition fair values irrespective
of the fact that outflow of resources embodying economic
benefits is not probable. However, the following assets and
liabilities acquired in a business combination are measured
at the basis indicated below:

Liabilities or equity instruments related to share based
payment arrangements of the acquiree or share - based
payments arrangements of the Company entered into
to replace share-based payment arrangements of the
acquiree are measured in accordance with Ind AS 102
Share-based Payments at the acquisition date.

? Assets that are classified as held for sale in accordance
with Ind AS 105 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance
with that Standard.

? Reacquired rights are measured at a value determined
on the basis of the remaining contractual term of the
related contract. Such valuation does not consider
potential renewal of the reacquired right.

When the Company acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with the
contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.

Goodwill is initially measured at cost, being the excess of
the aggregate of the consideration transferred over the net
identifiable assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate
consideration transferred, the Company re-assesses whether
it has correctly identified all of the assets acquired and all of
the liabilities assumed and reviews the procedures used to
measure the amounts to be recognised at the acquisition date. If
the reassessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred,
then the gain is recognised in OCI and accumulated in equity as
capital reserve. However, if there is no clear evidence of bargain
purchase, the entity recognises the gain directly in equity as
capital reserve, without routing the same through OCI.

After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each
of the Company's cash-generating units that are expected to
benefit from the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to those units.

A cash generating unit to which goodwill has been allocated
is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the cash generating unit is less than
its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro rata
based on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised in profit or loss.
An impairment loss recognised for goodwill is not reversed
in subsequent periods.

Where goodwill has been allocated to a cash-generating
unit and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation
is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed
in these circumstances is measured based on the relative
values of the disposed operation and the portion of the cash¬
generating unit retained.

If the initial accounting for a business combination is
incomplete by the end of the reporting period in which
the combination occurs, the Company reports provisional
amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill
during the measurement period, or additional assets or
liabilities are recognised, to reflect new information obtained
about facts and circumstances that existed at the acquisition
date that, if known, would have affected the amounts
recognized at that date. These adjustments are called as
measurement period adjustments. The measurement period
does not exceed one year from the acquisition date.

15B. Loans repayable on demand includes on cash credit and working capital demand loans from banks which are secured by specific
charge on identified receivables. As at 31 March 2025, the rate of interest across the cash credit and working capital demand loans
was in the range of 8.50 % p.a to 9.65% p.a (31 March 2024 - 6.95 % p.a to 10.15% p.a). The Company has not defaulted in the
repayment of the borrowings (including debt securities) and was regular in repayment during the year.

15C. The Company has used the borrowings from banks and financial instritution for the specified purpose as per the agreement
with the lender.

15D. The quarterly returns/statements of current assets filed by the Company with the banks and financial institutions in relation to
secured borrowings whenever applicable, are in agreement with the books of accounts.

15E. The Company is not declared as wilful defaulter by any of our bank and financial institutions during the year ended 31 March 2025
and 31 March 2024.

b) During the year, the Company has issued 311,966 (31 March 2024 : 354,127) equity shares which were allotted to employees who
exercised their options under ESOP scheme.

c) During year ended 31 March 2025 the Company has issued compulsorily convetible preference shares (CCPS) amounting to ^
38,199.99 by offering and issuing

(i) 84,91,048 Series C CCPS having a face value of ^ 20 each issued at a premium of ^ 371 per share, amounting to of ^ 33,199.99 and;

(ii) 12,78,772 Series C2 CCPS having a face value of ^ 20 each issued at a premium of ^ 371 per share, amounting to a ^ 4,999.99 on
a private placement basis by way of preferential allotment pursuant to the approval by the Board of Directors at its meeting held
on 04 April 2024 which was approved by the shareholders in the Extraordinary General Meeting held on 15 April 2024.

d) During the year ended 31 March 2025, the Company has completed an Initial Public Offer ("IPO") of 29,597,646 equity shares of face
value of INR 10 each at an issue price of INR 263 per equity share (INR 239 per equity share reserved for employees), comprising of
offer for sale of 10,532,320 equity shares by selling shareholders and fresh issue of 19,065,326 equity shares. The equity shares of
the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") on 24 September 2024.

e) Rights, preferences and restrictions attached to each class of shares

i) Equity shares

The Company has a single class of equity shares. Accordingly all equity shares rank equally with regard to dividends and share
in the Company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time subject to
payment of dividend to preference shareholders. Dividends are paid in Indian Rupees. Dividend proposed by the board of
directors, if any, is subject to the approval of the shareholders at the General Meeting, except in the case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.

ii) 0.0001% Compulsorily convertible preference shares:

0.0001% Compulsory Convertible Preference Shares (’CCPS') having a par value of INR 20 is convertible in the ratio of 1:1
and are treated pari-passu with equity shares on all voting rights. The conversion shall happen at the option of the preference
shareholders. The CCPS if not converted by the preference shareholders shall be compulsorily converted into equity shares
upon any of the following events:

a. In connection with an IPO, immediately prior to the filing of red herring prospectus (or equivalent document, by
whatever name called) with the competent authority or such later date as may be permitted under applicable law at the
relevant time; and

b. The date which is 19 (nineteen) years from the date of allotment of CCPS.

