Note 17: Derivative financial instruments

The company enters in to derivatives for risk management purpose which includes hedges that either meet the hedge accouting requirements or hedges that are economic hedges. The Company holds derivative financial instruments such as foreign currency forward and cross currency interest rate swaps to mitigate the risk of changes in exchange rates on foreign currency exposures. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.

Note 17.1 Hedging activities and derivatives

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk.

The Company's risk management strategy and how it is applied to manage risk are explained in Note 45.

Note 17.2 Derivatives designated as hedging instruments

The company is exposed to foreign currency risk arising from its fixed rate foreign currency denominated bond amounting to USD 300 million. Interest on the borrowing is payable at 7.37 % p.a. at half yearly intervals, and the principal amount is repayable in May 2028. The Company economically hedged the foreign currency risk arising from the bond with Forward Rate Agreement of equivalent amount.

The company is exposed to foreign currency risk arising from its fixed rate foreign currency External Commercial Borrowing amounting to USD 297 million. Interest on the borrowing is payable at 7-8% p.a. and the principal amount is repayable on various due dates. The Company economically hedged the foreign currency risk arising from the loan with Cross Currency Interest Rate swaps of equivalent amount. The Cross Currency Interest Rate Swaps converts the cash outflows of the foreign currency fixed rate borrowing of USD 297 million to cash outflows in Indian Rupees with a notional amount of ' 24,916.49 Million

The company is exposed to foreign currency risk arising from its fixed rate foreign currency borrowing amounting to Nil ( March 2024 USD 43.85 million). Interest on the borrowing is payable at 8.85 % p.a. and the principal amount is repayable in August 2024. The Company economically hedged the foreign currency risk arising from the loan with Cross Currency Interest Rate swaps of equivalent amount. The Cross Currency Interest Rate Forward converts the cash outflows of the foreign currency fixed rate borrowing of USD 43.85 million to cash outflows in Indian Rupees with a notional amount of Nil (March 2024 ?3,636 Million)

There is an economic relationship between the hedged item and the hedging instrument as the terms of the forward currency contract match that of the foreign currency borrowing (notional amount, principal repayment date etc.). The company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the forward currency contract are identical to the hedged risk components. For the purpose of calculating hedge effectiveness, the company uses a qualitative features to determine the hedge effectiveness.

Exclude unpaid (Unclaimed) matured debentures shown as a part of the other financial Liabilities(Refer Note.22)

Includes EIR impact of transaction cost, premium amount on issue of NCD

US Dollar Bonds carry interest rates of 7.37% p.a (31^st March, 2025) and their tenure is for 4 years (31^st March, 2024 : Nil).

Nature of Security

Debentures are secured by a floating charge on the book debts of the Company on gold and other unencumbered assets. The Company shall maintain 100% security cover on the outstanding balance of debenture with accrued interest any time. Debentures are offered for a period of 1 year to 10 years.

US Dollar Bonds are secured by way of floating charge on the book debts of the Company on gold and other unencumbered assets.

The Company has not defaulted in repayment of principal and interest during the year ended as at the balance sheet date 31^st March,

2025 and 31^st March, 2024

Term loan from bank:

Indian rupee loan from banks (secured): These are secured by an exclusive charge by way of hypothecation of book debts pertaining

to loans granted against gold and margin/cash collateral as per the agreement.

Foreign currency Term Loan /ECB from Banks (secured):

1) Foreign currency loan: Nil as at 31^st March, 2025 ( 31^st March, 2024 '3636.30 Million) which carries interest @ 6 month SOFAR plus 120 bps. The loan is repayable after 3 years from the date of its origination, viz., 17^th March, 2022.

2) Foreign currency loan: 1. '3744.00 million(ECB) as at 31^st March, 2025 ( 31^st March, 2024 '4160.00 million(ECB)) which carries interest @ 6 month SOFAR plus 225 bps. The loan is repayable after 3 years from the date of its origination, viz., 25^th October, 2023.

3) Foreign currency loan: 1. '4157.00 million(ECB) as at 31^st March, 2025 ( 31^st March, 2024 '4157.00 million(ECB)) which carries interest @ 6 month SOFAR plus 235 bps. The loan is repayable after 3 years from the date of its origination, viz., 24^th January, 2024. The loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company.

4) Foreign currency loan: '4178.00 million(ECB) as at 31^st March, 2025 ( 31^st March, 2024 Nil) (ECB)) which carries interest @ 6 month SOFAR plus 215 bps. The loan is repayable after 3 years from the date of its origination, viz., 24^th June, 2024. The loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company.

5) Foreign currency loan: '8,380.00 million(ECB) as at 31^st March, 2025 ( 31^st March, 2024 Nil) (ECB)) which carries interest @ 6 month SOFAR plus 195 bps. The loan is repayable after 3 years from the date of its origination, viz., 30^th September, 2024. The loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company.

