Note (iv): With effect from January 1,2025, the Company discontinued disbursements to borrowers delinquent beyond 30 days past due. Prior to this, The Company product programme guideline allowed disbursement to borrowers which are in SMA buckets subject to fulfilment of other eligibility criteria as applicable. While product guidelines allowed such disbursement, the decision to disburse to these specific clients (by preclosing existing loan and give top-up loans) were taken based on inputs received from the customer and the field staff. In a joint liability group model (JLG), the fellow group / centre members understand the financial position and their intent to pay. Inputs on product guideline are driven basis feedback received during interactions between the customers (group members attending centre meetings) and our field staff. Recommendations basis these interactions are then given to the supervisory hierarchy including the Chief Business Officer who in turn evaluates and recommends for approval to the COO. In determining whether lending to these customers has any significant increase in credit risk or impairment of such loans and potential future loss estimate, the Company took into consideration the borrowers' vintage, past repayment behaviour and viability of their businesses, as a separate cohort. Accordingly, the company has classified such loans based on their latest repayment schedule as at respective period end and in the respective stage buckets.
(a) Terms / rights attached to equity shares
The Company has only one class of equity shares of par value of f 10 per share. Each holder of equity shares is entitled to one vote per share in proportion to the paid up value of such share. Any dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company declares and pays dividends in Indian rupees. During the current financial year no dividend has been proposed by the Company. 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.
(i) During FY25-26, the Company had allotted nil equity shares (FY24-25: 7,700 equity shares) to eligible employees under Employee stock option plan.
(ii) The Board of Directors of the Company, at its meeting held on July 15, 2025, approved a Rights Issue of partly paid-up equity shares aggregating up to f400 crore. Subsequently, at its meeting on July 18, 2025, the Board finalized the terms of the Rights Issue, fixing the price at f230 per equity share (including a premium of f220), with f115 payable on application. Further, pursuant to its meeting held on August 12, 2025, the Capital raising committee approved the allotment of 1,73,34,362 partly paid-up equity shares at f230 per share, in accordance with the terms of the Rights Issue.
For detailed movement of reserves refer statement of changes in equity for the year ended March 31, 2026.
Nature and purpose of other equity Securities premium
Securities premium 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 the Companies Act, 2013.
General reserve
Amount set aside from retained profits as a general reserve to be utilised in accordance with provisions of the Companies Act, 2013.
Capital redemption reserve
In accordance with section 55 of the Companies Act, 2013, the Company had transferred an amount equivalent of the nominal value of Optionally convertible cumulative redeemable preference shares redeemed during previous years, to the Capital Redemption Reserve. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013.
Share options outstanding account
The share option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.
Statutory reserve (As required by Section 45-IC of Reserve Bank of India Act, 1934
Statutory reserve represents the accumulation of amount transferred from surplus year on year based on the fixed percentage of profit for the year, as per section 45-IC of Reserve Bank of India Act 1934.
Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to statutory reserve, general reserve or any other such other appropriations to specific reserves.
Fair valuation on loans through other comprehensive income
The Company has elected to recognize changes in the fair value of loans in other comprehensive income. These changes are accumulated as reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant loans are derecognized.
Effective portion of cashflow hedges
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.
33: Operating segment
The Company operates in a single business segment i.e. financing, as the nature of the loans are exposed to similar risk and return profiles hence they are collectively operating under a single segment as per Ind AS 108 on ‘Operating Segments'. The Company operates in a single geographical segment i.e. domestic, and hence there is no external revenue or assets which require disclosure. No revenue from transactions with a single external customer aggregates to 10% or more of the Company's total revenue during the year ended March 31, 2026 or March 31,2025.
The Company's pending litigations primarily relate to matters under direct Tax and indirect tax. These have been reviewed in detail, and appropriate provisions have been made wherever required. Contingent liabilities have been disclosed, wherever applicable, in accordance with accounting standards. The amounts involved are based on management's best estimates, and no material liability is expected to arise from these matters. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial performance and financial position regarding the amounts disclosed above, it is not practicable to disclose information on the possibility of any reimbursements as it is determinable only on the occurrence of uncertain future events.