Till conversion, the holders of CCPS shall be entitled to a dividend of 0.0001%, if any, declared upon profits of the Company and
a proportionate dividend, if any declared on equity shares on 'as converted' basis.

f) In the period of five years immediately preceding 31 March 2025

There were no shares allotted as fully paid up by way of bonus issues and there were no buy back of shares during the last five years
immediately preceding 31 March 2025. There were issue of shares pursuant to the contract without payment being received in
cash as follows:

During the year ended 31 March 2025, the Company issued 52,616,624 equity shares of ^ 20 each pursuant to the conversion of
51,093,024 CCPS of ^10 each, issued by the Company.

Notes

(i) Securities premium

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in
accordance with the provisions of section 52 of the Companies Act 2013.

(ii) Shared Based Payment Reserve

The Company has established various equity settled share based payment plans for certain categories of employees of the Company.
The amount represents reserve created to the extent of granted options based on the employee stock option scheme. Under Ind AS
102, fair value of the options granted is to be expelled off over the life of the vesting period as employee compensation cost reflecting
period of receipt of service.

(iii) Statutory reserve

Reserve u/s 45-IA of the RBI Act, 1934, the Company is required to transfer at least 20% of its net profits every year to a reserve
before any dividend is declared

(iv) Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit
plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

(v) Capital reserve

During the year ended March 31, 2017, the Company approved the Scheme of Arrangement (Demerger) & Amalgamation between
the Company, IFMR Holdings Private Limited ('IFMR Holdings'), Dvara Investments Private Limited and their respective shareholders
and creditors under sections 230 to 232 of the Companies Act, 2013. Pursuant to such scheme of arrangement entered in the year
ended March, 31, 2017, the Company has created a capital reserve in accordance with the applicable accounting standards.

(vi) Capital redemption reserve

The capital redemption reserve was created on account of the redemption of the Cumulative non convertible compulsorily redeemable
preference shares in accordance with section 69 of Companies Act, 2013.

(vii) Other comprehensive income

a) The Company has elected to recognise changes in the fair value of certain loans where the business model is to collect contractual
cash flows and also to sell financial assets in other comprehensive income. These changes are accumulated within the FVOCI -
loans and advances reserve within equity.

b) The Company has applied hedge accounting 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 as cash flow hedge
reserve. Amounts recognised in the effective portion of cash flow hedges is reclassified to the statement of profit and loss when
the hedged item affects profit or loss (e.g. interest payments).

(viii) Share application money received pending allotment

The company has received share application money against exercise of 32,500 shares (As at March 31, 2024 - 74,500 shares) at face
value of ^10 each at an aggregate premium of ^ 35.59 (As at 31 March 2024 - INR 76.31 lakhs) from employees pending allotment at
the end of the respective financial year end.

30. Corporate social responsibility ("CSR”) expenditure

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average
net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities
are commissioning of in-depth financial inclusion survey and developing a financial inclusion index/ metric, enhancement of amenities
to government schools and transfer of funds to the CSR arm of the Company being the Northern Arc Foundation from where the ultimate
spend would be monitored. A CSR committee has been formed by the Company as per the Act. The details of funds primarily utilized
through the year on these activities which are specified in Schedule VII of the Companies Act, 2013 are as follows:

34. Leases

As a lessee, the Company's lease asset class primarily consist of buildings or part thereof taken on lease for office premises. In accordance
with the requirements under Ind AS 116, Leases, the Company has recognised the lease liability at the present value of the future lease
payments discounted at the incremental borrowing rate at the date of initial applica on as at 1 April 2019, and thereafter, at the inception of
respective lease contracts, ROU asset equal to lease liability is recognised at the incremental borrowing rate prevailed during that relevant
period subject to certain practical expedients as allowed by the standard.

The following is the summary of practical expedients elected on initial application:

(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

(b) Applied the exemption not to recognise right to use assets and liabilities for leases with less than 12 months of lease term on the date
of initial application.

(c) Excluded the initial direct costs from the measurement of the right to use asset at the date of initial application.

35. Financial instrument
A Fair value measurement
Valuation principles

Fair value 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, exit price. This is regardless of whether
that price is directly observable or estimated using a valuation technique.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a)
recognised and measured at fair value and (b) measured at amortised cost and for which fair value disclosures are provided in the
financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments into the three levels prescribed under the accounting standards.

The Following methodologies and assumptions were used to estimate the fair values of the financial assets or liabilities

i) For all assets and liabilities which are not carried at fair value, disclosure of fair value is not required as the carrying amount
approximates fair value except as stated below.

a) The fair value of loans other than fixed rate instruments are estimated by discounted cash flow models considering all
significant characteristics of the loans. They are classified as Level 3 fair values in the fair value hierarchy due to the
use of unobservable inputs (discount rate). For fixed rate instruments not carried at fair value, carrying amount
approximates fair value.

b) The fair value of investment in Government securities are derived from rate equal to the rate near to the reporting date of
the comparable product.

ii) There has been no transfer in between level I and level II.

iii) The fair value of Derivatives are determined using inputs that are directly or indirectly observable in market place.

36. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise borrowings from banks, issue of debentures and trade payables. The main purpose
of these financial liabilities is to finance the Company's operations and to support its operations. The Company's financial assets include
loans and advances, investments and cash and cash equivalents that derive directly from its operations.

The Company is exposed to credit risk, liquidity risk, market risk, foreign currency risk. The Company’s board of directors has an overall
responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established
the Risk Management Committee and Asset Liability 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.

Risk management framework

The Company's board of directors and risk management committee has overall responsibility for the establishment and oversight of the
Company's risk management framework. The board of directors and risk management committee along with the top management are
responsible for developing and monitoring the Company’s risk management policies.

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 risk management 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.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical
region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes
in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's performance to developments
affecting a particular industry or geographical location.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on maintaining
a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party to financial instrument fails to meet its contractual
obligations and arises principally from the Company's loans and investments. The carrying amounts of financial assets represent the
maximum credit risk exposure.

The Board has established a credit policy under which each new customer is analysed individually for creditworthiness before the
Company’s standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, if they
are available, financial statements, credit agency information, industry information etc.

A. Loans

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.

An impairment analysis is performed at each reporting date based on the facts and circumstances existing on that date to
identify expected losses on account of time value of money and credit risk. For the purposes of this analysis, the loan receivables
are categorised into groups based on days past due and the type of risk exposures. Each group is then assessed for impairment
using the Expected Credit Loss (ECL) model as per the provisions of Ind AS 109 - financial instruments.

Staging:

As per the provision of Ind AS 109 general approach all financial instruments are allocated to stage 1 on initial recognition.
However, if a significant increase in credit risk is identified at the reporting date compared with the initial recognition, then
an instrument is transferred to stage 2. If there is objective evidence of impairment, then the asset is credit impaired and
transferred to stage 3. In line with the requirements of Ind-AS 109 read with circular on implementation of Indian Accounting
Standards dated March 13, 2020 issued by the Reserve Bank of India, the Company is guided by the definition of default / credit
impaired used for regulatory purposes for the purpose of accounting.

The Company considers a financial instrument defaulted and therefore Stage 3 (credit-impaired) for ECL calculations in all
cases when the borrower becomes 90 days past due on its contractual payments.

For financial assets in stage 1, the impairment calculated based on defaults that are possible in next twelve months, whereas for
financial instrument in stage 2 and stage 3 the ECL calculation considers default event for the lifespan of the instrument.

As per Ind AS 109, Company assesses whether there is a significant increase in credit risk at the reporting date from the initial
recognition. Company has staged the assets based on the Day past dues criteria and other market factors which significantly
impacts the portfolio.

Grouping

As per Ind AS 109, Company is required to group the portfolio based on the shared risk characteristics. Company has assessed
the risk and its impact on the various portfolios and has divided in to different segments:

Intermediate retail

Partnership based lending

Further for intermediate retail ECL is calculated separately for various products - Loans, securitisation, pooled loan products,
working capital loans, guarantee, NCDs.

For Partnership based Lending (PBL) book which is part of retail segment, PD is computed at sector level, ECL is calculated at
partner level and aggregated.

Expected credit loss ("ECL"):

ECL on financial assets is an unbiased probability weighted amount based out of possible outcomes after considering risk of

credit loss even if probability is low. ECL is calculated based on the following components:

a. Marginal Probability of default ("MPD")

b. Loss given default ("LGD")

c. Exposure at default ("EAD")

d. Discount factor ("D")

Marginal probability of default:

Probability of default ("PD") is defined as the probability of whether borrowers will default on their obligations in the future.

1. Intermediate Retail Portfolios (Ratings-Based Approach)

For intermediate retail portfolios, the TTC PD is determined using a ratings-based methodology.

Transition Matrices: The calculation is anchored on the observed movement of loans between Company's internal
credit rating grades. Semi-annual transition matrices are generated, tracking rating migrations over six-month
periods using historical data from September 2017 to the latest reporting date.

? Averaging and Calibration: These historical six-month matrices are averaged to produce a single, long-run transition
matrix that represents stable, through-the-cycle performance. To ensure a logical relationship where credit risk
increases as credit quality declines (monotonicity), the resulting six-month PDs are smoothed using a loglinear
calibration method.

? Final TTC PD: The calibrated six-month PDs are then annualized to arrive at the final 12-month TTC PD for
each rating grade.

2. Partnership based lending (Delinquency-Based Approach)

For the partnership based lending, the TTC PD is calculated using a delinquency-based approach, leveraging static pool

and net flow analysis.

? Static Pool Analysis: To ensure a clear view of asset quality, loans are grouped by their origination period
(""vintage""). The Company analyze the performance of each vintage over time, tracking the movement of accounts
through delinquency stages. This method isolates the performance of underlying assets from the effect of new
loan origination.

? Net Flow to Default: The default rate is determined by observing the net flow of accounts from various delinquency
buckets into a state of 90 Days Past Due (DPD). This analysis is conducted using up to five years of historical data.

? Final TTC PD: A 12-month simple or weighted average of these historical default rates is calculated to establish the
TTC PD for the portfolio.

Forward-Looking Point-in-Time (PIT) PD Estimation

For all portfolios The TTC PD serves as a baseline for determining forward-looking PIT PDs.

