8. Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability
is made when there is a possible obligation or a present obligation that may, but probably will not, require
an outflow of resources. When the likelihood of outflow of resources is remote, no provision or disclosure
is made.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.

9. Dividends on equity shares

The Company recognises a liability to make cash distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer at the discretion of the Company.

10. Fair value measurement

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place in the accessible principal market or the most advantageous accessible market
as applicable.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

2C Summary of material accounting policies (Contd.)

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy into Level 1, Level 2 and Level 3 based on the lowest level input
that is significant to the fair value measurement as a whole.

2D Recent accounting pronouncements

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. For the year ended
31 March 2026, MCA has notified following amendments to the existing standards applicable to
the Company.

In May 2025, MCA notified amendments to:

A. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, w.e.f. 1 April 2025

The amendment specifies how an entity should determine the exchange rate when foreign currency
cannot be obtained within a reasonable time and prescribes related disclosures. The Company
has assessed the impact of this amendment and concluded that it has no material impact on the
financial statements.

In August 2025, MCA notified amendments to:

B. Ind AS 1 - Presentation of Financial Statements, applicable w.e.f. 1 April 2025

The amendment relates to classification of liabilities as current or non-current and non-current
liabilities with covenants. In the context of classifying a liability as current, it removes the requirement
of existence of a right to defer settlement for at least 12 months after the reporting date and instead
requires that the said right should exist on the reporting date and have substance. The amendment
also introduces guidance on classification of liabilities with covenants. The Company has no impact of
these amendments in its classification criteria of current and non-current liabilities.

C. Ind AS 7 - Statement of Cash Flows, applicable w.e.f. 1 April 2025

The amendment in Ind AS 7 requires to inform users of financial statements of the existence of
supplier finance arrangements and explain the nature of the arrangements, the carrying amount of
liabilities and the range of payment due dates. The Company has reviewed the amendment and based
on its evaluation has determined that it does not have any impact in its financial statements.

D. Ind AS 107 - Financial Instruments: Disclosures, applicable w.e.f. 1 April 2025

Ind AS 107 has been amended to add supplier finance arrangements as a factor that may cause
concentration of liquidity risk. The Company has reviewed the amendment and based on its evaluation
has determined that it does not have any impact in its financial statements.

E. Ind AS 12 - Income taxes, applicable w.e.f. 1 April 2025

International Tax Reform - Pillar Two Model Rules applicable immediately - The amendments provide a
temporary mandatory relief from deferred tax accounting for top-up tax and disclose that they have
applied the relief. This relief is immediate and applies retrospectively. The Company has reviewed
the amendment and based on its evaluation has determined that it does not have any impact in its
financial statements.

Notes:

1. (a) On 8 January 2026 (transaction date), Bajaj Finserv Ltd. (BFS) along with its Promoter Group entities, namely Bajaj Holdings &

Investment Ltd. and Jamnalal Sons Pvt. Ltd., completed the acquisition of 23% equity stake held by Allianz SE in the two insurance
subsidiaries, namely Bajaj General Insurance Ltd. (formerly known as Bajaj Allianz General Insurance Company Ltd.) and Bajaj Life
Insurance Ltd. (formerly known as Bajaj Allianz Life Insurance Company Ltd.).

Consequent to this transaction:

• BFS acquired 1.01 % equity stake for an amount aggregating to ? 939.44 crore. Pursuant to this, BFS held 75.01 % equity stake
in each of Bajaj General Insurance Ltd. and Bajaj Life Insurance Ltd.

• The existing joint venture agreements between BFS and Allianz SE were terminated.

(b) Subsequently, on 12 March 2026 (transaction date), pursuant to the buyback offer, Allianz SE tendered its entire remaining equity
stake of 3% each in the insurance subsidiaries. Pursuant to the completion of the buyback:

• Allianz SE fully exited both Bajaj General Insurance Ltd. and Bajaj Life Insurance Ltd.

• BFS equity stake in each subsidiary has consequently increased from 75.01 % to 77.33%.

(c) The acquisition is accounted in the financials from the respective transaction date.

2. On 16 January 2026 (transaction date), BFS completed the acquisition of 50% equity stake in Bajaj Financial Distributors Ltd. (BFDL)
(formerly known as Bajaj Allianz Financial Distributors Ltd.) held by Allianz SE for ? 12.50 crore. Consequently, the joint venture
agreement between BFS and Allianz SE was terminated, and BFDL has become a wholly owned subsidiary of BFS.