36: Fair Value
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., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques. This note describes the fair value measurement.
Valuation framework
The Company will assess the fair values for assets qualifying for fair valuation. The Company's valuation framework includes:
1. Benchmarking prices against observable market prices or other independent sources;
2. Development and validation of fair valuation models using model logic, inputs and adjustments.
These valuation models are subject to a process of due diligence and validation before they become operational and are continuously calibrated. These models are subject to approvals by various functions.
Fair values of financial assets, other than those which are subsequently measured at amortised cost, have been arrived at as under:
1. Fair values of investments held under FVTPL have been determined under level 1 using quoted Net Asset Value of the underlying instruments;
2. Fair value of loans held under a business model that is achieved by both collecting contractual cash flows and selling the loans are measured at FVOCI. The fair value of these loans has been determined under level 2.
37: Fair Value Hierarchy of assets and liabilities Fair value measurement
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The financial instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market.
Level 3 - If one or more of the significant inputs is not based on observable market data (unobservable), the instrument is included in level 3.
Note:
The carrying amounts of cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, other financial liabilities and trade payables approximate the fair value because of their short-term nature.
Valuation technique used For Term loans
The scheduled future cash flows (including principal and interest) are discounted using the lending rate prevailing as at the balance sheet date. The discounting factor is applied assuming the cash flows will be evenly received in a month. Further the overdue cash flows upto 90 Days (upto stage II) are discounted assuming they will be received in the third month. Fairvalue of cash flows for stage III loans are assumed as carrying value less provision for impairment loss allowance.
For investment in mutual funds
For investments, the Company has assessed the fair value on the basis of the NAV (Net Asset Value) declared by the mutual fund houses.
For investment in security receipts
The expected recoveries are discounted at yield to arrive at the present value of the recoveries. Fair value of cash flows are assumed as carrying value less provision for impairment loss allowance.
For Borrowings
The fair value of fixed rate borrowings is determined by discounting expected future contractual cash flows using current market interest rate being charged for new borrowings. The fair value of floating rate borrowing is deemed to equal its carrying value.
There have been no transfer between Level 1, 2 and 3 during the year ended March 31, 2026 and March 31, 2025.
38: Capital Management (Refer Note 51)
The Company's objective for capital management is to maximize shareholders' value, safeguard business continuity, meet the regulatory requirement and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through borrowings, retained earnings and operating cash flows generated.
As an NBFC-MFI, the RBI requires us to maintain a minimum capital to risk weighted assets ratio (“CRAR”) consisting of Tier I and Tier II capital of 15% of our aggregate risk weighted assets. Further, the total of our Tier II capital cannot exceed 100% of our Tier I capital at any point of time. The capital management process of the Company ensures to maintain a healthy CRAR at all the times.
The Company has a board approved policy on resource planning which states that the resource planning of the Company shall be based on its Asset Liability Management (ALM) requirement. The policy of the Company on resource planning will also cover the objectives of the regulatory requirement. The policy prescribes the sources of funds, threshold for mix from various sources, tenure, manner of raising the funds etc.
39: Defined Benefit Gratuity Plan
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is eligible for gratuity, on cessation of employment and it is computed at 15 days salary (last drawn salary) for each completed year of service subject to limit of T 0.2 crs per the Code on Social Security, 2020. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.
The following tables summarized the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the Balance Sheet for the gratuity plan.
Investment risk
The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets underperform compared to this yield, this will create or increase a deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
Interest rate risk
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.
Variability in withdrawal rates
If actual withdrawal rates are higher than assumed withdrawal rate assumption, then the gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.
Regulatory Risk
Gratuity Benefit must comply with the requirements of the Code on Social Security, 2020. There is a risk of change in the regulations requiring higher gratuity payments (e.g. raising the present ceiling of ' 20,00,000, raising accrual rate from 15/26 etc.).
