3.15. Provisions

Provisions are recognised when the enterprise has a
present obligation (legal or constructive) as a result
of past events, and it is probable that an outflow
of resources embodying economic benefits will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.

When the effect of the time value of money is material,
the enterprise determines the level of provision by
discounting the expected cash flows at a pre-tax rate
reflecting the current rates specific to the liability. The
expense relating to any provision is presented in the
Statement of Profit and Loss net of any reimbursement.

3.16. Taxes

I ncome tax expense represents the sum of current tax
and deferred tax.

3.16.1 Current Tax

Current tax is the amount of income taxes payable
in respect of taxable profit for a period. Taxable
profit differs from 'profit before tax' as reported in
the Statement of Profit and Loss because of items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible in accordance with applicable tax laws.

The tax rates and tax laws used to compute the
amount are those that are enacted, or substantively
enacted, by the end of reporting date in India where
the Company operates and generates taxable income.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss i.e.,
either in other comprehensive income or in equity.
Current tax items are recognised in correlation to the
underlying transaction either in other comprehensive
income or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are
subject to interpretation and establishes provisions
where appropriate.

3.16.2 Deferred tax

Deferred tax is provided on temporary differences at
the reporting date between the tax bases of assets
and liabilities used in the computation of taxable profit
and their carrying amounts in the financial statements
for financial reporting purposes.

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

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

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

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences, and the carry

forward of unused tax credits and unused tax losses
can be utilised, except:

i. When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss

ii. In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, deferred
tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be
available against which the temporary differences
can be utilised

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

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

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the

deferred taxes relate to the same taxable entity and
the same taxation authority.

3.17. Contingent Liabilities and Assets

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

A contingent asset is a possible asset that arises from
past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of
the entity. The Company does not have any contingent
assets in the financial statements.

3.18. Earnings Per Share

The Company reports basic and diluted earnings per
share in accordance with Ind AS 33 on Earnings per
share (EPS). Basic EPS is calculated by dividing the
net profit or loss for the year attributable to equity
shareholders (after deducting preference dividend and
attributable taxes) by the weighted average number of
equity shares outstanding during the year.

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

3.19. Foreign currency transactions

Transactions in foreign currencies are translated into the
functional currency of the Company at the exchange
rates at the dates of the transactions or an average rate
if the average rate approximates the actual rate at the
date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at
the exchange rate at the reporting date. Non-monetary
assets and liabilities that are measured at fair value in
a foreign currency are translated into the functional
currency at the exchange rate when the fair value was
determined. Non-monetary assets and liabilities that
are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date
of the transaction. Exchange differences are recognised
in the Statement of profit and loss.

3.20. Cash-flow statement

Cash flows are reported using the indirect method,
whereby profit before 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,
investing and financing activities of the Company
are segregated.

3.21. Leases

Effective April 01, 2019, the Company had applied Ind
AS 116 'Leases' to all lease contracts existing on April 01,
2019 by adopting the modified retrospective approach.

The Company evaluates each contract or arrangement,
whether it qualifies as lease as defined under Ind
AS 116. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset.

The Company as a lessee

The Company has elected not to recognise right-of use
assets and lease liabilities for short-term leases that
have a lease term of less than or equal to 12 months and
leases with low value assets. The Company determines
the lease term as the non-cancellable period of a lease,

together with periods covered by an option to extend
the lease, where the Company is reasonably certain to
exercise that option.

The Company recognises the lease payments associated
with these leases as an expense in Statement of
Profit and Loss on a straight-line basis over the lease
term or another systematic basis if that basis is more
representative of the pattern of the lessee's benefit. The
related cash flows are classified as operating activities.

Wherever the above exception permitted under Ind
AS 116 is not applicable, the Company at the time of
initial recognition:

• measures lease liability as present value of all
lease payments discounted using the Company's
incremental cost of borrowing and directly
attributable costs. Subsequently, the lease liability
is increased by interest on lease liability, reduced
by lease payments made and remeasured to reflect
any reassessment or lease modifications specified
in Ind AS 116 'Leases', or to reflect revised fixed
lease payments.

• measures 'Right-of-use assets' as present value of
all lease payments discounted using the Company's
incremental cost of borrowing and any initial
direct costs. Subsequently, 'Right-of-use assets'
is measured using cost model i.e. at cost less any
accumulated depreciation (depreciated on straight¬
line basis over the lease period) and any accumulated
impairment losses adjusted for any remeasurement
of the lease liability specified in Ind AS 116 'Leases'.

The Company as a lessor

Leases under which the Company is a lessor are classified
as finance or operating leases. Lease contracts where
all the risks and rewards are substantially transferred to
the lessee, the lease contracts are classified as finance
leases. All other leases are classified as operating leases.
Lease payments from operating leases are recognised
as an income in the Statement of Profit and Loss on
a straight-line basis over the lease term or another
systematic basis if that basis is more representative
of the pattern in which benefit from the use of the
underlying asset is diminished.