? Macroeconomic Linkage: The Vasicek model, or other appropriate logistic regression models, are used to establish a
statistical relationship between the TTC PDs and key macroeconomic factors. This model converts the stable TTC PD
into a dynamic PIT PD that reflects the expected economic environment.

Scenario Analysis: To account for economic uncertainty, PIT PDs are estimated under three macroeconomic scenarios:
a base case, an optimistic case, and a pessimistic case. The optimistic and pessimistic scenarios are informed by
applying shocks (e.g., /- 10%) to the key macroeconomic variables within the model.

Marginal probability:

The PDs derived from the Autoregressive integrated moving average (ARIMA) model, are the cumulative PDs, stating that the
borrower can default in any of the given years, however to compute the loss for any given year, these cumulative PDs have to
be converted to marginal PDs. Marginal PDs is probability that the obligor will default in a given year, conditional on it having
survived till the end of the previous year.

Conditional marginal probability:

As per Ind AS 109, expected loss has to be calculated as an unbiased and probability-weighted amount for multiple scenarios.

The probability of default was calculated for 3 scenarios: upside, downside and base. This weightage has been decided on best
practices and expert judgement. Marginal conditional probability was calculated for all 3 possible scenarios and one conditional
PD was arrived as conditional weighted probability.

LGD

LGD is an estimate of the loss from a transaction given that a default occurs. Under Ind AS 109, lifetime LGD's are defined as
a collection of LGD's estimates applicable to different future periods. Various approaches are available to compute the LGD.
Considering the low expertise in default and recovery, the Company has considered an LGD of 65% as recommended by the
Foundation Internal Ratings Based (FIRB) approach under Basel II guidelines issued by RBI.

EAD:

As per Ind AS 109, EAD is estimation of the extent to which the financial entity may be exposed to counterparty in the event of
default and at the time of counterparty's default. The Company has modelled EAD based on the contractual and behavioural
cash flows till the lifetime of the loans considering the expected prepayments.

The Company has considered expected cash flows , undrawn exposures and second loss credit enhancement (SLCE) for all the
loans at DPD bucket level for each of the risk segments, which was used for computation of ECL. Moreover, the EAD comprised
of principal component, accrued interest and also the future interest for the outstanding exposure. So discounting was done for
computation of expected credit loss.

Discounting:

As per Ind AS 109, ECL is computed by estimating the timing of the expected credit shortfalls associated with the defaults and
discounting them using effective interest rate.

ECL computation:

Conditional ECL at DPD pool level was computed with the following method:

Conditional ECL for year (yt) = EAD (yt) * conditional PD (yt) * LGD (yt) * discount factor (yt)

The calculation is based on provision matrix which considers actual historical data adjusted appropriately for the future
expectations and probabilities. Proportion of expected credit loss provided for across the stage is summarised below:

Collateral and other credit enhancements

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are in
place covering the acceptability and valuation of each type of collateral. The main types of collateral obtained are, vehicles, loan
portfolios and mortgaged properties based on the nature of loans. Management monitors the market value of collateral and will
request additional collateral in accordance with the underlying agreement.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the
carrying amount of the aforesaid balances.

B. Investments

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The exposure to
credit risk for investments is to other non-banking finance companies and financial institutions.

The risk committee has established a credit policy under which each new investee pool is analysed individually for
creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's
review includes external ratings, if they are available, financial statements, credit agency information, industry information etc.
For investments the collateral is the underlying loan pool purchased from the financial institutions.

An impairment analysis is performed at each reporting date based on the facts and circumstances existing on that date to
identify expected losses on account of time value of money and credit risk. For the purposes of this analysis, the investments
are categorised into groups based on days past due. Each group is then assessed for impairment using the Expected Credit Loss
(ECL) model as per the provisions of Ind AS 109 - financial instruments. Further, the risk management committee periodically
assesses the credit rating information.

C. Cash and cash equivalent and bank deposits

The credit risk for cash and cash equivalents and deposits with banks are considered negligible, since the counterparties have
high quality external credit ratings.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with its financial liabilities.
The Company's approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due.

The Company is monitoring its liquidity risk by estimating the future inflows and outflows during the start of the year and
planned accordingly the funding requirement. The Company manages its liquidity by unutilised cash credit facility, term loans and
direct assignment.

The Company has also made sales through direct assignment route (off book) approximately 10% to 25% of assets under management.
This further strengthens the liability management.

The composition of the Company's liability mix ensures healthy asset liability maturity pattern and well diverse resource mix.

The table below summarises the maturity profile of the Company’s non derivative financial liabilities based on contractual
undiscounted payments along with its carrying value as at the balance sheet date.

Note:

- The balances are gross of accrued interest and unamortised borrowing costs.

- Estimated expected cashflows considering the moratorium availed from lenders.

Also refer note 33B for detailed disclosure on Analysis of financial assets and liabilities by remaining contractual maturities

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk includes foreign exchange rates, interest rates and equity prices which will affect the Companies income or the
value of holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company's investment
in bank deposits and variable interest rate lending. Whenever there is a change in borrowing interest rate for the Company, necessary
change is reflected in the lending interest rates over the timeline in order to mitigate the risk of change in interest rates of borrowings.