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.
Salary Risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan's liability.
Asset Liability Matching Risk
The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1062, this generally reduces ALM risk.
Concentration Risk
Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very low.
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.
If actual mortality rates are higher than assumed mortality rate assumption than the gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.
40: Leases
Company as a lessee
The Company's significant leasing arrangements are in respect of operating leases of office premises (Head office and branch offices). The branch office premises are generally rented on cancellable term of eleven months with or without escalation clause, however none of the branch lease agreements carries non-cancellable lease periods. The head office premises have been obtained on a lease term of five years with an annual escalation clause of five percent. The Company has applied short term lease exemption for leasing arrangements where the period of lease is less than 12 months.
42: Risk Management and financial objectives
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 line of business and the environment within which it operates and primarily includes credit, liquidity and market risks. The Company has a risk management policy which covers all types of risks that the Company is exposed to. The risk management policy is approved by the Board of Directors. The Company has identified and implemented comprehensive policies and procedures to assess, monitor and manage risk throughout the Company. The risk management process is continuously reviewed, improved and adapted in the context of changing risk scenarios and agility of the risk management process is monitored and reviewed for its appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event-driven basis. The Company has an elaborate process for risk management. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
42.1 Credit Risk
Credit risk is the risk that the counterparty shall not meet its obligations under a financial instrument or customer contract, leading to a financial loss for the lender. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of the creditworthiness as well as concentration of risks. Credit risk arises primarily from financial assets such as loan receivables, investment in securities, balances with banks and other receivables. Financial instruments that are subject to concentration of credit risk principally consist of investments, bank deposits and other financial assets. The policies of the Company are framed in a manner that ensure that none of the financial instruments where the Company has invested result in material concentration of credit risk. None of the Company's cash equivalents, including fixed deposits, were either past due or impaired as at March 31, 2026 and March 31, 2025. The Company has diversified its portfolio of investment in cash and cash equivalents and term deposits with various banks with sound credit ratings, hence the risk is reduced.
Loans
Credit risk is the risk of loss that may occur from defaults by our borrowers under our loan agreements. In order to address this credit risk, we have stringent credit assessment policies for client selection. Measures such as verifying client details, online documentation and the 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 is a rural focused NBFC-MFI with a geographically diversified presence in India and offers income generation loans under the joint liability group model, predominantly to women from low-income households in rural areas. Further, as we focus on providing micro-loans in rural areas, the results of our operations are affected by the performance and the future growth potential of microfinance in rural India. Our clients typically have limited sources of income, savings and credit histories and our loans are typically provided free of collateral. Such clients generally do not have a high level of financial resilience, and, as a result, they can be adversely affected by declining economic conditions and natural calamities. In addition, we rely on non-traditional guarantee mechanisms rather than tangible assets as collateral, which may not be effective in recovering the value of our loans.
The criteria of default, significant increase in credit risk and stage assessment is mentioned in note 3 (j) of the material accounting policies. The below discussion describes the Company's approach for assessing impairment.
A) Probability of default (PD)
The Company compute PD at enterprise level considering the borrower profile and loan product offered to them are homogeneous. The product features like loan tenure, interest rate, ticket size, customer selection are uniform across the branches and thus carry similar uncertainties. The geographical related political and natural calamity risk is more rationalised when looked at the enterprise level.
Accordingly, the Company determines PD for each stage depending upon the underlying classification of asset (i.e., Stage I or Stage II). The PD rates for Stage I and II have been further bifurcated based on the days-past-due (DPD) status of the loans (i.e., current to 30 DPD, 31-60 DPD and 61-90 DPD) to incorporate adequate granularity. PD rate for stage 3 is derived as 100% considering that the default occurs as soon as the loan becomes overdue for 90 days.