4. Significant accounting judgements,
estimates and assumptions

The preparation of financial statements in conformity
with the Ind AS requires the management to make
judgements , estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities and the accompanying disclosure and the
disclosure of contingent liabilities, at the end of the
reporting period. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in
which the estimates are revised if the revision affects
only that period or in the period of the revision and
future periods if the revision affects both current and
future periods. Although these estimates are based on
the management's best knowledge of current events
and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or
liabilities in future periods.

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

4.1. Business Model Assessment

Classification and measurement of financial assets
depends on the results of the Solely payments of
principal and interest and the business model test. The
Company determines the business model at a level that
reflects how groups of financial assets are managed
together to achieve a particular business objective. This
assessment includes judgement reflecting all relevant
evidence including how the performance of the assets
is evaluated and their performance measured, the risks
that affect the performance of the assets and how these
are managed and how the managers of the assets are
compensated. The Company monitors financial assets
measured at amortised cost or fair value through other
comprehensive income that are derecognised prior
to their maturity to understand the reason for their
disposal and whether the reasons are consistent with
the objective of the business for which the asset was

held. Monitoring is part of the Company's continuous
assessment of whether the business model for which
the remaining financial assets are held continues to be
appropriate and if it is not appropriate whether there has
been a change in business model and so a prospective
change to the classification of those assets.

4.2. Effective Interest Rate (EIR) method

The Company's EIR methodology, recognises interest
income using a rate of return that represents the best
estimate of a constant rate of return over the expected
behavioural life of loans given and recognises the effect
of potentially different interest rates at various stages and
other characteristics of the product life cycle (including
prepayments and penalty interest and charges).

This estimation, by nature, requires an element of
judgement regarding the expected behaviour and
life-cycle of the instruments, probable fluctuations in
collateral value as well as expected changes to India's
base rate and other fee income/expense that are integral
parts of the instrument

4.3. Impairment of loans portfolio

The measurement of impairment losses across all
categories of financial assets requires judgement, in
particular, the estimation of the amount and timing of
future cash flows and collateral values when determining
impairment losses and the assessment of a significant
increase in credit risk. These estimates are driven by
a number of factors, changes in which can result in
different levels of allowances.

It has been the Company's policy to regularly review
its models in the context of actual loss experience and
adjust when necessary.

4.4. Defined employee benefit assets and
liabilities

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

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

4.5. Fair value measurement

When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using various valuation
techniques. The inputs to these models are taken from
observable markets where possible, but where this is not
feasible, a degree of judgment is required in establishing
fair values. Judgments include considerations of inputs
such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the
reported fair value of financial instruments.

4.6. Determination of lease term

I nd AS 116 "Leases" requires lessee to determine the
lease term as the non-cancellable period of a lease

Note 5.2.1: Fixed deposits with banks under lien

Fixed Deposits with bank include fixed deposits given as security for borrowings ?8.71 millions (March 31, 2024: ?8.59 millions),
fixed deposits given as security for guarantees ?11.69 millions (March 31, 2024: ?12.54 millions) and fixed deposits on which lien
is marked for other purposes ?2.07 millions (March 31, 2024: ?2.09 millions).

Note 5.3: The amount of Fixed deposits and Investment in TREPS in Notes 5.1 and 5.2 above does not include interest accrued
aggregating to ?1.37 millions (March 31, 2024: ?11.46 millions) disclosed separately under Other financial assets in Note 10.
Details of such interest accrued is as follows:

Note 22: Other equity (Contd.)

22.1 Nature and purpose of reserve

(a) Statutory reserve

Statutory Reserve represents the Reserve Fund created under Section 45 IC of the Reserve Bank of India Act, 1934.
Accordingly an amount representing 20% of Profit for the period is transferred to the fund for the year.

(b) Securities Premium

This Reserve represents the premium on issue of equity shares and can be utilized in accordance with the provisions of the
Companies Act, 2013.

(c) Debenture Redemption Reserve

Pursuant to Rule 18(7)(b)(iii) of the Companies (Share Capital and Debentures) Rules, 2014, as amended vide the Companies
(Share Capital and Debentures) Amendment Rules dated August 16, 2019, the Company, being an NBFC registered with the
Reserve Bank of India under Section 45 IA of the RBI Act, 1934, is not required to create a Debenture Redemption Reserve,
in respect of public issue of debentures and debentures issued by it on a private placement basis.

(d) General Reserve

Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of profit for the period
at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013,
the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

(e) Share Options outstanding account

The fair value of equity settled Share-based payments transactions is recognised in the Statement of Profit and Loss with
corresponding credit to Share option outstanding account.

(f) Retained earnings

This Reserve represents the cumulative profits of the Company. This Reserve can be utilized in accordance with the provisions
of the Companies Act, 2013.