6) Foreign currency Loan: . '1,983.40 miLLion(ECB) as at 31^st March, 2025 ( 31^st March, 2024 Nil) (ECB)) which carries interest @ 6 month SOFAR plus 175 bps. The loan is repayable after 3 years from the date of its origination, viz., 19^th November, 2024. The loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company.

7) Foreign currency loan: '2,474.10 million(ECB) as at 31^st March, 2025 ( 31^st March, 2024 Nil) (ECB)) which carries interest @ 6 month SOFAR plus 210 bps. The loan is repayable after 3 years from the date of its origination, viz., 31^st March, 2024. The loans

are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company.

Term Loan from other parties (secured):

Third party rupee term loan is secured where Interest payments are made monthly at 8.70 % - 8.90% pa. The loans is secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company as per the agreement.

Loans repayable on demand

Cash credit / Overdraft facilities from banks (secured):

These loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company as per the agreement.

Working Capital demand loan from banks (secured):

These loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans & advances of the Company as per the agreement.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ' 2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31^st March, 2025, the amount of per share dividend recognized as distributions to equity shareholders was ' 4/- per share (31^st March, 2024: ' 3.30/- per share)

I n 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.

e) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

The Company has issued 1,441,604 equity shares (31^st March, 2024: 3,624,872) during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP) wherein part consideration was received in the form of employee services.

For details of shares reserved for issue under the employee stock option plan(ESOP) of the Company, refer note 37

f) The primary objectives of the Company's capital management policy are 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. No changes have been made to the objectives, policies and processes from the previous years. However, they are under constant review by the Board.

Nature and purpose of Reserves

a) Securities premium: Securities premium reserve is used to record the premium on issue of shares i.e excess of face value over issue price. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

b) Share option outstanding account (ESOP reserve): The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 37 for further details of these plans.

c) Statutory reserve (Statutory Reserve pursuant to Section 45-IC of The RBI Act, 1934): Section 45IC of Reserve Bank of India Act, 1934 ("RBI Act, 1934”) defines that every non banking finance institution shall create a reserve fund and transfer therein a

sum not Less than twenty percent of its net profit every year as disclosed in the statement of profit and Loss before any dividend is declared. The Company has transferred an amount of '3566.53 Mn (2023-24 '3315.55 Mn) to Statutory reserve pursuant to Section 45-IC of RBI Act, 1934

d) Impairment Reserve

The NBFCs will have to compute two types of provisions or loss estimations, ECL as per Ind AS 109 & its internal ECL model and parallelly provisions as per the RBI prudential norms. A comparison between the two is required to be disclosed by the NBFC in the annual financial statements. Where the ECL computed as per the ECL methodology is lower than the provisions computed as per the IRAC norms, then the difference between the two should be parked in "Impairment Reserve”. Allocation to Impairment Reserve should be made out of Retained earnings and there are certain restrictions towards utilization of this reserve amount.

e) General reserve: Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. 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.

f) Hedge reserve: The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings as described within note 45. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps, foreign currency option contracts and interest rate swaps. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the hedge reserve. Amounts recognised in the hedge reserve is reclassified to the statement of profit or loss when the hedged item affects profit or loss (e.g. interest payments).

g) Retained earning: Retained earnings are the profits that the Group has earned till date, less any transfers to statutory reserve, general reserve and dividend distributed to shareholders

h) Other comprehensive income: Other items of other comprehensive income consist of re-measurement of net defined benefit liability/asset and fair value changes on derivatives designated as cash flow hedge, net.

i) Share application money pending allotment: The amount received on the application for equity shares of the Company on which allotment is not yet made, to the extent not refundable.

j) Debenture redemption reserve:

(1) Pursuant to Section 71 of the Companies Act, 2013 and circular 04/2013, read with notification issued date 19^th June, 2016 issued by Ministry of Corporate Affairs, the Company is required before 30^th day of April of each year to deposit or

invest, as the case may be, a sum which shall not be less than 15% of the amount of its debenture issued through public issue maturing within one year from the balance sheet date.

(2) Pursuant to notification issued by Ministry of Corporate Affairs on 16^th August, 2019 in exercise of the powers conferred by sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government amend the Companies (Share Capital and Debentures) Rules, 2014.

In the principal rules, in rule 18, for sub-rule (7), the limits with respect to adequacy of Debenture Redemption Reserve and investment or deposits for listed companies (other than All India Financial Institutions and Banking Companies as specified in sub-clause (i)), Debenture Redemption Reserve is not required to maintain in case of public issue of debentures as well as privately placed debentures for NBFCs registered with Reserve Bank of India under section 45-IA of the RBI Act, 1934.

Nature of CSR expenditure: CSR projects of Manappuram Finance Ltd are focused on promotion of quality education, promotion of healthcare, Rural development projects, women empowerment, environment sustainability etc which includes both ongoing and one year projects.