The interest rate profile of the Company's interest bearing financial instruments is as follows:

Sensitivity analysis of interest rate - Increase/ decrease of 100 basis points

The Company's profit before tax is affected through the impact on floating rate borrowings, as follows:

The sensivity analysis below have been determined based on exposure to the interest rates for financial instruments at the end of
the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the
reporting period in case of instruments that have floating rates. A 100 basis points increase or decrease is used when reporting
interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible
change in interest rates.

If interest rates had been 100 basis points higher or lower and all other variables were constant, the Company's profit before tax /
equity would have changed by the following:

Loans extended by the Company are fixed and floating rate loans.

The sensitivity analysis have been carried out based on the exposure to interest rates for term loans from banks, debt securities and
borrowings carried at variable rate

(iv) Foreign currency risk

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign
currency risk for the Company arises majorly on account of foreign currency borrowings. The Company manages this foreign
currency risk by entering into cross currency interest rate swaps. When a derivative is entered into for the purpose of being as hedge,
the Company negotiates the terms of those derivatives to match with the terms of the hedge exposure. The Company's policy is to fully
hedge its foreign currency borrowings at the time of drawdown and remain so till payment.

The Company holds derivative financial instruments such as cross currency interest rate swap to mitigate risk of changes in exchange
rate in foreign currency and floating interest rate. The counterparty for these contracts is generally a bank. These derivative financial
instruments are valued based on quoted prices for similar assets and liabilites in active markets or inputs that are directly or indirectly
observable in market place.

(v) Collateral and other credit enhancements

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are in place
covering the acceptability and valuation of each type of collateral.

The main types of collateral obtained are, as follows:

a. For corporate and small business lending, charges over trade receivables and

b. For retail lending, collateral in the form of first loss guarantee is obtained from the servicing entity or over identified fixed asset
of the borrower

Management monitors the market value of collateral and will request for additional collateral in accordance with the underlying
agreement. In its normal course of business, the Company does not physically repossess assets in its retail portfolio, but engages
external agents to recover funds, generally at auction, to settle outstanding debt. Any surplus funds are returned to the customers/
obligors. As a result of this practice, the assets under legal repossession processes are not recorded on the balance sheet and not
treated as non-current assets held for sale.

(vi) Technology risk

Technology risk may arise from potential impact to IT systems and data because of hardware or software failure, human errors, as
well as engineered cyber-attacks. In an era where technology is an imperative to drive efficiency, effectiveness and innovation, it
becomes essential for the NBFC to have well-defined policies and procedures, necessary infrastructure and controls, and periodic
audits to guard itself against any looming threats. The Company has implemented the Master Directions on Technology notified by
the Reserve Bank of India and has put in place the necessary policies, procedures, controls and governance mechanisms to mitigate
this risk. In addition, the Company also undergoes an IT audit by an independent firm on a yearly basis, has periodic vulnerability
and penetration tests conducted by a third-party agency to identify and plug any loopholes in its technology infrastructure, process
controls and remediation preparedness. The IT Strategy Committee of the Company looks into all these aspects to protect the
Company's technology and data assets, and ensure adequate preparedness to manage these risks.

Notes:

1. This litigations is related to disallowance of expenses incurred for earning exempt income for the AY 2014-15, which was
partially allowed by the ITAT. The Company filed an appeal against this matter with High Court, Madras.

2. This litigations is related to denying benefit of exemption of Income from securitisation investments under section 10(35A) of
the Income Tax Act AY 2017-18. The Company filed an appeal against this matter with Commissioner of Income Tax Appeals.

3) The amount included above represents best possible estimate arrived at on the basis of available information. The Management
believes that is has a reasonable case in its defence of the proceedings and accordingly no further provision has been created.

4) The Company has certain litigations pending with income tax authorities, and other litigations which have arisen in the ordinary
course of business. The Company has reviewed all such pending litigations having an impact on the financial position, and
has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable in the
standalone financial statements.

39. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

Under Micro, Small and Medium Enterprise Development Act, 2006 ('MSMED') which came into force from October 2, 2006, certain
disclosures are required to be made relating to Micro, Small and Medium enterprises. Based on the information and records available with
management and to the extent of confirmation sought from suppliers on registration with specified authority under MSMED, principal
amount, interest accrued and remaining unpaid and interest paid during the year is furnished as under. The disclosure provided below are
based on the information and records maintained by the management and have been relied upon by the auditor.

40. Retirement Benefit Plan

I. Defined contribution plans

The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund
scheme which is a defined contribution plan. The Company’s contribution is recognized as an expenses in the statement of profit and
loss during the period in which the employee renders the related service. The amount recognised as an expense towards contribution
to provident fund for the period aggregated to INR 903.92 lakhs (31 March 2024: INR 706.37 lakhs).

II. Defined benefit plans

The Company's gratuity benefit scheme is a defined plan. The Company's net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and prior
periods; that benefit is discounted to determine its present value. Any unrecognised past services and the fair value of any plan assets
are deducted. The Calculation of the Company's obligation under the plan is performed annually by a qualified actuary using the
projected unit credit method.

The Company have an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides
for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an
amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years
of service. The Company make annual contributions to gratuity funds established as trusts. The Company account for the liability for
gratuity benefits payable in the future based on an actuarial valuation.

