XI. Provisions, Contingent liabilities and Contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, 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. The expense relating to a provision is charged/
provided in the statement of profit and loss.

The Company does not recognize a contingent liability but discloses its existence in the financial statements
Contingent liability is disclosed in the case of:

• A present obligation arising from past events, when it is not probable that an outflow of resources will not be
required to settle the obligation

• A present obligation arising from past events, when no reliable estimate is possible

• A possible obligation arising from past events, unless the probability of outflow of resources is remote
Contingent liabilities are reviewed at each reporting date.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an
inflow of economic benefits to the entity. Contingent assets are recognized when the realization of income is virtually
certain, then the related asset is not a contingent asset and its recognition is appropriate. Contingent assets are
reviewed at each reporting date. A contingent asset is disclosed where an inflow of economic benefits is probable.

Summary of Other Accounting policies Information

la. Property, plant and equipment (PPE) and intangible assets

PPE are stated at cost (including incidental expenses directly attributable to bringing the asset to its working condition
for its intended use) less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price
and any attributable cost of bringing the asset to its working condition for its intended use.

Subsequent expenditure related to PPE is capitalized only when it is probable that future economic benefits associated
with these will flow to the Company and the cost of item can be measured reliably. Other repairs and maintenance
costs are expensed off as and when incurred.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is recognised in the statement of profit and loss when the asset is derecognised.

An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow to the Company. Intangible assets acquired separately
are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and any accumulated impairment losses.

When the use of a property changes from Owner occupied to Investment Property , the property is reclassified as
Investment Property at its carrying amount on the date of reclassification.

lb. Investment Properties

The flats classified as Investment Property are purchased for the staff. However, in view of no requirement by the staff
members, they were given to the Parent Bank employees only for a period of 11 months with two/ more extensions.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

The cost includes the cost of replacing parts and borrowing cost for long term construction projects if the recognition
criteria are met. When significant parts of the investment property are required to be replaced at intervals, the
company depreciates them separately based on their specific useful lives. All other repair and maintenance costs
are recognised in statement of profit or loss as incurred.

The company depreciates investment property over 60 years from the date of original purchase.

Though the company measures investment property using cost based measurement, the fair value of investment
property is disclosed in the Note of the financial statements where applicable.

When the use of a property changes from Investment Property to Owner occupied, the property is reclassified as
Property, Plant and Equipment at its carrying amount on the date of reclassification.

Investment properties are derecognised either when they have been disposed off or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net
disposal proceeds and the carrying amount of the asset is recognised in statement of profit or loss in the period of
derecognition.

Ic. Depreciation on Property, plant and equipment, Investment Properties and Amortization of intangible assets

The depreciation on the Property plant and equipment is calculated on a Written Down Value (WDV) basis using the
rates arrived at, based on useful lives estimated by the management, which coincides with the lives prescribed under
Schedule II of the Companies Act, 2013. Residual value of Land and Building and Vehicles is taken as 5 percent of
the original cost, whereas for assets other than those specified above the residual value is taken as Re.1.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered
to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss.

II. Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.

Company as a lessee:

The Company’s lease asset classes primarily consist of leases for buildings. The Company assesses whether a
contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract
involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the
asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the
lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the
lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever

events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is
determined on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU)
to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the Incremental borrowing rates in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will
exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet.

Leases which have expired have not been accounted as per Ind AS 116.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the
lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance
lease. All other leases are classified as operating leases.

For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.

III. Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the company estimates the asset’s
recoverable amount. An asset‘s recoverable amount is the higher of an asset’s fair value less costs of disposal and its
value in use (i.e. the present value of the future cash flows expected to be derived from an asset or cash generating
unit). The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or Company of assets. When the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Impairment loss, if any, will be charged to statement of profit and loss, unless the asset is carried at revalued amount
in accordance with another standard. Any impairment loss of a revalued asset shall be treated as a revaluation
decrease in accordance with that other standard.

IV. Employee Benefit Expenses

Employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after
the end of the annual reporting period in which the employees render the related service are classified as short-term
employee benefits. Benefits such as salaries, wages and bonus etc.,are recognised in the statement of profit and
loss in the period in which the employee renders the related service.

Defined contribution plan

Retirement benefit in the form of provident fund is a defined contribution scheme and the contributions are charged
to the Statement of Profit and Loss of the period when the contributions to the respective funds are due. There are
no other obligations other than the contribution payable to the respective fund.