Details of related party trasactions with respect to CSR expenditure are showed under note 42.

Note 35: Income Tax

The Company has computed the tax expense of the current financial year as per the tax regime announced under section 115BAA of the lncome Tax Act, 1961. Accordingly, the provision for current and deferred tax has been determined at the rate of 25.17%.

The expected volatility of the stock has been determined based on historical volatility of the stock. The period over which volatility has been considered is the expected life of the option.

Note 38: Retirement Benefit Plan Defined Contribution Plan

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized '682.90 Mn(31 March 2024: '620.43Mn) for Provident Fund contributions and '123.89 Mn (31 March 2024: '116.34Mn) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.

Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Kotak Life Insurance.

The following tables summaries 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 weighted average duration of the defined benefit obligation as at 31^st March, 2025 is 4 years (2024: 4 years)

The fund is administered by Life Insurance Corporation of India ("LIC”) and Kotak Life Insurance. The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of in ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The defined benefit plans expose the Company to a number of actuarial risks as below:

Investment Risks - The company's performance is directly affected by the over- or under-performance of the investment assets of the gratuity plan. Inadequate performance could, among others, increase the future employer contributions.

Interest Rate Risk - This is the risk associated with a rise or fall in the interest rate which could affect liability and asset values. The plan is exposed to the interest rate risk toward its liability and asset values.

Regulatory Risk - The gratuity plan is exposed to multiple regulatory risks e.g., increase in the statutory benefit definition for gratuity. Higher costs from regulatory oversight of organisation pensions or from compliance toward existing trust and funding-related obligations (e.g., minimum funding requirements) contribute to the regulatory risks.

Salary and earnings inflation Risk - The Salary growth rate assumption is the company's estimate of future salary increases take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. In a 'final salary' gratuity plan, the risk of higher earnings-inflation and merit-related salary growth could outweigh the assumptions employed for the valuation and increase the company's future defined benefit obligation.

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 and other relevant factors.

Note 39: Maturity analysis of assets and liabilities

The table below shows an analysis of assets and liabilities analysed according to when they are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months, regardless of the actual contractual maturities of the products. With regard to loans and advances to customers, the Company uses the same basis of expected repayment behaviour as used for estimating the EIR. Issued debt reflect the contractual coupon amortisations.

Notes;

(a) Applicability of Kerala Money Lenders' Act : The Company has challenged in the Hon'ble Supreme Court the order of Hon'ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon'ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon'ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

b) The company has some labour cases pending against it in various courts and with labour commissioners of various states. The company's liability for these cases are not disclosed since actual liability to be provided is unascertainable.

Note 41 (iii): Lease Disclosures (entity as a lessee)

(a) Leases of Branch Premises

(i) Ind AS 116 "Leases” is applied to all Lease contracts. The company recorded the Lease Liability at the present value of the lease payments discounted at the incremental borrowing rate of the company and the right of use (ROU) asset at measured at the amount of the initial measurement of the lease liability.

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

1. Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date. Discount rate has been taken as the Incremental Borrowing rate of borrowings with similar tenure.

2. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

3. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(iii) The entity takes branch premises on lease. Below are the changes made during the year in the carrying value of:

The entity does not face a significant Liquidity risk with regard to its Lease Liabilities. Lease Liabilities are monitored within the entity's treasury function.

(b) Lease of Short Period (Less than 12 months)

The leases of certain premises are less than 12 months and hence are considered as short term leases and are exempted from the scope of leases under Ind AS 116.

During the year, the Company charged off ' 145.98 Mn (Previous year ' 144.93 Mn) as rent expenses on short term leases.

Note 43: CapitalDisclosures as required in Annex VII of RBI notification - RBI/DoR/2023-24/106 DoR.FIN.REC.No.45/03.10.119/2023-24 dated 19^th October, 2023 'Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023', as amended from time to time to the extent applicable.Capital Management

The primary objectives of the Company's capital management policy are 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 according to changes in economic conditions and the risk characteristics of its activities. 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.

The Company's debt equity ratio as on 31^st March 2025 stands at 2.29 times (2.17 times as at 31^st March, 2024).

During the year ended 31^st March, 2025, the Company has paid the interim dividend of '4.5/- per equity share for the year ended 31^st March, 2025 amounting to '3,385.74 Mn (3.3 per equity share amounting to ' 2793.18 Mn for the year ended March 31 2024.)

Note 44: Fair Value Measurement44.1 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 , 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 in the material accounting policies of the year ended 31^st March, 2025.

44.2 Valuation governance

The Company's process to determine fair values is part of its periodic financial close process. The Audit Committee exercises the overall supervision over the methodology and models to determine the fair value as part of its overall monitoring of financial close process and controls. The responsibility of ongoing measurement resides with business units . Once submitted, fair value estimates are also reviewed and challenged by the Risk and Finance functions.