Bajaj Staffing Solutions Ltd. (formerly known as Bajaj Allianz Staffing Solutions Ltd.), wholly owned subsidiary of BFDL, has become an
indirect wholly owned subsidiary of BFS.

ii) Contractual obligations

There are no contractual obligations to purchase, construct or develop investment property. There are
no restrictions on the existence and realisability of investment property or the remittance of income and
proceeds of disposal.

iii) Leasing arrangements

Investment property are leased out to tenants under operating leases. Disclosure on future rent receivable
is included in note 33.

Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties.

Investment property leased out by the Company are cancellable leases. The market rate for sale/purchase
of such premises are representative of fair values. Company's investment property are at a location where
active market is available for similar kind of property. Hence fair value is ascertained on the basis of market
rates prevailing for similar properties in those location determined by an independent registered valuer and
consequently classified as a level 2 valuation.

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of ? 1 per share. Each holder of equity
shares is entitled to one vote per share. The interim dividend declared (if any) by the Board of Directors
and the final dividend proposed by the Board of Directors and approved by the shareholders in the annual
general meeting is paid in Indian rupees. 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.

c Nature and purpose of reserve
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 section 52 and other provisions of the Companies Act, 2013.

General reserve

General reserve is free reserve available for distribution as recommended by Board in accordance with
requirements of the Companies Act, 2013.

Share based payments reserve

Share based payments reserve is created as required by Ind AS 102 'Share Based Payments' on the
employee stock option scheme operated by the Company.

Treasury shares

The Company has a stock option scheme for its employees. At the time of grant, shares equal to the
quantum of options granted are purchased and held by the BFS ESOP Trust ('ESOP Trust'). The ESOP Trust
transfers such shares to employees at the time of exercise of option by employees. The reserve pertains to
the shares of the Company held under the ESOP Trust.

Retained earnings

Retained earnings represents the surplus in profit and loss account that the Company has earned till date,
less any transfers to general reserve, special reserve, dividends or other distributions paid to shareholders,
reclassification of gain/(loss) on sale of FVTOCI equity instruments and balance of remeasurement of net
defined benefit plans. Retained earnings is a free reserve.

Liability for employee benefit has been determined by an actuary, appointed for the purpose, in conformity with
the principles set out in the Ind AS 19, the details of which are as hereunder.

Funded schemes
Gratuity

The Company provides for gratuity payments to employees. The gratuity benefit payable to the employees
of the Company is in line with provisions of 'The Code on Social Security, 2020' and the Company's gratuity
scheme, whichever is higher. The gratuity plan is a funded plan and the Company makes contributions to
approved gratuity fund.

Sensitivity analysis

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes
in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are
particularly sensitive to are discount rate and future salary escalation rate. The following table summarises the
impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising
on account of an increase or decrease in the reported assumption by 50 basis points.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and
assuming there are no other changes in market conditions at the accounting date. There have been no changes
from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

Funding arrangement and policy

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan have outsourced the investment management of the fund to insurance companies.

The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and
the asset allocation which is within the permissible limits prescribed in the insurance regulations.

There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company's
philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of
the plan.

The expected contribution payable to the plan next year is ? 5.80 crore
Projected plan cash flow

The table below shows the expected cash flow profile of the benefits to be paid to the current membership of
the nian

34 Fair value measurement (Contd.)
ii) Fair value hierarchy

This section explains the basis of 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 values are disclosed 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 Ind AS, which are
explained herein below.

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., 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, as explained below

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets.
Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis
which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds,
as the case may be, that have quoted price/rate/value.

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.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument
is included in level 3. This is the case for unlisted equity securities, contingent consideration and
indemnification asset included in level 3.

Valuation techniques used to determine fair value

Valuation techniques used to determine fair value include

• Open ended mutual funds and certain bonds and debentures at NAV's/rates declared and/or quoted.

• Close ended mutual funds at NAV's declared by AMFI.

• For other bonds and debentures values with references to prevailing yields to maturity matching
tenures, quoted on sites of credible organisation such as ICRA (Investment Information and Credit
Rating Agency).

• Commercial papers and certificate of deposits, being short-term maturity papers, amortised cost is
assumed to be the fair value.

35 Financial risk management

The Company operates, at present, only in India. Whilst risk is inherent in the Company's activities, it is managed
through a risk management framework, including ongoing identification, measurement and monitoring subject
to risk limits and other controls. The Company's activities expose it to credit risk, liquidity risk and market risk.

This note explains the sources of risk which the Company is exposed to and how the entity manages the risk.