III. Other long term employee benefits

The Company permits encashment of compensated absences accumulated by their employees on retirement. The liability in respect
of the Company, for outstanding balance of privilege leave at the balance sheet date is determined and provided on the basis of
actuarial valuation performed by an independent actuary. The Company does not maintain any plan assets to fund its obligation
towards compensated absences.The liability for compensated absences as at 31 March 2025 is INR 695.42 lakh and as at 31 March
2024 was INR 505.37 lakh.

IV. Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are
detailed below:

Demographic risks

This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement.
The effects of this decrement on the defined benefit obligations depend upon the combination of salary increase, discount rate, and
vesting criteria and therefore not very straight forward.

Change in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the
value of the plan's investment in debt instruments.

Inflation risk

The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

Life expectancy

The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants,
both during and after the employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

41. Share Based Payaments

Employee Stock Option Plan 2016 (ESOP) has been approved by the Board at its meeting held on 07 October 2016 and by the members in
the Extra Ordinary General Meeting held on 07 October 2016.

41.1 The Company has an cash settled share based payments scheme, under which grants were made as per details
provided below:

Northern Arc Capital Employee Stock Option Scheme 2016 - "Scheme II"

The Northern Arc Capital Employee Stock Option Plan 2016 is applicable to all employees including employees of subsidiaries. The
options were issued in seventeen tranches. The exercise price ranging between INR 110 to INR 275. The options are vested equally
over a period of 5 years.

Northern Arc Employee Stock Option Scheme 2023 - "Scheme- II B"

The Northern Arc Capital Employee Stock Option Plan 2016 is applicable to all employees including employees of subsidiaries. The
options were issued on 9th September 2021. The exercise price is INR 275. The options are vested equally over a period of 5 years.

Northern Arc Capital Employee Stock Option Scheme 2018 - "Scheme III"

The Northern Arc Capital Employee Stock Option Scheme 2016 is applicable to all employees including employees of subsidiaries.
The options were issued in five tranches. The exercise price ranging between INR 10 to INR 275. The options are vested over a period
of 3 years in 30:30:40. proportion

Northern Arc Capital Employee Stock Option Scheme 2022 - "Scheme- IV"

The Northern Arc Capital Employee Stock Option Scheme 2022 is applicable to all employees including employees of subsidiaries.
The options under this scheme were issued on 21st July, 2021 . The exercise price is INR 324 price per share. The options are vested
over a period of 4 years in 25:25:25:25 proportion.

Northern Arc Capital Employee Stock Option Scheme 2023 - "Scheme- IVB"

The Northern Arc Capital Employee Stock Option Scheme 2023 is applicable to all employees including employees of subsidiaries.
The options under this scheme were issued on five tranches. The exercise price is 275 per share. The options are vested over a period
of 4 years in 25:25:25:25 proportion.

45. Segment reporting
Operating segments

The Company’s operations predominantly relate to arranging or facilitating or providing finance either in the form of loans or investments
or guarantees. The information relating to this operating segment is reviewed regularly by the Company's Board of Directors (Chief
Operating Decision Maker) to make decisions about resources to be allocated and to assess its performance. The CODM considers the entire
business of the Company on a holistic basis to make operating decisions and thus there are no segregated operating segments. The CODM
of the Company reviews the operating results of the Company as a whole and therefore not more than one reportable segment is required
to be disclosed by the Company as envisaged by Ind AS 108 Operating Segments.

The Company does not have any separate geographic segment other than India. As such there are no separate reportable segments as per
IND AS 108 Operating Segments.

Information about major customers

The Company operates in a single business segment ie. financing, which has similar risks and returns taking into account the organisational
structure and the internal reporting systems. No revenue from transactions with a single external customer or counterparty amounted to
10% or more of the company's total revenue in year ended 31 March, 2025 or 31 March, 2024. The Company operates in single geography
i.e. India and therefore geographical information is not required to be disclosed separately.

46. Balance sheet disclosure as required under Master Direction - Reserve Bank of India (Non-Banking
Financial Company - Scale Based Regulation) Directions, 2023

The disclosures in note from 46A to 80 are made pursuant to Reserve Bank of India Master Direction DoR.FIN.REC.No.45/03.10.119/2023-
24 dated October 19, 2023, as updated, to the extent applicable to the Company.

46A Gold loan portfolio

The Company has not provided loan against security of gold during the year ended 31 March 2025 and year ended 31 March 2024.

b) Exchange Traded Interest Rate (IR) Derivatives

The Company has not entered into any exchange traded derivative in the current year and in the previous year.

c) Disclosures on Risk Exposure in Derivatives

Qualitative Disclosures

i) The Company undertakes the derivatives transaction to prudently hedge the risk in context of a particular borrowing and to
maintain fixed and floating borrowing mix. The Company does not indulge into any derivative trading transactions. The Company
reviews, the proposed transaction and outline any considerations associated with the transaction, including identification
of the benefits and potential risks (worst case scenarios); an independent analysis of potential savings from the proposed
transaction. The Company evaluates all the risks inherent in the transaction viz., counter party risk, Market Risk, Operational
Risk, basis risk etc.

ii) Credit risk is controlled by restricting the counterparties that the Company deals with, to those who either have banking
relationship with the Company or are internationally renowned or can provide sufficient information. Market/Price risk
arising from the fluctuations of interest rates and foreign exchange rates or from other factors shall be closely monitored and
controlled. Normally transaction entered for hedging, will run over the life of the underlying instrument, irrespective of profit
or loss. Liquidity risk is controlled by restricting counterparties to those who have adequate facility, sufficient information, and
sizable trading capacity and capability to enter into transactions in any markets around the world.

iii) The respective functions of trading, confirmation and settlement should be performed by different personnel. The front office
and back-office role is well defined and segregated. All the derivatives transactions are quarterly monitored and reviewed. All
the derivative transactions have to be reported to the board of directors on every quarterly board meetings including their
financial positions.