44.4 Valuation techniques

Equity instruments

Equity instruments in non-Listed entities are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case and classified as Level 3. The Company uses prices from prior transactions without adjustment to arrive at the fair value. Prior transaction represents the price at which same investment was sold in the deal transaction. Quoted equity instruments on recognised stock exchange are valued at level 1 heirarchy being the unadjusted quoted price as at the reporting date.

Cross Currency Swaps

Interest rate derivatives include interest rate swaps, cross currency interest rate swaps, basis swaps and interest rate forwards (FRAs). The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations by estimating future cash flows and discounting them with the appropriate yield curves incorporating funding costs relevant for the position. These contracts are generally Level 2 unless adjustments to yield curves or credit spreads are based on significant non-observable inputs, in which case, they are Level 3.

Interest rate derivatives

Interest rate derivatives include interest rate swaps, cross currency interest rate swaps, basis swaps and interest rate forwards (FRAs). The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations by estimating future cash flows and discounting them with the appropriate yield curves incorporating funding costs relevant for

the position. These contracts are generally Level 2 unless adjustments to yield curves or credit spreads are based on significant non-observabte inputs, in which case, they are Level 3.

Foreign exchange contracts

Foreign exchange contracts include open spot contracts, foreign exchange forward and swap contracts and over the-counter foreign exchange options. These instruments are valued by either observable foreign exchange rates, observable or calculated forward points and option valuation models. With the exception of contracts where a directly observable rate is available which are disclosed as Level 1, the Company classifies foreign exchange contracts as Level 2 financial instruments when no unobservable inputs are used for their valuation or the unobservable inputs used are not significant to the measurement (as a whole).

Movements in Level 3 financial instruments measured at fair value

There are no Level 3 financial assets and liabilities which are recorded at fair value.

The financial asset above does not include investment in subsidiary, which is measured at cost in accordance with Ind AS 27.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Valuation methodologies of Financial instruments not measured at Fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the financial statements. These fair values were calculated for disclosure purposes only.

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 balances, balances other than cash and cash equivalents, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 2 on the basis that no adjustments have been made to the balances in the balance sheet.

Loans and advances to customers

Fair value of Loans estimated using a discounted cash flow model on contractual cash flows using actual/estimated yields.

Debt and Borrowings

The floating rate Loans are fair valued on the basis of MCLR spread. For fixed rate Loans, the carrying values are a reasonable approximation of their fair value.

Note 45: Risk Management

Risk is an integral part of the Company's business and sound risk management is critical to the success. As a financial institution, the

Company is exposed to risks that are particular to its lending and the environment within which it operates and primarily includes Credit, Liquidity, Market and Operational Risks. Company's goal in risk management is to ensure that it understands measures and monitors the various risks that arise and the organization adheres strictly to the policies and procedures which are established to address these risks. The Company has a risk management policy which covers risks associated with the financial assets and liabilities. The Board of Directors of the company are responsible for the overall risk management approach, approving risk management strategies and principles. Risk Management Committee of the Board reviews credit, operations and market risks faced by MAFIL periodically.Company has appointed a Chief Credit Officer who reports to MD & CEO and presenting risk related matters to Risk Management Committee and the Board.

The Company has implemented comprehensive policies and procedures to assess, monitor and manage risk throughout the Company. The risk management process is continuously reviewed, improved and adapted in the changing risk scenario and the agility of the risk management process is monitored and reviewed for its appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event-driven basis.

The Company has an elaborate process for risk management. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Credit Risk

Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting in financial loss to the Company. As the company predominantly lend against gold jewellery, which are liquid securities, its credit risks are comparatively lower. Its other verticals, Micro Finance, Vehicle Finance, Micro loans etc have significant credit risk.

Appraisal Risk: The borrowers are awarded risk grades and only eligible borrowers are financed. Besides continuous training of employees through digital media, Credit officers are imparted on the job and class room training on a continuous basis. Credit appraisal processes are being reviewed regularly by Credit Monitoring teams and credit auditors and more risk filters are added whenever necessary.

Collection risk: As the gold ornaments are liquid, collection in gold portfolio attaches minimal risks. We have developed a team of trained Relationship Managers and sales staff for continuous engagement with the borrowers under verticals like Micro Finance, Vehicle Finance, Housing loans, Micro loans etc to ensure timely payment of their dues. Collection efficiency of verticals are being monitored closely by the Senior Management.

Concentration risk: As on 31/03/2025, our gold loan portfolio is 77.24 % of our consolidated AUM. Gold loans are granted against

liquid securities for short period which substantially insulates from credit risk and liquidity risk. We have already diversified into Micro Finance, Home Finance, Commercial Vehicles and budget to grow the new verticals so as to contain our exposure to gold to 50% of the total AUM in ten years.

Our geographical presence is largely in the southern India. We are now giving thrust for opening new branches in north and north eastern states which have high growth potentials. A geographical exposure limit will be fixed when operations of the new branches are stabilised.