(g) Other Comprehensive Income

Equity instruments through Other Comprehensive Income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other
comprehensive income. These changes are accumulated in the FVOCI equity investments reserve. The Company transfers
amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Note 22: Other equity (Contd.)

Effective portion of Cash Flow Hedges and Cost of Hedging Reserve

Effective portion of cash flow hedges represents the cumulative gains/(losses) arising on changes in fair value of the derivative
instruments designated as cash flow hedges through OCI. The amount recognized as effective portion of Cash flow hedge
is reclassified to profit or loss when the hedged item affects profit or loss. The Company designates the spot element of
foreign currency forward contracts as hedging instruments. The changes in the fair value of forward element of the forward
contract on reporting date is deferred and retained in the cost of hedging reserve.

Remeasurement of defined benefit plans

It represents the gain/(loss) on remeasurement of Defined Benefit Obligation and of Plan assets.

Note 35: Retirement Benefit Plan
Defined Contribution Plan

The Company makes contributions to Provident Fund which are defined contribution plan for qualifying employees. The Company
recognized ?508.22 millions (March 31, 2024: ?474.63 millions) for Provident Fund contributions in the Statement of Profit
and Loss.

Defined Benefit Plan

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Every
employee who has completed five years or more of service gets a gratuity on leaving the service of the Company at 15 days salary
(last drawn salary) for each completed year of service.

Gratuity liability is funded through a Gratuity Fund managed by Kotak Mahindra Life Insurance Company Limited (Formerly Kotak
Mahindra Old Mutual Life Insurance Limited) and ICICI Prudential Life Insurance Company Limited.

The following tables summarise 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.

The sensitivity is performed on the DBO at the respective valuation date by modifying one parameter whilst retaining other
parameters constant. There are no changes from the previous period to the methods and assumptions underlying the sensitivity
analyses. The weighted average duration of the defined benefit obligation as at March 31, 2025 is 5 years (2024: 5 years).The
estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.

Description of Asset Liability Matching (ALM) Policy

The Company primarily deploys its gratuity investment assets in insurer-offered debt market-linked plans. As investment returns
of the plan are highly sensitive to changes in interest rates, the liability movement is broadly hedged by asset movement if the
duration is matched.

Description of funding arrangements and funding policy that affect future contributions

The liabilities of the fund are funded by assets. The Company aims to maintain a close to full-funding position at each Balance
Sheet date. Future expected contributions are disclosed based on this principle.

The principal assumptions used in determining leave encashment obligations for the Company's plans
are shown below:

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the
estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority,
promotion, increments, mortality, withdrawals and other relevant factors.

Note 40: Capital
Capital Management

The primary objective of the Company's capital management policy is to ensure that the Company complies with externally
imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order to support its business and
to maximise shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and
requirements of the financial covenants. In order to maintain or adjust the capital structure, the Company may adjust the amount
of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes have been made to the
objectives, policies and processes from the previous years. However, they are under constant review by the Board.

Regulatory capital consists of CET1 capital, which comprises share capital, share premium, statutory reserve, share option
outstanding account, retained earnings including current year profit less accrued dividends. Certain adjustments are made to Ind
AS-based results and reserves, as prescribed by the Reserve Bank of India. The other component of regulatory capital is other Tier
2 Capital Instruments.

Note 41: Fair Value Measurement

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.

Valuation methodologies of financial instruments measured at fair value

Fair values of financial assets, other than those which are subsequently measured at amortised cost, have been arrived at as under:
Investments at fair value through profit or loss

For investments where quoted price exist in active markets,the same is used for fair valuation as on measurement date and is
classified as Level 1. The equity instruments which are actively traded on public stock exchanges with readily available active
prices on a regular basis are classified as Level 1 .For investments where no quoted price exist in active markets,valuation is derived
from directly or indirectly observable market data available for subtantially the entire period of the investment and is classified
as Level 2

Derivative Financial Instruments (assets/liabilities) at fair value through other comprehensive income

The financial assets/liabilities on derivative contracts have been valued at fair value through other comprehensive income using
closing rate and is classified as Level 2

Investments at fair value through other comprehensive income

Equity instruments in non-listed entities are initially recognised at transaction price and re-measured as per fair valuation report
on a case-by-case basis and classified as Level 2. The equity instruments which are actively traded on public stock exchanges with
readily available active prices on a regular basis are classified as Level 1.

Note 41: Fair Value Measurement (Contd.)

Valuation methodologies of financial instruments not measured at fair value
Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which
are net of impairment, are a reasonable approximation of their fair value. Such instruments include cash and cash equivalents,
trade receivables, balances other than cash and cash equivalents and trade payables without a specific maturity.

Loans and advances to customers

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit
risks, probability of default and loss given default estimates. Since comparable data is not available, Credit risk is derived using
historical experience, management view and other information used in its collective impairment models.