78. Disclosure pursuant to Reserve Bank of India Circular DOR.NBFC (PD) CC. No.102/03.10.001 /2019-20
dated November 4, 2019 pertaining to Liquidity Risk Management Framework for Non-Banking Financial
Companies.

As per the Guidelines on Liquidity Risk Management Framework for NBFCs issued by RBI vide notification no. RBI/2019-20/88 DOR.NBFC
(PD) CC. No.102/03.10.001/2019-20, all non-deposit taking NBFCs with asset size more than INR 5,000 crores are required to maintain
Liquidity Coverage Ratio (LCR) from December 1, 2022, with the minimum LCR to be 60%, progressively increasing, till it reaches the
required level of 100%, by December 1, 2024.

The Company has implemented the guidelines on Liquidity Risk Management Framework prescribed by the Reserve Bank of India
requiring maintenance of Liquidity Coverage Ratio (LCR), which aim to ensure that an NBFC maintains an adequate level of unencumbered
High Quality Liquid Assets (HQLA) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under
a significantly severe liquidity stress scenario. Compliance with LCR is monitored by Asset Liability Management Committee (ALCO)
of the Company.

Qualitative information:

Main drivers to the LCR numbers:

All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR computation.
Composition of HQLA:

The HQLA maintained by the Company comprises Government securities (including Treasury bills) and cash balance maintained in current
account. The details are given below.

- For the period April to March 2025, the average HQLA of (INR 21,635.37 lakhs) comprised of Rs. 9,375.37 lakhs in cash and INR
12,260.00 lakhs in Treasury Investments.

Concentration of funding sources:

The company maintains diversified sources of funding comprising short/long term loans from banks, NCDs, and sub-ordinated, ECBs and
CPs. The funding pattern is reviewed regularly by the management

Derivative exposures and potential collateral calls:

As on 31 March 2025, the company has fully hedged interest and principal outflows on the foreign currency ECBs. Hence, open derivative
exposures are considered NIL.

Currency mismatch in LCR:

There is NIL mismatch to be reported in LCR as on 31 March 2025 since foreign currency ECBs are fully hedged for the corresponding
interest and principal components.

Other inflows and outflows in the LCR calculation that are not captured in the LCR common template but which the institution
considers to be relevant for its liquidity profile

Nil

Notes:

1. The average weighted and unweighted amounts are calculated based on simple average of daily observations. The weightage factor
applied to compute weighted average value is constant for all the quarters.

2. Prior to introduction of LCR framework, the company used to maintain a substantial share of its liquidity in form of fixed deposits
with banks and investment in mutual funds. Post the introduction of LCR framework, the Company has consciously worked towards
increasing its investment in High Quality Liquid Assets (HQLA) as per the RBI guidelines.

3. Weighted values have been calculated after the application of respective haircuts (for HQLA) and stress factors on inflow and outflow.

4. The disclosures above are based on the information and records maintained and compiled by the management and have been relied
upon by the auditors.

5. RBI has mandated minimum liquidity coverage ratio (LCR) of 60% to be maintained by December 2021, which is to be gradually
increased to 100% by December 2024. The Company has LCR of 154.39% as of 31 March 2025 as against the LCR mandated by RBI.

80. Other RBI disclsoures

a. The Company does not have off-balance sheet SPVs sponsored, which are required to be consolidated as per the accounting norms,
during the year ended 31 March 2025

b. The Company did not have any unhedged foreign currency exposure.

c. There are no divergences in asset classification and provisioning.

d. Intra Group exposure:

81. Goodwill

During the previous year ended 31 March 2023, the Company had acquired specifically identified assets and liabilities of S.M.I.L.E
Microfinance Limited (S.M.I.L.E), a un-listed company based in India. The excess of the purchase consideration over the value of specifically
identified assets and liabilities resulted in a goodwill of INR 2,085.13 lakhs for the Company, which comprises the value of expected synergies
arising from the acquisition and Intangibles assets recognised in accordance with Ind AS 38 (ie, Technical know-how, Non Compete, Order
book etc). The entire amount of goodwill is considered to be associated with Pragati portfolio (CGU), which is part of the business of the
Company (arranging or facilitating or providing finance either in the form of loans or investments or guarantees).

1.3 Net worth is equal to equity share capital other equity

1.4 GNPA Ratio is gross stage 3 (loans investments) / gross loans and investments

1.5 NNPA Ratio is (gross stage 3 term loans - impairment loss allowance for stage 3 term loans /(gross term loans- impairment allowance
for Stage 3 term loans)

1.6 Capital adequacy ratio or capital-to-risk weighted assets ratio (CRAR) is computed by dividing company's Tier I and Tier II capital by
risk weighted assets.