The credit risk management policy of the Company seeks to have following controls and key metrics that allows credit risks to be identified, assessed, monitored and reported in a timely and efficient manner in compliance with regulatory requirements.

- Standardize the process of identifying new risks and designing appropriate controls for these risks.

- Maintain an appropriate credit administration and loan review system.

- Establish metrics for portfolio monitoring.

- Minimize Losses due to defaults or untimely payments by borrowers.

- Design appropriate credit risk mitigation techniques.

In order to mitigate the impact of credit risk in the future profitability, the company makes reserves basis the expected credit loss (ECL) model for the outstanding loans as balance sheet date.

The below discussion describes the Company's approach for assessing impairment as stated in the material accounting policies.

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

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 ow whether Stage 2 is appropriate.

Exposure at Default (EAD)

The outstanding balance at the reporting date adjusted for subsequent realisations in the case of Gold Loan, is considered as EAD by the Company. Considering that the PD determined above factors in amount at default, there is no separate requirement to estimate EAD.

The Company uses historical information where available to determine PD. Considering the different products and schemes, the Company has bifurcated its loan portfolio into various pools. For certain pools where historical information is available, the PD is calculated using Incremental NPA approach considering fresh slippage of past 6 years. For those pools where historical information is not available, the PD rates as stated by external reporting agencies is considered.

While estimating the expected credit loss, the company reviews macro-economic developments occurring in the economy and the market it operates in. Forward looking information is considered in addition to historical default rates to assess the probability of default for Stage 1 and Stage 2 of Loan contracts since it's initial recognition and its measurement of ECL. Accordingly, the company has assessed that the macro-economic variables that may impact credit risk are GDP growth, Interest and Inflation rates, Unemployment rates etc. Post management overlay, the PD percentages are mentioned below:

6) Onlending, Corporate Finance and Project and Industrial Finance Loan, external ratings or internal evaluation with a management overlay for each customer.

7) Personal Loans and other verticals, external ratings or internal evaluation with a management overlay for each customer industry segment.

* Excluding restructured loans, where in Vehicle loan Stage II restructured loans for CV-80% ,BUS -75% and CAR - 60% as at 31^st March, 2025.

** Excludes portfolio where PD has been considered at 100%

In case of Gold Loans, incremental NPA is considered after taking into account auctions during the year since such cases are auctioned and total dues are recovered even before the account turns NPA.

Loss Given Default

The Company determines its recovery rates by analysing the recovery trends over different periods of time after a loan has defaulted. Based on its analysis of historical trends, homogenous nature of the loans etc, the Company has assessed that significant recoveries happen in the year in which default has occurred.Recoveries from all the phases like normal collections, auction collections, repossession sale as well as expected realization from collateral are considered while computing the LGD rates for each loan portfolio. For different stages such as stage 1,stage 2 & stage 3 portfolios, we are applying same LGD rate except in case of loss assets and unsecured loans in stage 3 which is at 100%.

In all classified 'Loss Assets', LGD has been considered as 100%.

*In case of Gold Loan the Loan To Value(LTV), at the time of disbursement is below 75% (As per the RBI norms) and the remaining value (25%) of asset held by the company acts as a margin of safety, protecting the company against volatility in asset price.LTV is one of the factor for gradation of risk. Also it reflects in the fixing of interest rates of each type of Loans/ schemes. Normally fixing higher interest rate for Loans having higher LTV% and vice versa.

LGD Rates have been computed internally based on the discounted recoveries in NPA accounts that are closed/ written off/ repossessed and upgraded during the year. LGD rates for SME, corporate loans and other loans is considered based on proxy FIRB

rates for secured loans.

In estimating LGD, the company reviews macro-economic developments taking place in the economy. Based on internal evaluation, company has provided a management overlay in LGD computed for Vehicle and SME portfolios.

The Company has applied management overlays to the ECL Model to consider the impact of the Covid-19 pandemic on the provision. The adjustment to the probability of default has been assessed considering the likelihood of increased credit risk and consequential default due to the pandemic. The impact on collateral values is also assessed for determination of adjustment to the loss given default and reasonable haircuts are applied wherever necessary. The number of days past due shall exclude the moratorium period for the purposes of asset classification as per the Company's policy

As per the RBI guidelines , the ECL policy has been approved by Audit Committe and the Board.Modifications to the ECL model, if any, is approved by the Board. As part of the management overlays, as per the approved ECL policy, the management has adjusted the underlying PD as mentioned above and in case of corporate loan by downgrading the ratings to one level lower) and LGD as computed by ECL Model as mentioned above depending on the nature of the portfolio/borrower, the management's estimate of the future stress and risk and available market information. Refer note 5.2(vii) to the financial statements.