Fair values of portfolios are calculated using a portfolio-based approach, grouping loans as far as possible into homogenous
groups based on similar characteristics i.e., type of loan. The Company then calculates and extrapolates the fair value to the entire
portfolio using effective interest rate model that incorporate interest rate estimates considering all significant characteristics of
the loans. The credit risk is applied as a top-side adjustment based on the collective impairment model incorporating probability
of defaults and loss given defaults. Hence, the carrying amount of such financial assets at amortised cost net of impairment loss
allowance is of reasonable approximation of their fair value.

Investments - at amortised cost

For Government Securities,the market value of the respective Government stock as on the date of reporting has been considered
for fair value computations.

Debt Securities

The fair value of debt securities and subordinated liabilities is estimated by a discounted cashflow model incorporating interest
rate estimates from market observable data such as secondary prices for its traded debt itself.

Financial liabilities at amortised cost

The fair values of financial liabilities held-to-maturity (financial liabilities other than trade payables, debt securities and subordinated
liablities) are estimated using effective interest rate model based on contractual cash flows using actual yields. Since the cost
of borrowing on the reporting date is not expected to be significantly different from the actual yield considered under effective
interest rate model, the carrying value of such financial liabilities at amortised cost is considered a reasonable approximation of
their fair value.

Note 42: Risk Management

The Company's principal financial liabilities comprise borrowings and trade and other payables. The main purpose of these
financial liabilities is to finance and support the Company's operations. The Company's principal financial assets include loans,
investments, cash and cash equivalents and other receivables that are derived directly from its operations. As a financial lending
institution, Company is exposed to various risks that are related to lending business and operating environment. The principal
objective in Company's risk management processes is to measure and monitor the various risks that Company is subject to and to
follow policies and procedures to address such risks.

The Company's Risk Management Committee of the Board of Directors constituted in accordance with the Reserve Bank of India
regulations has overall responsibility for overseeing the implementation of the Risk Management Policy. The committee meets at
least twice in a year to review the Risk Management practices. Risk Management department periodically places its report to the
committee for review. The committee's suggestions for improving the Risk Management Practices are implemented by the Risk
Management department.

Risk Management department shall be responsible for the following:

a) Identifying the various risks associated with the activities of the Company and assessing their impact on the business.

b) Measuring the risks and suggesting measures to effectively mitigate the risks.

However, the primary responsibility for managing the various risks on a day to day basis will be with the heads of the respective
business units of the Company.

The Company is generally exposed to credit risk, liquidity risk, market risk and operational risk.

I) Credit Risk

Credit Risk arises from the risk of loss that may occur from the default of Company's customers under loan agreements.

Customer defaults and inadequate collateral may lead to loan losses.

The Company addresses credit risk through following processes:

a) Credit risk on Gold loan is considerably reduced as collateral is in the form of Gold ornaments which can be easily
liquidated and there is only a distant possibility of losses due to adequate margin of 25% or more retained while
disbursing the loan. Credit risk is further reduced through a quick but careful collateral appraisal and loan approval
process. Hence overall, the Credit risk is normally low.

b) Sanctioning powers for Gold Loans is delegated to various authorities at branches/controlling offices. Sanctioning
powers are used only for granting loans for legally permitted purposes. The maximum Loan to Value does not exceed
the limit stipulated by the Reserve Bank of India under any circumstances.

c) Gold ornaments brought for pledge is the primary responsibility of Branch Manager. Branch executives should enquire
with the customers about the ownership of the ornaments being pledged for loan and the loan should be granted only
after they are convinced about the genuineness of the customer and his capacity to own that much quantity of gold. In
addition to the above, customers are also required to sign a declaration of ownership of ornaments offered as security
for the loan. Extra care is taken if the gold jewellery brought for pledge by any customer at any one time or cumulatively

Note 42: Risk Management (Contd.)

is more than 20 gm. The declaration should also contain an explanation specifically as to how the ownership was vested
with the customer.

d) Auctions are conducted as per the Auction Policy of the Company and the guidelines issued by Reserve Bank of India.
In case of Gold Loans , generally auction of gold jewellery accepted as security is conducted if total dues on the loan is
not repaid by due date. After reasonable time is given to the customers for release after loan becomes overdue and on
exhausting all efforts for persuasive recovery, auction is resorted to as the last measure in unavoidable cases. Company
has the right to recover dues remaining evenafter set off of amount received on auctions from the customer. Any excess
amount received on auctions over and above the dues are refunded to the customer.

e) I n case of loans other than Gold Loan, loans are given whether with primary/collateral security, like secured loans
or without any primary/collateral security like unsecured loans, more than ordinary care is taken such that loans are
granted only to persons/firms/companies of repute with credit worthiness, future cash flows to repay the loan and
track record.