B) Exposure at default (EAD)
Exposure at default (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
The Company determines its expectation of lifetime loss by estimating recoveries towards its loan through analysis of historical information. The Company determines its recovery rates by analysing the recovery trends over different periods of time after a loan has defaulted. LGD is the difference between the exposure at default and its recovery rate. It is based on the difference between the contractual cash flows due and those that the Company would expect to receive. LGD is calculated as % of Exposure that the Company expects to lose at the time of default. LGD is computed as {1-Recovery Rate (RR)} where RR indicates % of Recovery post default.
Collateral and other credit enhancement
The Company's secured portfolio consists of loans against property (including land and building). Although collateral is an important mitigant credit risk, the Company's practice is to lend on the basis of its assessment of the customer's ability to repay rather than placing primary reliance on collateral. Based on the nature of the product and the Company's assessment of the customer's credit risk, a loan may be offered with suitable collateral.
42.1.a Inter-corporate advance given by the Company to related parties are repayable on demand and governed by Company's policy on demand loans approved by the board of directors. Such policy requires credit appraisal of the financial and operational performance of the counter parties, to be performed by the Company before renewing/ rolling over of the advance.
42.2 Liquidity Risk
Liquidity risk refers to the risk that the Company may not meet its financial obligations. Liquidity risk arises due to the unavailability of adequate funds at an appropriate cost or tenure. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generates sufficient cash flows from operating and financing activities to meet its financial obligations as and when they fall due. Our resource mobilization team sources funds from multiple sources, including from banks, financial institutions and capital markets to maintain a healthy mix of sources. The resource mobilization team is responsible for diversifying fundraising sources, managing interest rate risks and maintaining a strong relationship with banks, financial institutions, mutual funds, insurance companies, other domestic and foreign financial institutions and rating agencies to ensure the liquidity risk is well addressed. In order to reduce dependence on a single lender, the Company has adopted a cap on borrowing from any single lender at 25%. The maturity schedule for all financial liabilities and assets are regularly reviewed and monitored. Company has a asset liability management (ALM) policy and ALM Committee to review and monitor the liquidity risk and ensure the compliance with the prescribed regulatory requirement. The ALM Policy prescribes the detailed guidelines for managing the liquidity risk.
42.3 Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market factor. Such changes in the values of financial instruments may result from changes in the interest rates, credit, liquidity and other market changes. The Company is exposed to two types of market risks as follows:
42.3a Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
We are subject to interest rate risk, principally because we 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. We assess and manage our interest rate risk by managing our assets and liabilities. Our Asset Liability Management Committee evaluates asset liability management, and ensures that all significant mismatches, if any, are being managed appropriately.
The Company has Board Approved Asset Liability Management (ALM) policy for managing interest rate risk and policy for determining the interest rate to be charged on the loans given.
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 and equity is affected through the impact on floating rate borrowings, as follows:
42.3b 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. The Company has a board approved policy of investing its surplus funds in highly rated debt mutual funds and other instruments having insignificant price risk, not being equity funds/ risk bearing instruments.
42.3c 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 arise majorly on account of foreign currency borrowings. The Company manages its foreign currency risk by entering in to cross currency interest rate swaps.
The carrying amount of the Company's foreign currency denominated monetary items as at March 31, 2026 and March 31, 2025 is not significant and hence reasonably possible change in the exchange rates, with all other variables held constant, will not have a significant impact on the profit before tax and equity of the Company.
43: Transfer of Financial assets a. Securitisation Transaction:
The Company has entered into securitisation arrangement with various parties. Under such arrangement, the Company has transferred a pool of loans, which does not fulfil the derecognition criteria specified under Ind AS 109 as the Company has concluded that risk and rewards with respect to these assets are not substantially transferred. Following such transfer, the Company's involvement in these assets is as follows:
• As a servicer of the transferred assets
• To the extent of credit enhancements provided to such parties
b. Assignment Transaction:
The Company has sold some loans and advances measured at FVOCI as per assignment deals, as a source of finance. As per the terms of deal, since the derecognition criteria as per Ind AS 109, including transfer of substantially all the risks and rewards relating to assets to the buyer being met, the assets have been derecognised.