Asset & Liability management

Disclosures as required in Annex VII of RBI notification - RBI/DoR/2023-24/106 DoR.FIN.REC.No.45/03.10.119/2023-24 dated 19^th October, 2023 'Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023', as amended from time to time to the extent applicable.

Asset and Liability Management (ALM) is defined as the practice of managing risks arising due to mismatches in the asset and liabilities.

Company's funding consists of both long term as well as short term sources with different maturity patterns and varying interest rates. On the other hand, the asset book also comprises of loans of different duration and interest rates. Maturity mismatches are therefore common and has an impact on the liquidity and profitability of the company. It is necessary for Company's to monitor and manage the assets and liabilities in such a manner to minimize mismatches and keep them within reasonable limits.

The objective of this policy is to create an institutional mechanism to compute and monitor periodically the maturity pattern of the various liabilities and assets of Company to (a) ascertain in percentage terms the nature and extent of mismatch in different maturity buckets, especially the 1-30/31days bucket, which would indicate the structural liquidity (b) the extent and nature of cumulative mismatch in different buckets indicative of short term dynamic liquidity and (c) the residual maturity pattern of repricing of assets and liabilities which would show the likely impact of movement of interest rate in either direction on profitability. This policy will guide the ALM system in Company.

The scope of ALM function can be described as follows:

- Liquidity risk management

- Management of market risks

- Others

Liquidity Risk

Liquidity risk refers to the risk that the Company may not meet its financial obligations. Liquidity risk arises due to the unavailability of adequate funds at an appropriate cost or tenure. The objective of liquidity risk management is to maintain sufficient liquidity

and ensure that funds are available for use as per requirements. The Company consistently generates sufficient cash flows from operating and financial activities to meet its financial obligations as and when they fall due. Our resource mobilisation team sources funds from multiple sources, including from banks, financial institutions and capital markets to maintain a healthy mix of sources. The resource mobilisation team is responsible for diversifying fund raising sources, managing interest rate risks and maintaining a strong relationship with banks, financial institutions, mutual funds, insurance companies, other domestic and foreign financial institutions and rating agencies to ensure the liquidity risk is well addressed.

The table below provide details regarding the contractual maturities of significant financial assets and liabilities as on:-

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 Company is exposed to three types of market risk as follows:

Foreign Exchange Risk (FX Risk)

Forex Risk is a risk that exists when a financial transaction is denominated in a currency other than the domestic currency of the company. Any appreciation/depreciation of the base currency or the depreciation/appreciation of the denominated currency will affect the cash flows emanating from that transaction. The company has fully hedged the forex risk by derivative instruments.

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

We are subject to interest rate risk, principally because we lend to clients at fixed interest rates and for periods that may differ from our funding sources, while our borrowings are at both fixed and variable interest rates for different periods. We assess and manage our interest rate risk by managing our assets and liabilities. Our Asset Liability Management Committee evaluates asset liability management, and ensures that all significant mismatches, if any, are being managed appropriately.

The Company has Board Approved Asset Liability Management (ALM) policy for managing interest rate risk and policy for determining

the interest rate to be charged on the loans given.

The following table demonstrates the sensitivity to a reasonably possible change in the interest rates on the portion of borrowings affected. With all other variables held constant, the profit before taxes affected through the impact on floating rate borrowings, as follows:

Price Risk

The Company's exposure to price risk is not material. The drop in gold prices is unlikely to have a significant impact on asset quality of the company since the disbursement LTV is below 75% and average portfolio LTV as on the reporting period was 62% to 65% only.However the sustained decrease in market price may cause for decrease in the size of our Gold Loan Portfolio and the interest income.Management monitors the gold prices and other loans on regular basis.

Operational and business risk

Operational risk is the risk of Loss arising from systems failure, human error, fraud or external events. When controls fait 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, such as the use of internal audit. A Risk Management Committee comprising representatives of the Senior Management, reviews matters relating to operational and business risk, including corrective and remedial actions as regards people and processes.

Note 47: Loans and advances in the nature of loans given to subsidiaries and associates and Firms/ companies inwhich directors are interestedLoan given to wholly owned subsidiary:a) Manappuram Home Finance Limited

Balance as at 31^st March, 2025 : 'Nil (31^st March, 2024: ' Nil)

Maximum amount outstanding during the year ' 250 Mn (31^st March, 2024: ' 500Mn)

Maximum amount of undrawn credit line available with the subsidiary during the year: 1500 Mn (31^st March, 2024: 1500Mn)

b) Asirvad Micro Finance Limited

Balance as at 31^st March, 2025 : 'Nil (31^st March, 2024: 'Nil)

Maximum amount outstanding during the year ' Nil (31^st March, 2024: '2500 Mn)

Maximum amount of undrawn credit line available with the subsidiary during the year: 5000 Mn (31^st March 2024: 2500Mn)

Loan given to companies in which directors are interested: Nil (31^st March, 2024: 'Nil)(v) Top 20 Large Deposits