Impairment Assessment

The Company is mainly engaged in the business of providing gold loans. The tenure of the loans generally is for 12 months.
The Company also provides unsecured personal loans to salaried individuals and unsecured loans to traders and self
employed. The tenure of the loans ranges from 12 months to 60 months. The Company also provides loans to corporate
entities which are secured/unsecured for periods up to 3 years. The Company's impairment assessment and measurement
approach is set out in this note.

Definition of default and cure

The Company considers a financial instrument as defaulted and therefore Stage 3 (credit-impaired) for Expected Credit
Loss (ECL) calculations in all cases when the borrower becomes 91 days past due including the due date on its contractual
payments. As a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of
instances that may indicate unlikeness to pay. When such events occur, the Company carefully considers whether the event
should result in treating the customer as defaulted and therefore assessed as Stage 3 for ECL calculations. It is the Company's
policy to consider a financial instrument as 'cured' and therefore re-classified out of Stage 3 only when none of the default
criteria have been present. Accordingly, revenue is recognized on financial instruments classified as Stage 3 when none of
the default criteria is present. The decision whether to classify an asset as Stage 2 or Stage 1 once cured depends on the
updated credit grade, at the time of the cure, and whether this indicates there has been a significant increase in credit risk
compared to initial recognition.

Note 42: Risk Management (Contd.)

Exposure at Default (EAD)

The Exposure at Default is an estimate of the exposure at a future default date, considering expected changes in the exposure
after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise,
expected drawdowns on committed facilities, and accrued interest.

Probability of Default (PD)

The Probability of Default is an estimate of the likelihood of default over a given time horizon. For Stage 1 financial assets,
the Company assesses the possible default events within 12 months for the calculation of the 12 month ECL. For Stage
2 and Stage 3 financial assets, the exposure at default is considered for events over the lifetime of the instruments. The
Company uses historical information wherever available to determine PD. PD is calculated using Incremental 91 DPD
approach considering fresh slippage using historical information. Where historical information is not available , the PD/
default rates as stated by external reporting agencies is considered. Where appropriate, the Company makes adjustments
to the PD estimate outside the Company's regular modelling process to reflect management judgements . Changes to the
assumptions underlying these judgemental adjusments could materially affect ECL in next 12 months. Theses adjustments
include post-model adjustments and overlays.

Loss Given Default (LGD)

LGD is the estimated loss that the Company might suffer if the borrower defaults. The Company determines its recovery
(net present value) by analysing the recovery trends, borrower rating, collateral value and expected proceeds from sale of
asset/collateral. LGD Rates have been computed internally based on the discounted recoveries in defaulted accounts that
are closed/written off/repossessed and upgraded during the year. When estimating ECLs on a collective basis for a group
of similar assets, the Company applies the same principles for assessing whether there has been a significant increase
in credit risk since initial recognition. Company has adopted 65% as the LGD which is the rate drawn reference from
Internal Rating Based (IRB) approach guidelines issued by Reserve Bank of India for Banks to calculate LGD where sufficient
past information is not available. Where appropriate, the Company makes adjustments to the LGD estimate outside the
Company's regular modelling process to reflect management judgements . Changes to the assumptions underlying these
judgemental adjusments could materially affect ECL in next 12 months. Theses adjustments include post-model adjustments
and overlays.

Note 42: Risk Management (Contd.)

III) Market risk

Market Risk is the risk that the fair value or the 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 objective of market risk management is to avoid excessive exposure of our earnings
and equity to loss and reduce our exposure to the volatility inherent in financial instruments. The Company is exposed to
four types of market risk as follows:

a) Interest rate risk

I nterest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company is subject to interest rate risk, primarily since it lends to customers
at fixed rates and for maturity periods shorter than the funding sources. Majority of our borrowings are at fixed
rates. However, borrowings at floating rates gives rise to interest rate risk. Interest rates are highly sensitive to many
factors beyond control, including the monetary policies of the Reserve Bank of India, domestic and international
economic and political conditions, inflation and other factors. In order to manage interest rate risk, the Company seek
to optimize borrowing profile between short-term and long-term loans. The Company adopts funding strategies to
ensure diversified resource-raising options to minimize cost and maximize stability of funds. Assets and liabilities are
categorized into various time buckets based on their maturities and Asset Liability Management Committee supervise
an interest rate sensitivity report periodically for assessment of interest rate risks. The Interest Rate Risk is mitigated by
availing funds at very competitive rates through diversified borrowings and for different tenors.