Defined benefit Plan

Leave liability is defined benefit obligation which is unfunded. The cost of providing benefits under the defined benefit
plan is determined using the projected unit credit method with actuarial valuations being carried out at each reporting
date. Gratuity under the employee group gratuity cum life insurance scheme of LIC is defined benefit obligation,
which is funded, and the cost of providing benefits under the defined benefit plan is determined using the projected
unit credit method provided by LIC.

Post-Retirement Medical Benefit expense is borne by the company for all the superannuated employees who have
served the company for a minimum of ten years and their spouses. The cost of providing such benefits is determined
using the projected unit credit method with actuarial valuations being carried out at each reporting date.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in
net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding
debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Re¬
measurements are not reclassified to profit or loss in subsequent periods.Past service costs are recognised in profit
or loss on the earlier of:

i. The date of the plan amendment or curtailment, and

ii. The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company
recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and
loss:

i. Service costs comprising current service costs, past-service costs, gains and losses on curtailments and
non-routine settlements; and

ii. Net interest expense or income

V. Statement of Cash flow

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effect of transactions
of a non cash nature, any deferral or accruals of past and future operating cash receipts or payments and items of
income associated with investing or financing cash flows.

VI. Dividend to share holders

The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised
and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is
authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

VII. Corporate Social Responsibility ('CSR') expenditure

The Company charges its CSR expenditure during the year to the statement of profit and loss.

VIII. Significant Judgement and Estimates

The preparation of the financial statements in conformity with Indian Accounting Standards ('Ind AS) requires the
management to make estimates, judgements and assumptions. These estimates, judgements and assumptions
affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the year. Accounting estimates could change from period to period. Actual results could differ
from those estimates. Revisions to accounting estimates are recognised prospectively. The Management believes
that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could
differ due to these estimates and the differences between the actual results and the estimates are recognised in the
periods in which the results are known / materialise. Some of the areas involving significant estimation / judgement
are determination of Expected Credit Loss, Fair valuation of Investments, Income taxes and Employee benefits.

IX. Prior Period Items

The prior period items are identified as those that result from errors or omissions in the financial statements of
previous periods. The material prior period items shall be corrected retrospectively in the financial statements.

An item from the prior period will be considered material if it constitutes 2% of the main expense/ income head
respectively as per Statement of Profit & Loss of the last audited financial statements to which it pertains.

^A As at 31st March, 2025, Rs. 13.00 lacs are in the joint name of the company with NSEIL and Rs. 20,000 lacs
pledged with PNB against which overdraft facility is taken, hence not freely available for use of the company.

# As at 31 March, 2024, Rs. 2469.60 lacs have been lien for Initial Public Offer of SRM Contractors Limited

a As at 31st March, 2024, Rs. 13.00 lacs are in the joint name of the company with NSEIL hence not freely available
for use of the company.

Note 5: Derivative financial instruments

The company enters into derivatives for risk management purposes and trading purposes. The notional amounts
indicate the value of transactions outstanding at the year end and are not indicative of either the market risk or credit
risk. The table below shows the fair values of derivative financial instruments recorded as assets or liabilities together
with their notional amounts. For management of risks, see note 41.

The Company is providing custodian services to its constituents and total holdings of 94 (P.Y. 93) constituents in
government securities as at 31st March, 2025 in SGL II with RBI is Rs. 84,80,594.80 lacs (P.Y. Rs. 87,18,875.40
lacs)

(#) The Portfolio (Government Security) measured at amortised cost is as per the Company business model to hold
Investment in order to collect contractual cash flows as per the contractual terms that give rise on specified dates to
cash flows that are solely payment of principal and interest (‘SPPI’) on the principal amount outstanding.

Accordingly, the company has classified Government Securities of Rs. 1,05,151.30 lacs.(P.Y 2,46,628.93 lacs) at
amortized cost out of the total investment out of which the interest accrued on the same is Rs.1,932.90 lacs (P.Y.
3929.14 lacs) during the year ended March 31,2025. If the company would have classified these investments under
the fair value through profit and loss (FVTPL) category, the MTM impact on the Statement of Profit and Loss would
be Rs 1169.52 lacs (P.Y 7262.76 lacs).

