4.13. Provisions, contingent liabilities and
contingent assets

The Company creates a provision when there is a present
obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate
can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the
consideration required to settle the present obligation
at the reporting date, taking into account the risks and
uncertainties surrounding the obligation.

Provisions are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of resources would be
required to settle the obligation, the provision is reversed.

A contingent liability is disclosed in respect of a possible
obligation that arise from past events whose existence
will be confirmed only on the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company or from a
present obligation that arises from past events which are
not recognised because:

a) it is not probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation; or

b) the amount of the obligation cannot be measured
with sufficient reliability

Contingent assets are not recognised in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income
are recognised in the period in which the change occurs.

4.14. Provision for reward points redemption

The Company has a reward point’s program which allows
card members to earn points based on spends through
the cards that can be redeemed for cash, gift vouchers
and retail merchandize. The Company makes payments
to its reward partners when card members redeem their
points and creates provisions , based on the actuarial
valuation by an independent valuer, to cover the cost
of future reward redemptions. The liability for reward
points outstanding as at the year-end and expected to
be redeemed in the future is estimated based on an
actuarial valuation.

4.15. Cash and Cash Equivalent

Cash and cash equivalents comprise cash balances on
hand, cash balances in bank, funds in transit lying in nodal
account of intermediaries/payment gateway aggregators
and highly liquid investments with original maturity period
of three months or less from date of investment that
are readily convertible to known of cash and which are
subject to an insignificant risk of change in value.

4.16. Critical accounting judgements and key sources
of estimation uncertainty

(I) Revenue Recognition: Application of the various
accounting principles in Ind AS 115 related to the
measurement and recognition of revenue requires
us to make judgments and estimates such as
identifying performance obligations, wherein the
company provides multiple services as part of the
contract. Specifically, complex arrangements with
nonstandard terms and conditions may require
significant contract interpretation to determine the
appropriate accounting. The Company consider
various factors in estimating transaction volumes
and estimated marketing activities target fulfilment,
expected behavioural life of card etc.

(II) Business development incentive: Estimation of
business development incentives relies on forecasts
of payments volume, card issuance etc. Performance
is estimated using, transactional information -
historical and projected information and involves
certain degree of future estimation.

(III) Card life: Estimation of card life relies on behavioural
life trend established basis past customer behaviour
/ observed life cycle at a portfolio level.

(IV) Differences between actual results and our estimates
are adjusted in the period of actual performance

(V) Management is required to assess the probability
of loss and amount of such loss with respect
to legal proceedings, if any, in preparing of
financial statements

(VI) Property, Plant and equipment: The Company
reviews the estimated useful lives of property,
plant and equipment at the end of each reporting
period. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as change
in technology.

(VII) Impairment of financial assets: A number of
significant judgements are also required in applying
the accounting requirements for measuring ECL
such as;

• Establishing groups of similar financial assets
for the purposes of measuring ECL (Portfolio
segmentation)

• Defining default

• Determining criteria for significant increase in
credit risk.

• Choosing appropriate models and assumptions
for measurement of ECL.

• Use of significant judgement in estimating future
economic scenario to calculate management
overlay over base ECL model.

(VIII) Fair value measurements and valuation processes

• I n estimating the fair value of an asset or a
liability, the Company uses market-observable
data to the extent it is available. Where Level 1
inputs are not available, the Company engages
third party qualified valuers to perform the
valuation. The management works closely with
the qualified external valuers to establish the
appropriate valuation techniques and inputs to
the model.

• Information about the valuation techniques
and inputs used in determining the fair value
of various assets and liabilities are disclosed
in note 38.

• All assets and liabilities for which fair value
is measured in the financial statements are
categorised within the fair value hierarchy,
described as follows, based on the lowest
level"

• Input that is significant to the fair value
measurement as a whole:"

Level 1— Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

• For assets and liabilities that are recognised in
the financial statements on a recurring basis,
the Company determines whether transfers
have occurred between levels in the hierarchy
by re-assessing categorisation (based on the
lowest level input that is significant to the fair
value measurement as a whole) at the end of
each reporting period.

(IX) Cost of reward points: The cost of reward point
includes the cost of future reward redemption which
is determined using actuarial valuations. An actuarial
valuation involves making various assumptions that
may differ from actual developments in the future.

(X) Defined Benefit Plans (Gratuity): The cost of the
defined benefit gratuity plan and the present value
of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include

the determination of the discount rate; future
salary increases and mortality rates. Due to the
complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

(XI) Lease: The Company evaluates if an arrangement
qualifies to be a lease as per the requirements of Ind
AS 116. Identification of a lease requires significant
judgment. The Company uses significant judgement
in assessing the lease term (including anticipated
renewals) and the applicable discount rate.

The Company determines the lease term as the non¬
cancellable period of a lease, 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 non-cancellable period of a lease. The discount rate
is generally based on the incremental borrowing rate
specific to the lease being evaluated or for a portfolio of
leases with similar characteristics.