Since the Company transferred the above financial asset in a transfer that qualified for derecognition in its entirety, therefore the whole of the interest spread (over the expected life of the asset) is recognised on the date of derecognition itself as interest only strip receivable and correspondingly recognised as profit on derecognition of financial asset.
Spandana Employee Stock Option Plan 2018 and Spandana Employee Stock Option Scheme, 2018 (‘ESOP Plan 2018 and ESOP Scheme 2018')
Spandana Employee Stock Option Plan 2018 and Spandana Employee Stock Option Scheme, 2021 (‘ESOP Plan 2018 and ESOP Scheme 2021')
Spandana Employee Stock Option Plan 2021 Series A and Spandana Employee Stock Option Scheme, 2021-Series A (‘ESOP Plan 2021 and ESOP Scheme 2021 Series A')
45: The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity , including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
46: The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) directly or indirectly lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
47: Schedule to the Balance Sheet of a Non-Banking Financial Company as required under Reserve Bank of India (NonBanking Financial Companies - Financial Statements: Presentation and Disclosures) Directions, 2025, as amended from time to time:
48: Additional information required by Reserve Bank of India (Non-Banking Financial Companies -Financial Statements: Presentation and Disclosures) Directions, 2025, as amended from time to time.
A: Corporate Governance
NBFCs shall put up to the Board of Directors, at regular The Company has put in place a risk management intervals, the progress made in putting in place a progressive policy and periodic updates are presented to the Risk risk management system and risk management policy and Management Committee. strategy followed by the NBFC.
NBFCs shall put up to the Board of Directors, at regular The Company has put up to the Board of Directors' intervals, conformity with corporate governance standards conformity with corporate governance standards viz., in composition of various committees, their role and compliance. functions, periodicity of the meetings and compliance with coverage and review functions, etc.
Exchange Traded Interest Rate (IR) Derivatives
The Company has not traded in Interest Rate Derivative during the financial year ended March 31,2026 (March 31, 2025: Nil).
Disclosures on Risk Exposure in Derivatives A. Qualitative Disclosure
The Company manages various risks associated with the lending business, including liquidity risk, foreign exchange risk, interest rate risk and counterparty risk. To manage these risks, the Company has Board approved policies and framework, including the Risk Management Policy and ALM Policy, which sets limits for exposures on currency, interest rates and other parameters. The Company manages its currency risk and enters in to derivative contracts in accordance with the guidelines prescribed therein.
Liquidity risk and Interest rate risk arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of maturity profiles. The currency risk and interest rate risk on borrowings is actively managed mainly through derivative financial instruments by entering in to forward contracts and cross currency interest rate swaps. Counter party risk is reviewed periodically to ensure that exposure to various counter parties is well diversified and is within the limits fixed by the Risk Management Committee.
H. The Company does not have any parent company, hence disclosure relating to product financed by parent company is not applicable.
I. Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the applicable NBFC
The Company has not exceeded the prudential exposure limits for Single Borrower Limit / Group Borrower Limit during current and previous year.
J. Unsecured Advances - Refer note 7
K. Registration obtained from other financial sector regulators:
The Company is registered with the ‘Ministry of Corporate Affairs' (Financial regulators as described by Ministry of Finance).
L. Disclosure of Penalties imposed by RBI and Other Regulators:
For the year ended March 31,2026: No penalty imposed by RBI and other Regulators
For the year ended March 31,2025: No penalty imposed by RBI and other Regulators
6. Institutional set-up for liquidity risk management:
The Company has an Asset Liability Management Committee (ALCO), a management level committee to handle
liquidity risk management. The ALCO meetings are held at periodic intervals. At the apex level, the Risk Committee
(RC), a sub-committee of the Board of Directors of the Company, oversees the liquidity risk management. The RC
subsequently updates the Board of Directors on the same.