Not Applicable

(Vi) Institutional set up for liquidity risk management

The Board of Directors of the Company has an overall responsibility and oversight for the management of all the risks, including liquidity risk. The Board approves the governance structure, policies, strategy and the risk tolerance limit for the management of liquidity risk. The Board of Directors approves the constitution of Risk Management Committee (RMC) for the effective supervision and management of various aspects including liquidity risks faced by the company. The meetings of RMC are held at quarterly interval The Board of Directors also approves constitution of Asset Liability Committee (ALCO), consisting of the Company's top management which functions as the strategic decision-making body for the asset-liability management of the Company from risk-return perspective and within the risk appetite and tolerance limits approved by the Board. The role of the ALCO also includes periodic revision of interest rates, diversification of source of funding and its mix, maintenance of enough liquidity and investment of surplus funds. ALCO meetings are held once in a quarter or more frequently as warranted from time to time. The minutes of ALCO meetings are placed before the RMC and the Board of Directors in its next meeting for its perusal/approval/ratification.

Disclosures as required in Annex VII of RBI notification - RBI/DoR/2023-24/106 DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 'Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023', as amended from time to time to the extent applicable.

Note 59: Derivatives

As at 31^st March, 2025, the Company has recognised a net Market to Market (MTM) gain of '352.12 Mn (31^st March, 2024 '82.58Mn Loss) relating to derivative contracts entered to hedge the foreign currency risk of future interest payment on fixed rate foreign currency denominated bond and foreign currency term loan, repayment of fixed rate foreign currency denominated bond and loans designated as cash flow hedges, in Hedging Reserve Account as part of the Shareholders' funds. Refer to Note no. 17' Derivative Financial Instruments'.

Details of outstanding derivative contracts as at the year end.

Exchange Traded interest rate (IR) derivatives : NIL Disclosures on risk exposure of derivatives Qualitative disclosures

The Company has a Board approved policy in dealing with derivative transactions. Derivative transaction consists of hedging of foreign exchange transactions, which includes interest rate and currency swaps, interest rate options and forwards. The Company undertakes forward contracts for hedging on-balance sheet assets and liabilities. Such outstanding derivative transactions are accounted on accrual basis over the life of the underlying instrument. The Finance Resource Committee and Risk Management Committee closely monitors such transactions and reviews the risks involved.

Note 60: Disclosures as required in Annex II-A of RBI notification - RBI/DoR/2023-24/106 DoR.FIN.REC. No.45/03.10.119/2023-24 dated 19^th October, 2023 'Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023', as amended from time to time to the extent applicable.

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 solely for comparative purposes as specified therein. A comparison between provisions required under IRACP and impairment allowances made under Ind AS 109 is given below:

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 The Company computes the LCR and reports the same to the Asset Liability Management Committee (ALCO) every month for review 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 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).

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/limitsdecided by itfrom time to time.The ALM Committee of the Board of Directors shall be responsible for evaluating the liquidity risk.Further details regarding management responsibilities on Liquidity Risk Management is disclosed under note 56(vi).

Note 64:Disclosure as per amended Schedule III to the Companies Act,201364A:Disclosure on the following matters required under Schedule III as amended not being or applicable in case of the company,same are not covered such as

a) No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Property (Prohobition) Act ,1988 (45 of 1988)and the rules made thereunder.

b) The company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

c) No registration or satisfaction of charges are pending to be filed with ROC.

d) The company has not entered into any scheme of arrangement.

e) There are no transactions which have not been recorded in the books.

f) The company has not traded or invested in crypto currency or virtual currency during the financial year.

g) There are no significant regroupings/re-classification for the year under audit.

h) There are no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (Such as, search or survey or any other relevent provisions of the Income Tax Act, 1961.

i) For the financial year ended 31^st March, 2025 and previous year ended 31^st March, 2024, the quarterly statements or returns filed by the Company with banks/ financial institutions are in agreement with books of accounts.

64B:Utilisation of Borrowed funds or share premium

(i) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies),including foreign entities("Intermediaries”), with the understanding,whether recorded in writing or otherwise,that the Intermediary shall,whether, directly or indirectly lend to 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.

(ii) No funds 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,whether, directly or indirectly lend to 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 66: Breaches in terms of covenants in respect of loans availed by the NBFC or debt securities issued by the NBFC including incidence/s of default.

There were no instances of default or breaches of covenant in respect of Loan availed or debt securities issued during the financial years ended 31^st March,2025 and 31^st March, 2024.