The Company’s accounting policies for its revenue streams are disclosed in detail under Note 4 above and is generated in India.
For Critical accounting estimates, refer note 4.16 to the financial statements.

Disaggregation of Revenue

Disaggregation of revenue is not required as the Company’s primary business is to provide credit card facility and interest on
loans which is governed by Ind AS 109.

Transaction price allocated to the remaining performance obligations

The Company applies practical expedient in Ind AS 115 and does not disclose information about remaining performance obligations
wherein the Company has a right to consideration from customer in an amount that directly corresponds with the value to the
customer of entity’s performance till date.

The Company’s remaining performance periods for its incentive arrangements with network partners are typically long-term in
nature (typically ranging from 3-5 years). Consideration is variable based upon the number of transactions processed and volume
of activity on the cards. As at March 31, 2025, the estimated aggregate consideration allocated to unsatisfied performance
obligations for these other value-added services is ' 12.54 Crores (previous year: Nil)

Receivables from contracts with customers and contract balances

The following table provides information about receivables, contract assets, contract cost and contract liabilities from contract
with customers

Contract costs

The contract cost primarily relates to:

• Incremental costs that are directly linked to obtaining a new contract with a customer and which would not have been
incurred if the contract had not been obtained, are recognised in the statement of profit and loss over behavioral life of
the portfolio.

• A part of sales promotion expense, fees and commission expense and advertisement expenses which are in the nature of
card value proposition offered to customers, etc and are directly related to selling card membership to new customers are
deferred over the membership period consisting of 12 months.

35 CAPITAL MANAGEMENT

Capital risk is the risk that the Company has insufficient capital resources to meet the minimum regulatory requirements to support
its credit rating and to support its growth and strategic options. The Company’s capital plans are deployed with the objective of
maintaining capital that is adequate in quantity and quality to support the Company’s risk profile, regulatory and business needs.
Asset Liability Management Committee [ALCO] is responsible for ensuring the effective management of capital risk. Capital risk
is measured and monitored using limits set out in in relation to the capital and leverage, all of which are calculated in accordance
with relevant regulatory requirements.

As contained in RBI Master Directions - Non-Banking Financial Company - Systemically Important Non-Deposit taking
Company and Deposit taking Company (Reserve Bank) Directions, 2016 (hereinafter referred to as “RBI Master Directions"),
the Company is required to maintain a capital ratio consisting of Tier I and Tier II capital not less than 15 % of its aggregate
risk weighted assets on-balance sheet and of risk adjusted value of off- balance sheet items. Out of this, Tier I capital shall not
be less than 10%. The Board of Director's regularly monitors the maintenance of prescribed levels of Capital Risk Adjusted
Ratio (CRAR).

The Company makes all efforts to comply with the above requirements. Further, the Company has complied with all externally
imposed capital requirements and internal and external stress testing requirements.

The Board of Directors approved the Dividend distribution policy which is in line with the regulatory requirement and
guidelines as prescribed by RBI from time to time. The policy focuses on the internal and external factors (which includes
long term growth plan, cash flow position, auditors’ qualification, supervisory findings of RBI on divergence in classification
and provisioning in Stage 3 assets, prevalent economic conditions and market practices etc) which the Board shall consider
before declaring the dividend.

(C) Interim dividend on equity shares declared: During the year ended March 31, 2025, the Board of Directors have
declared interim dividend of 25% (' 2.50 per equity share of the face value of ' 10.00) for the financial year 2024-25 in
accordance with Section 123(3) of the Companies Act, 2013, as amended. (March 31, 2024 - ' 2.50 per equity share of the
face value of ' 10.00)

Hierarchy of Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the
asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use pricing the asset or
liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits
by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly
or indirectly;

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

37 FINANCIAL RISK MANAGEMENT
37.1 Financial risk factors

The Company has exposure to the following types of risks from financial instruments:

• Market risk;

• Credit risk; and

• Liquidity risk;

The Company’s Board of Directors have overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Risk Management Committee manages the risk management framework and appetite. The Board of
Directors has established the Enterprise Risk Management Committee (ERMC) which is responsible for approving and monitoring
Company’s risk management framework. The risk management policies, processes and tools are reviewed regularly to reflect
changes in market conditions and the Company’s activities.

37.1.1 Market risk

Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in variables
such as changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk
sensitive instruments.

The Company uses a wide range of qualitative and quantitative tools to manage and monitor various types of market risks it is
exposed to. Quantitative analysis such as net income sensitivities, stress tests etc. are used to monitor and manage company’s
market risk appetite.

A. Interest risk

Interest rate risk is the risk of loss from fluctuations in the future cash flows or fair value of financial instruments because
of changes in market interest rates.

Company's investments are categorized under HTM (Held to Maturity) category. Investments are done in Government
securities (T-Bill/ G Sec) only, hence there is no credit risk involved. To monitor the interest rate risk, Treasury function
monitors the modified duration of these investments on monthly basis and report the same to Enterprise Risk Management
Committee through KRI reporting. Further, Company has fixed as well as floating rate borrowings to which it is exposed to
interest rate risk as well as repricing risk at the time of re-borrowing.