During the year, Company has undertaken derivative transactions for hedging interest rate risk on certain domestic
currency exposures linked to external benchmark through Interest Rate Swaps as below:

b) Price risk

Sudden fall in the gold price and fall in the value of the pledged gold ornaments can result in some of the customers
to default if the loan amount and interest exceeds the market value of gold. This risk is in part mitigated by a minimum
25% margin retained on the value of gold jewellery for the purpose of calculation of the loan amount. Further, we
appraise the gold jewellery collateral solely based on the weight of its gold content, excluding weight and value of the
stone studded in the jewellery. In addition, the sentimental value of the gold jewellery to the customers may induce
repayment and redemption of the collateral even if the value of gold ornaments falls below the value of the repayment
amount. An occasional decrease in gold prices will not increase price risk significantly on account of our adequate
collateral security margins. However, a sustained decrease in the market price of gold can additionally cause a decrease
in the size of our loan portfolio and our interest income.

Note 42: Risk Management (Contd.)

Equity price risk is the risk that the fair value of equities decrease as the result of changes in level of equity indices and
individual stocks. The trading equity price risk exposure arises from equity securities classified at FVTPL and the non¬
trading equity price risk exposure arises from equity securities classified at FVOCI.

c) 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's
foreign currency exposures are managed in accordance with its Foreign Exchange Risk Management Policy which has
been approved by its Board of Directors. The Company has hedged its foreign currency risk on its foreign currency
borrowings as on March 31, 2025 by entering into forward contracts with the intention of covering the entire term of
foreign currency exposure. The counterparties for such hedge transactions are banks.

Since the foreign currency exposure is completely hedged by equivalent derivative instrument, there will not be any
significant impact on sensitivity analysis due to the possible change in the exchange rates where all other variables are
held constant. On the date of maturity of the derivative instrument, considering the hedging for the entire term of the
foreign currency exposure, the sensitivity of profit and loss to changes in the exchange rates will be Nil.

d) Prepayment risk

Prepayment risk is the risk that the Company will incur a financial loss because its customers and counterparties repay
or request repayment earlier than expected, such as fixed rate loans when interest rates fall.

IV) Operational and business risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail
to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or lead
to financial loss. The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks
through a control framework and by monitoring and responding to potential risks. Controls include effective segregation
of duties, access, authorisation and reconciliation procedures, staff education and assessment processes including the use
of internal audit.

Note 43: Disclosure with regard to dues to Micro Enterprises and Small Enterprises

Based on the information available with the Company and which has been relied upon by the auditors, none of the suppliers have
confirmed to be registered under "The Micro, Small and Medium Enterprises Development ('MSMED') Act, 2006". Accordingly,
no disclosures relating to principal amounts unpaid as at the period ended March 31, 2025 together with interest paid/payable
are required to be furnished.

Note 44: Dividend remitted in foreign currency

There was no dividend remitted in foreign currency during the year ended March 31, 2025 and March 31, 2024.

Note 45: Segment reporting

The Company is engaged in the business segment of Financing, whose operating results are regularly reviewed by the entity's
chief operating decision maker to make decisions about resources to be allocated and to assess its performance, and for which
discrete financial information is available. Further other business segments do not exceed the quantitative thresholds as defined
by the Ind AS 108 on "Operating Segment". Hence, there are no separate reportable segments, as required by the Ind AS 108
on "Operating Segment".

Note 46: Share-based payments

Pursuant to approval by the shareholders at their meeting held on September 27, 2013, the Company has established "Muthoot
ESOP 2013" scheme administered by the ESOP Committee of Board of Directors. The following options were granted as on
March 31, 2025. The fair value of the share options is estimated at the grant date using a Black-Scholes pricing model, taking into
account the terms and conditions upon which the share options were granted. However, the above performance condition is only
considered in determining the number of instruments that will ultimately vest.

Note 49: Investments in Subsidiaries

During the financial year 2024-25, the Company has acquired 12,42,203 equity shares of the face value of H 10 each in Belstar
Microfinance Limited for a total consideration of H 621.10 millions and 3,30,578 equity shares of the face value of H 1,000 each in
Muthoot Money Limited for a total consideration of H 4,999.99 millions.

Note 50: Frauds during the year

During the year, frauds committed by employees and customers of the Company amounted to ?63.61 millions (March 31, 2024:
? 50.65 millions) which has been recovered/written off/provided for. Of the above, fraud by employees of the Company amounted
to ?5.43 millions (March 31,2024: ?32.18 millions).

Note:

a) Public Fund represents Debt Securities, Borrowings (other than debt securities) and Subordinated Liabilities and excludes Loan from Directors
and Relatives.

b) Total Liabilities represent Total Liabilities and Equity as per Balance Sheet less Equity.

c) Other Short-Term Liabilities represent all liabilities (excluding Commercial Paper) maturing within a year.

(vi) Institutional set-up for Liquidity Risk Management

The Board shall have the overall responsibility for management of liquidity risk. The Board shall decide the strategy, policies
and procedures to manage liquidity risk in accordance with the liquidity risk tolerance/limits decided by it from time to time.

The ALM Committee of the Board of Directors shall be responsible for evaluating the liquidity risk.