The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific
areas, such as, credit risk, liquidity risk, and investment of available funds. The Company's risk management
is carried out by its Risk Management Committee as per such policies approved by the Board of Directors.
Accordingly, Company's Risk Management Committee identifies, evaluates and manages financial risks.

A. Credit risk

Credit risk refers to the risk that a counterparty may default on its contractual obligations leading to a
financial loss to the Company. Credit risk primarily arises from cash equivalents, financial assets measured
at amortised cost, financial assets measured at FVTPL and trade receivables.

Credit risk management

In regard to trade receivables, which are typically unsecured, credit risk is managed through credit
approvals, establishing credit limit and continuously monitoring the credit worthiness of customers to
whom credit is extended in the normal course of business.

With regards to financial assets represented substantially by investments, the Company has an Investment
Policy which allows the Company to invest only with counterparties having a credit rating equal to or above AA
and P1 . The Company reviews the creditworthiness of these counterparties on an on-going basis.

Counter party exposure limits maybe updated as and when required, subject to approval of Board of Directors.

B. Liquidity risk

The Company's principal sources of liquidity are cash and cash equivalents, investments in money market
instruments and cash flows that are generated from operations. The Company believes that its working
capital is sufficient to meet the financial liabilities within maturity period.

C. Other risk (Market risk)

The Company has deployed its surplus funds in debt and money market instruments (including through
funds). The Company is exposed to price risk on such investments, which arises on account of movement
in interest rates, liquidity and credit quality of underlying securities.

35 Financial risk management (Contd.)

As an unregistered CIC, the Company must invest at least 90% of its net assets in Group companies,
of which at least 60% must be through equity or equity related instruments. The Company invests in
certificate of deposits and liquid mutual funds to ensure adequate liquidity is available. Temporary market
volatility, if any is not considered to have material impact on the carrying value of these instruments.
Nevertheless, the Company has invested its surplus funds primarily in debt instruments of its subsidiary
with CRISIL AAA and STABLE A1 rating and thus the Company does not have significant risk exposure.

36 Capital management

a) Objectives, policies and processes of capital management

The Company is cash surplus and has only equity capital. Under Reserve Bank of India (Core Investment
Companies) Directions, 2025, the Company is termed as an unregistered core investment company (CIC)
and is not exposed to any regulatory imposed capital requirements.

The cash surpluses are currently invested in debt and money market instruments (including through
mutual funds) depending on economic conditions in line with the CIC guidelines set out by the RBI and
Investment Policy set by the Management. Safety of capital is of prime importance to ensure availability of
capital for operations. Investment objective is to provide safety and adequate return on the surplus funds
while maintaining enough liquidity. The Company does not have any borrowings.

38 Share-based payments (Employee stock option plan)

The Company has established employees stock options plan, 2018 (ESOP Scheme) for its employees pursuant
to the special resolution passed by shareholders at the annual general meeting held on 19 July 2018.

The employee stock option plan is designed to provide incentives to the employees of the Company and for its
subsidiaries to deliver long-term returns and is an equity settled plan. The ESOP Scheme is administered by the
Compensation Committee of the Board. Participation in the plan is at the Compensation Committee's discretion
and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Options granted under ESOP scheme would vest in not less than one year and not more than five years from
the date of grant of the options. The Compensation Committee of the Company has approved grant with related
vesting conditions. Vesting of the options would be subject to continuous employment with the Company and
hence the options would vest with passage of time. In addition to this, the Compensation Committee may also
specify certain performance parameters subject to which the options would vest. Such options would vest
when the performance parameters are met.

Once vested, the options remain exercisable over period of eight years from the date of vesting or such period
as may be decided by the Compensation Committee at its sole discretion from time to time. Options granted
under the plan are for no consideration and carry no dividend or voting rights. On exercise, each option is
convertible into one equity share.

39 Other notes

a. The Company has performed an assessment to identify transactions with struck off companies as at
31 March 2026 and no such company was identified.

b. No funds (which are material either individually or in the aggregate) have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other person(s) or entity(ies), including foreign entities ('Intermediaries'), with the
understanding, whether recorded in writing or otherwise, that the Intermediaries shall, 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 provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries.

c. No funds (which are material either individually or in the aggregate) have been received by the
Company from any person(s) or entity(ies), including foreign entities ('Funding Parties'), with the
understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly,
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ('Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

d. The Company has not traded or invested in crypto currency or virtual currency during the financial year.

e. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.

f. Figures for the previous periods have been regrouped, wherever necessary, to make them comparable with
the current period.

40 Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements.

41 Miscellaneous

Amounts less than ? 50,000, statutorily required to be disclosed, have been shown at actual against respective

line items.