Notes:
1. Significant counterparty is as defined in RBI Circular RBI/2019-20/88 DOR.NBFC (PD) CC.No.102/03.10.001/2019-20 dated November 4, 2019 on Liquidity Risk Management Framework for NonBanking Financial Companies and Core Investment Companies.
2. Significant instrument/product is as defined in RBI Circular RBI/2019-20/88 DOR.NBFC (PD) CC.No.102/03.10.001/2019-20 dated November 4, 2019 on Liquidity Risk Management Framework for NonBanking Financial Companies and Core Investment Companies.
3. Total Liabilities has been computed as sum of all liabilities (Balance Sheet figure) less Equities and Reserves/ Surplus.
4. Short term liabilities includes all financial and non-financial liabilities expected to be paid within one year.
5. Public funds is as defined in Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025
49: The Company in respect of the observation made by the RBI in its inspection report for the years ended March 31, 2018 and March 31, 2019 and subsequent correspondence with Reserve Bank of India (“RBI”) with respect to the compliance with the pricing of credit guidelines prescribed under paragraph 56 of the Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, dated September 1,2016, as amended had adequately recognised the impact of excess interest collected on loans disbursed during the period from Oct 2017 to Feb 2020, in the financial statements for the year ended March 31, 2021. During the year ended March 31, 2026, the Company had refunded T 0.04 crores by way of credit into customers bank accounts / loan accounts. Given the profile of the customers and accessibility issues, the company is unable to trace borrower / bank account of borrower for remaining balances of T 23.10 crores and has sought advice from Reserve bank of India on the refund of balance amount (for which bank account details are not available with the Company) and will act as per directive from Reserve bank of India.
50 (a): During the year ended March 31, 2026, the Company operated in a challenging industry environment characterised by stress in the joint liability group lending model, borrower over-indebtedness, socio-political disruptions and elevated field attrition. Against this backdrop, the Company's legacy loan portfolio originated in earlier periods experienced higher delinquencies, resulting in elevated impairment cost for the period April 01, 2025 to December 31, 2025 (nine months period). The Company undertook technical write-offs during the nine months period, aggregating to a principal outstanding of T1,155.27 crore. The selection of accounts for technical write-off was based on objective criteria identified by the management as loss assets in line with the Company's credit loss policy framed as per Ind AS 109 - Financial Instruments. The Company continues to pursue recovery actions in respect of written-off accounts in line with its recovery processes. Loans originated during FY2026 exhibited stable performance, while overall collection efficiency across all buckets improved steadily over the course of the year. These trends reflect the positive impact of strengthened underwriting standards and enhanced risk management practices. In light of the improvement observed across key operating and credit parameters, the Company believes that its existing provisioning and recovery-led approach remains appropriate, and that accelerated write-offs are no longer warranted. Accordingly, the write-offs recognised during the year are aligned with the Company's impairment assessment framework.
(b) The Company was not compliant with certain financial covenants relating to its borrowings due to factors mentioned in note 50 (a) as at March 31,2026. The Company has obtained waivers in respect of such non-compliant covenants from majority of the lenders. The Company has been in constant communication with its lenders and is confident that no material demand for immediate repayment of borrowed funds will be made due to non-compliance with the covenants. As on the date of these financial statements, none of the lenders have intimated about the same.
(c) The operating environment continued to evolve, with the implementation of industry guardrails effective from April 01,2025, aimed at strengthening the credit discipline over time. In this context, the Company adopted a calibrated approach to disbursements and portfolio management which, together with the natural run off of the existing portfolio, resulted in a reduction in the gross loan book from T5,554.45 crore as at March 31, 2025 to T3,449.58 crore as at March 31,2026. As at March 31, 2026, the Company reported a Capital to Risk-Weighted Assets Ratio (CRAR) of 29.76%, well above the minimum regulatory requirement under applicable RBI guidelines, with Tier I capital of T842.43 crore. Based on the assessment of projected cash flows, available liquidity resources, and Board approved business plans, the Company is of the view that it has adequate resources to meet its obligations as they fall due.