The Asset-Liability Management Committee (ALCO) consisting of the NBFC's top management shall be responsible for
ensuring adherence to the risk tolerance/limits set by the Board as well as implementing the liquidity risk management
strategy of the NBFC. The Managing Director heads the Committee. The role of the ALCO with respect to liquidity risk
include, inter alia, decision on desired maturity profile and mix of incremental assets and liabilities, sale of assets as a source
of funding, the structure, responsibilities and controls for managing liquidity risk, and overseeing the liquidity positions of
the Company.

The ALM Support Group headed by Chief Financial Officer and consisting of operating staff who will be responsible for
analysing, monitoring and reporting the liquidity risk profile to the ALCO.

Note 53: Disclosure required as per Master Direction - Reserve Bank of India (Non-Banking
Financial Company - Scale Based Regulation) Directions, 2023 on Comparison between provisions
required under RBI prudential norms on Income Recognition, Asset Classification and Provisioning
(IRACP) and Impairment allowances made under Ind AS 109

In accordance with the regulatory guidance on implementation of Ind AS issued by RBI on March 13, 2020, the Company
has computed provisions as per Income Recognition Asset Classification and Provisioning (IRACP) norms issued by RBI. Where
impairment allowance under Ind AS 109 is lower than the provisioning required under IRACP (including standard asset provisioning),
NBFCs shall appropriate the difference from their net profit or loss after tax to a separate 'Impairment Reserve'. The balance in
the 'Impairment Reserve' shall not be reckoned for regulatory capital. Further, no withdrawals shall be permitted from this reserve
without prior permission from the Department of Supervision of the Reserve Bank. A comparison between provisions required
under IRACP and impairment allowances made under Ind AS 109 is given below:

Note 54: Disclosure required as per Master Direction -Reserve Bank of India (Non Banking Financial
Company- Scale Based Regulation) Directions ,2023 on Liquidity Coverage Ratio

Maintenance of Liquidity Coverage Ratio (LCR)

Reserve Bank Of India vide its notification no. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 dtd November
04, 2019 introduced Liquidity Coverage Ratio for certain categories of NBFCs w.e.f December 01 ,2020. All non-deposit taking
NBFCs with asset size of ? 10,000 crore and above, and all deposit taking NBFCs irrespective of their asset size, shall maintain a
liquidity buffer in terms of LCR which will promote resilience of NBFCs to potential liquidity disruptions by ensuring that they have
sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for 30 days. The stock of HQLA
to be maintained by the NBFCs shall be minimum of 100% of total net cash outflows over the next 30 calendar days. The LCR
requirement shall be binding on NBFCs from December 1, 2020 with the minimum HQLAs to be held being 50% of the LCR,
progressively reaching up to the required level of 100% by December 1, 2024, as per the time-line given below:

Note 54: Disclosure required as per Master Direction -Reserve Bank of India (Non Banking Financial
Company- Scale Based Regulation) Directions ,2023 on Liquidity Coverage Ratio (Contd.)

Note:

1. Unweighted values are calculated as outstanding balances maturing or callable within 30 days (for Cash inflows and Cash outflows).

2. Weighted values are calculated after the application of respective haircuts (for HQLA) and stress factors (on cash inflow/cash outflow) as per
RBI guidelines.

3. 'Average' for all the quarters is computed as simple averages of daily observations for the quarter.

4. The figures used for the quantitative disclosure are based on the estimates and assumptions of the management, which have been relied upon
by the auditors.

B) Qualitative disclosure

The Company has adopted Liquidity Risk Management (LRM) framework on liquidity standards as prescribed by the RBI
guidelines and has put in place requisite systems and processes to enable periodical computation and reporting of the Liquidity
Coverage Ratio (LCR). The mandated regulatory threshold is embedded into the Liquidity Risk Management framework of
the Company thus subjecting LCR maintenance to Board oversight and periodical review. The Company computes the LCR
and reports the same to the Asset Liability Management Committee (ALCO) as well as to the ALM Committee of the Board.
The Company follows the criteria laid down by RBI for calculation of High Quality Liquid Assets (HQLA), gross cash outflows
and inflows within the next 30-day period. HQLA predominantly comprises unencumbered Cash and Bank balances,
Government securities (viz., Treasury Bills, Central and State Government securities, Investments in TREPs (Triparty Repo
trades in Government Securities provided by The Clearing Corporation of India)).

All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR
computation template.

The Company monitors the concentration of funding sources from significant counterparties, significant instruments/
products as part of the LRM framework. The Company follows internal limits on short-term borrowings which form part of
the LRM framework. The Company's funding sources are fairly dispersed across sources and maturities.

The Board shall have the overall responsibility for management of liquidity risk. The Board shall decide the strategy, policies
and procedures to manage liquidity risk in accordance with the liquidity risk tolerance/limits decided by it from time to time.