Note 67: Unhedged foreign currency exposure

The company does not have any Unhedged foreign currency exposure as on 31^st March, 2025. Although, the company holds foreign currency notes as disclosed in Note 8 - Cash and Cash Equivalents amounting to ?1.16 Mn (FY 2023-24 - '0.65 Mn)

Note 69:Disclosure under covid resolution plans

Detail of resolution plans implemented under the "Resolution framework for COVID-19-reLated Stress” as per the RBI notification no. RBI/2020-21/16 D0R.N0.BP.BC/3/21.04.048/2020-21 dated 06^th August, 2020 and RBI/2021-22/31 DOR.STR. REC.11/21.04.048/2021-22 dated 05^th May, 2021 as at 31^st March, 2025 are given beLow.The resolution plans were based on the parameters laid down in the resolution policy approved by the Board of Directors of the Company and in accordance with the guidelines issued by the Reserve Bank of India.

Note 70:MSME Restructuring disclosure

The disclosure as required under RBI notification No.RBI/2020-21/17 D0R.No.BP.BC/4/21.04.048/2020-21 on Micro, SmaLL and Medium Enterprises (MSME) sector - Restructuring of Advances dated 06^th August, 2020, and under RBI Notification No.RBI/2021-22/32 D0R.STR.REC.12/21.04.048/2021-22 dated 5^th May, 2021 are as follows:

During the year the subsidiary company Manappuram Home Finance Limited have availed and repaid Loan ' 250 Mn @ Int. Rate. 10.15%

Note 73: Divergence in asset classification and provisioning above a certain threshold to be decided by the Reserve Bank.

The RBI has neither assessed any additional provisioning requirements in excess of 5 % of the reported profits before tax and impairment loss on financial instruments for the financial year ended 31^st March, 2024, nor identified any additional Gross NPA in

excess of 5 % of the reported gross NPA for the said period.

Note 74: Items of income and expenditure of exceptional nature.

On July 26,2024, the Company was informed by its Subsidiary namely Manappuram Comptech and Consultants LtdCMACOM”),

providing IT Support Services to the Company, of instances of embezzlement of funds of the Company to the extent of approximately '197.77 Mn through unauthorized access. The Management of MACOM appointed an independent consultant to carry out an

investigation, who concluded its investigation and confirmed through its report dated October 19,2024 that no incremental instances of embezzlemet of funds were noted by them and the assessed loss remains the same to the extent of '197.77 Mn as determined during the preliminary findings. Considering that an employee of MACOM was involved in the embezzlement of funds, the Company has submitted a recovery plan to MACOM for '197.77 Mn, which had been approved by the Board Of Directors of MACOM in its meeting held on November 1,2024 after considering the financial position of MACOM and its income and other relevant aspects,which will facilitate the recovery of the dues over a period of 4 years, for which the Company has entered into a settlement agreement dated November 5,2024 with MACOM. Since the amount of '197.77 Mn is fully recoverable from MACOM, there is no additional impact, which needs to be accounted in the Standalone Financial Statements for the year ended March 31,2025.

During the reporting period, the company has accounted for compensation receivable of '197.77 Mn for losses suffered due to fraudulent activities. This compensation is considered as an exceptional item due to its nature and size. The compensation has been recognized in the Profit & Loss Statement as an exceptional item, reflecting its non-recurring nature. This treatment aligns with the relevant accounting standards and provides a clear view of the company's operational performance.There is an income of exceptional nature of '197.77 Million for the financial years ended March 31, 2025.

Note 75:Disclosure on modified opinion,If any,expressed by auditors,its impact on various financial items and views of management on audit qualifications

The auditors have expressed an unmodified opinion on the standalone financial statements of the Company for the financial years ended 31^st March, 2024 and 31^st March, 2025.

Note 76: Disclosure on Long Tem Contracts

The company did not have any long-term contracts including derivative contracts for which there were any material foresseeable losses.

Note 77: Disclosure on Investor Education and Protection Fund

During the year ended 31^st March, 2025, the Company has transferred an amount of ' 6.95 million representing unclaimed dividends and unpaid NCD to the Investor Education and Protection Fund, in accordance with the provisions of Section 124(5) of the Companies Act, 2013.

Furter, the company had initiated the process of transferring amounts pertaining to Unpaid Dividend (INR 0.86 million) to the Investor Education and Protection Fund (IEPF) well before due date. But due to technical glitches in MCA portal and change over from V2 version to V3 version, process got delayed and had filed the e-form IEPF - 1 with MCA after due date which was beyond the control of Company. Due care has been taken in filing e-form with MCA within due date.

Note 78: Unsecured advances

The Company has not granted unsecured advances against collateral of intangible securities such as charge over the rights, licenses or authority.

Note 79: Whistle- Blower Complaints

There were Nil complaints received by the company during the financial years ended 31^st March, 2025 and 31^st March, 2024.

Note 80: Audit Trail

The Company uses accoutnting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year (at application level and at database level) for all relevant transactions recorded in the software. Further, the audit trail has been preseved by the Company as per statutory requirements for record retention.

Note 81: Details of financing of parent company products

The Company does not have any parent company, hence not applicable.

Note 82: Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform current year's classification.