1.7 Asset cover over listed non-convertible debentures represents the number of times the listed non-convertible debentures is covered
through the term loans provided as security.

1.8 Net profit margin is total comprehensive income for the period, net of income tax / total income

Other ratios / disclosures such as debt service coverage ratio, interest service coverage ratio, outstanding redeemable preference
shares (quantity and value), capital redemption reserve/debenture redemption reserve, current ratio, long term debt to working
capital, bad debts to account receivable ratio, current liability ratio, debtors turnover, inventory turnover and operating margin (%)
are not applicable / relevant to the Company and hence not disclosed.

83. Treatment of DLG in computation of Expected Credit Loss

The Company has entered into First Loss Default Guarantee (FLDG) arrangements with certain Lending Service Providers (LSPs) in relation
to loans originated through the digital lending platform. Under these arrangements, the LSPs guarantee to cover the losses arising from
borrower defaults up to a certain percentage of the loan portfolio. Based on the guidance under Ind AS 109, the Company had historically
considered the expected recoveries from credit enhancements under FLDG arrangements in the computation of Expected Credit Loss (ECL).

The Reserve Bank of India (RBI), vide e-mail communication dated 16 May 2025, has directed the Company to exclude the credit
enhancements under FLDG arrangements in the computation of ECL as at 31 March 2025 and absorb such impact by 30 June 2025.
Pursuant to this, the Company has evaluated the total impact of such exclusion of the credit enhancements from the ECL computation to
be INR 8,041 lakhs as at 31 March 2025 of which the Company during the quarter ended 31 March 2025 has recorded INR 6,835 lakhs.
The exposure pertaining to remaining ECL of INR 1,206 lakhs, has subsequent to 31 March 2025, run down thereby naturally reversing the
impact in the quarter ending 30 June 2025.

The above accounting treatment has resulted in a reduction of profit before tax for the quarter and year ended 31 March 2025 by INR 6,835
lakhs with a corresponding decrease in loans and advances on account of additional ECL provisions.

84. Event after reporting date

Subsequent to the year end, the company had sold 3,58,601 shares held by it in FinReach Solutions Private Limited, post dilution,
the shareholding in Finreach has come down from 24.55 % to 11.16%. Consequent to the above, FinReach ceases to be an associate
of the Company.

85. Audit Trail as per MCA Requirement

The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log)
facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that -

(a) in respect of the loan management systems for two products of the Company, the audit trail feature was enabled, operated throughout
the year and was not tampered with at the application level. However at the database level, the audit trail feature for one application
was enabled on 08 July 2024 and operated post the aforementioned date for the year for all relevant transactions recorded in
the application at a database level; and for the other application, the database level audit trail is expected to be enabled in the
subsequent years.

(b) the company uses three loan management systems (LMS) for the other loan products offered. These loan management systems have
a feature of recording audit trail (edit log) facility. However, management is not in possession of Service Organization Controls report
to determine whether audit trail feature of LMS managed by third party was enabled and operated throughout the year. Further, for
the loan management systems, there are system limitation in testing the operation of audit trail feature. The Company is in discussion
with the vendor of the application to assess feasibility to enable such feature as per the requirements of regulation. The Company
currently relies on alternate manual controls in place around reports produced from the loan management systems.

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

(ii) The Company does not have any transactions with companies struck off as per section 248 of Companies Act, 2013.

(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) As part of the normal business, the Company invests in Alternate Investment Fund managed by its subsidiary and also lends
loan to its subsidiary for onward investment into these AIFs. The AIFs invests in debt instruments issued by various originators
based on decision made by the investment committee of the respective funds. These transactions are part of the Company's
normal investment activities/ business, which is conducted after exercising proper due diligence including adherence to terms of
private placement memorandum of respective AIFs and other guidelines. Other than the nature of transactions described above:

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) 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 persons or entities, 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). The Company has not received any fund from any party's (Funding
Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities
identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction 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 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).

viii) The provision related to number of layers as prescribed under section 2(87) of the Companies Act read with Companies
(Restriction on number of Layers) Rules, 2017 is not applicable to Company.

ix) Compliance with approved Scheme(s) of Arrangements: The Company has not entered in any such arrangements during the year.

87. Previous year figures

Previous year figures have been regrouped/rearranged, wherever considered necessary, to conform to the classification/

disclosure adopted in the current year.

As per our report of even date attached

For Walker Chandiok & Co LLP For and on behalf of the board of directors of

Chartered Accountants Northern Arc Capital Limited

ICAI Firm Registration no.: 001076N/N500013 CIN: L65910TN1989PLC017021

Khushroo B. Panthaky P S Jayakumar Ashish Mehrotra

Partner Chairman Managing Director & CEO

ICAI Membership No. 042423 DIN: 01173236 DIN: 07277318

Atul Tibrewal Prakash Chandra Panda

Chief Financial Officer Company Secretary and Compliance Officer

Membership No: A22585

Place: Nagpur Place: Mumbai

Date: 19 May 2025 Date: 19 May 2025