(d) Considering the factors outlined in Notes 50 (a), (b) and (c), Management has assessed the Company's ability to continue as a going concern, taking into account all relevant information available up to the date of approval of these standalone financial statements, including the impact of events occurring after the reporting date. While this assessment involves judgement regarding future events and conditions and is subject to inherent uncertainties, Management is of the view that no material uncertainty exists that would cast significant doubt on the Company's ability to continue as a going concern. Accordingly, the standalone financial statements for the year ended March 31, 2026 have been prepared on a going concern basis.
(e) The Company has recognised a deferred tax asset of T640.63 crore as at March 31, 2026, primarily in respect of carried-forward tax losses and deductible temporary differences. The losses incurred during the year were largely attributable to technical write-offs [refer Note 50 (a)]. Recognition of the deferred tax asset is based on Management's assessment of the Company's future taxable profits in accordance with Ind AS 12, taking into consideration Board-approved business plans, the expected reversal of taxable temporary differences, and other relevant factors. This assessment involves significant management judgement. Management believes that sufficient taxable profits will be available within the prescribed period to enable utilisation of the recognised deferred tax assets.
51. The Company, being a Non-Banking Financial Company - Microfinance Institution (NBFC-MFI), is required to maintain at least 60% of its total assets as “microfinance loans” in accordance with paragraph 12 of the Reserve Bank of India (Non-Banking Financial Companies - Microfinance Institution) Directions, 2025 (as amended), dated November 28, 2025 (the “Master Directions - MFI”). As at March 31,2026, the Company was in compliance with this requirement, with qualifying assets (i.e., microfinance loans as a percentage of total assets) meeting the prescribed threshold.
52. The Board of Directors, at its meeting held on January 10, 2026, granted in-principle approval for the proposed merger of Criss Financial Limited, a subsidiary of the Company, with the Company. To oversee the process, the Board has constituted a Merger Steering Committee, to evaluate and finalize the terms of the proposed merger, facilitate effective decision-making on related matters, and present a final proposal to the Board for its consideration and approval. The merger scheme is yet to be drafted and will remain subject to requisite approvals from statutory and regulatory authorities, as well as the respective shareholders and creditors, in accordance with applicable law. As per Ind AS 36, indicators of impairment exist due to losses incurred in the current year, reducing the networth than the carry cost however, these are assessed to be temporary. The recoverable amount has been assessed based on value in use, supported by a Board approved long term business plan and expected economic benefits from the proposed merger, including scale efficiencies and enhanced cash generating capacity. Accordingly, no impairment has been recognised, and the subsidiary's business is expected to continue within the Company post merger.”
53. 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. 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 T3.91 crore and an increase in leave liability of T3.68 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.
54: Additional Regulatory Information
(a) There is no such immovable properties held whose title deeds are not held in the name of the Company.
(b) There are no investment property as on March 31,2026 and March 31, 2025.
(c) The Company has not revalued its Property, Plant and Equipment (including Right-of Use Assets) and intangible assets based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
(d) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(e) The Company has been sanctioned working capital limits by bank on the basis of security of current assets during the year. The statements of current assets filed by the Company with bank with respect to its sanctioned working capital on a quarterly basis are in agreement with the books of accounts.
(f) The Company has not been declared wilful defaulter by any bank or financial Institution or other lender.
(g) No transactions were carried out during the year with companies struck off under section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956
(h) The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017
(i) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(j) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(k) The Company has availed borrowings from banks and financial institutions and has applied the funds for the specific purposes for which they were sanctioned, as at the balance sheet date. Any unutilized funds as at March 31, 2026 and March 31,2025 have been temporarily deployed in Cash and cash equivalents.
(l) The Company has a process whereby periodically all long-term contracts (including derivative contracts) are assessed for material foreseeable losses. The Company reviews and ensures that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long-term contracts (including derivative contracts) has been made in the books of account. There were no such contracts for which there were any material foreseeable losses for the year ended March 31, 2026.
|