The ALM Committee of the Board of Directors shall be responsible for evaluating the liquidity risk.

The Asset-Liability Management Committee (ALCO) consisting of the NBFC's top management shall be responsible for
ensuring adherence to the risk tolerance/limits set by the Board as well as implementing the liquidity risk management
strategy of the NBFC. The Managing Director heads the Committee. The role of the ALCO with respect to liquidity risk
include, inter alia, decision on desired maturity profile and mix of incremental assets and liabilities, sale of assets as a source
of funding, the structure, responsibilities and controls for managing liquidity risk, and overseeing the liquidity positions of
the Company.

The ALM Support Group headed by Chief Financial Officer and consisting of operating staff will be responsible for analysing,
monitoring and reporting the liquidity risk profile to the ALCO.

Note 55: Details of Benami Property Held

No proceedings have been initiated or pending against the Company for holding any benami property under the Prohibition of
Benami Property Transactions Act, 1988 (45 of 1988) and rules made thereunder in the financial years ended March 31, 2025
and March 31, 2024.

Note 56: Wilful Defaulter

The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in the financial years
ended March 31, 2025 and March 31, 2024.

Note 57: Relationship with struck off Companies

The Company has no transaction with the companies struck off under section 248 of Companies Act, 2013 or section 560 of
Companies Act, 1956.

Note 58: Registration of Charges or satisfaction with Registrar of Companies (ROC)

All charges or satisfaction are registered with ROC within the statutory period for the financial years ended March 31, 2025 and
March 31, 2024. No charges or satisfactions are yet to be registered with ROC beyond the statutory period.

Note 59: Compliance with number of layers of companies

The number of layers prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number
of Layers) Rules, 2017, is not applicable to the Company.

Note 60: Compliance with approved Scheme(s) of Arrangements

The Company has not entered into any Scheme of Arrangements which requires the approval of the Competent Authority in
terms of sections 230 to 237 of the Companies Act, 2013 for the financial years ended March 31, 2025 and March 31, 2024.

Note 61: Utilisation of Borrowed funds and Share premium

The Company, as part of its normal business, grants loans and advances, makes investment, accept non-convertible debentures
from its customers, other entities and persons and borrows money from banks, financial institutions, other entities and persons.
These transactions are part of Company's normal non-banking finance business, which is conducted ensuring adherence to all
regulatory requirements.

We state that 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 any other persons or entities, including foreign entities ("Intermediaries") with the
understanding, whether recorded in writing or otherwise, that the Intermediary 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 to or on behalf of the ultimate beneficiaries.

The Company has not received any funds from any other persons or entities, including foreign entities (Funding Party) 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.

Note 62: Undisclosed Income

The Company does not have any transaction that are not recorded in the books of account but has been surrendered or disclosed
as income during the year in tax assessments under the Income tax Act, 1961 (such as search or survey or any other relevant
provision under Income Tax Act, 1961) and there was no instance of previously unrecorded income as above to be recorded in
the books of account during the year.

Note 63: Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual currency during the financial years ended March 31, 2025
and March 31, 2024.

Note 64: Audit Trail facility for accounting software

As required under the Companies (Audit and Auditors) Amendment Rules, 2021, read with sub-section 3 of Section 143 of the
Companies Act, 2013 which was effective from April 01, 2023, the Company has used own accounting software for maintaining
its books of account for the financial year ended March 31, 2025 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 audit trail feature
was not enabled at the database level to log any direct data changes, wherein adequate controls have been deployed to monitor
the direct data changes effected at the data base level.Further, as required under proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014, the audit trail has been preserved by the Company as per the statutory requirements for record retention.

Note 65: Other Developments

The Code on Social Security, 2020 (the Code) has been enacted, which would impact contribution by the Company towards
Provident Fund and Gratuity. The impact of changes if any arising on enactment of the Code will be assessed by the Company
after the effective date of the same and the rules thereunder are notified.

Note 66: Previous year's figures have been regrouped/rearranged, wherever necessary to conform to current year's classifications/
disclosure.

Notes on accounts form part of standalone financial statements
As per our report of even date attached

For Krishnamoorthy & Krishnamoorthy For P S D Y & Associates For and on behalf of the Board of Directors

(FRN: 001488S) (FRN: 010625S)

sd/- sd/- sd/- sd/-

R. Venugopal Sreenivasan P. R. George Jacob Muthoot George Alexander Muthoot

Partner Partner Chairman & Whole-time Managing Director

Chartered Accountants Chartered Accountants Director DIN: 00016787

Membership No. 202632 Membership No. 213413 DIN: 00018235

sd/- sd/-

Oommen K. Mammen Rajesh A.

Chief Financial Officer Company Secretary

Place: Kochi Place: Kochi

Date: May 14, 2025 Date: May 14, 2025