(a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting
year.-NIL (P.Y.-NIL)

(b) the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium Enterprises
Development Act, 2006, alongwith the amount of the payment made to the supplier beyond the appointed day
during each accounting year.-NIL (P.Y.-NIL)

(c ) the amount of interest due and payable for the period of delay in making payment (which have been paid but
beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and
Medium Enterprises Development Act, 2006; -NIL (PY-NIL)

(d) the amount of interest accrued and remaining unpaid at the end of each accounting year;-NIL (P.Y. NIL) and

(e) the amount of further interest remaining due and payable even in the succeeding years, until such date when
the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible
expenditure under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.-NIL (P.Y.
NIL)

1 All the borrowings are of short term in nature and are repayable within 12 months with a fixed rate of interest.
There is no default as on the balance sheet date in repayment of borrowings and interest thereon.

2 During the year, Net Average and Peak borrowings in Call money amounted to Rs. 2,27,619 lacs and Rs.
3,54,665 lacs respectively(Previous year 2024 Net Average and Peak borrowings - Rs. 2,30,737.52 lacs and Rs.
3,79,810.00 lacs respectively). For the year 2025, average and peak leverage ratio stands at 14.09 and 18.05
respectively (Previous year 2024 average and peak leverage ratio stands at 15.89 and 18.69 respectively).

3 Pledge of Security Face Value for FY ended 2024-2025- Rs. 5,34,426.80 lacs and Book Value Rs. 5,26,496.23
lacs - (Pledge of Security Face Value for Previous Year 2024- Rs. 2,87,200.50 lacs and Book value
Rs. 2,66,397.03 lacs).

4 Pledge of Security Face Value for FY ended 2024-2025- Rs. 4,56,366 lacs and Book value- Rs. 4,56,903.06
lacs(Pledge of security Face Value for Previous Year 2024-Rs. 67,921 lacs and Book value Rs.67,070.84 lacs).

5 Pledge of Security Face Value for FY ended 2024-2025- Rs. 8,47,982.00 lacs and Book value Rs. 8,44,158.21
lacs (Pledge of security Face Value for Previous Year 2024- Rs. 16,22,957.00 lacs and Book value
Rs. 15,78,659.88 lacs).

6 Pledge of Security Face Value for FY ended 2024-2025- Rs. 25100 lacs and Book Value- Rs. 25534.47
lacs(Pledge of security Face Value for Previous Year 2024-Rs. 19000.00 lacs and Book value Rs.19147.49
lacs).

Rights, preferences and restrictions attaching to each class of shares including restrictions on the
distribution of dividends and the repayment of capital:

The company has only one class of shares having a par values of Rs. 10 per share. Each holder of equity shares
is entitled to one vote per share. Dividend distribution is for all equity shareholders who are eligible for dividend as
on record date. In the event of liquidation of the company, the holders of equity shares will be entitled to receive
remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion
to the number of equity shares held by the shareholders.

Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment,
including the terms and amounts : NIL (Previous Year : NIL).

For the periods of five years immediately preceding the date as at which the Balance Sheet is prepared:

a. Aggregate number and class of shares allotted as fully paid pursuant to contracts(s) without payment
being received in cash : NIL (Previous year: NIL).

b. Aggregate number and class of shares allotted as fully paid -up by way of bonus shares is: The Company
issued bonus shares in August, 1999 and number of equity shares issued as bonus were 2,50,00,000 and in July,
2013 and the number of equity shares issued as bonus were 4,49,92,534. Aggregate of equity shares issued as
bonus shares are 6,99,92,534. During current year, equity shares issued as bonus shares NIL (Previous Year: NIL).

c. Aggregate number and class of shares bought back: NIL (Previous year : Nil)

Terms of any securities convertible into equity shares issued along with the earliest date of conversion in
descending order starting from farthest such date: Nil (Previous Year : Nil)

Calls unpaid (showing aggregate value of calls unpaid by directors and officers): Nil (Previous Year : NIL)
Forfeited Shares (amount originally paid up) : NIL (Previous Year : Nil)

- A sum of Rs.4660.61 lacs (P.Y. 2024 Rs.1388.21 lacs) (20 per cent of Profit After Tax) has been transferred to
Statutory Reserve Fund as per RBI Guidelines. The same is not free for distribution of dividend.

- Market Fluctuation Reserve - For the financial year 2024-25, Board of Directors had decided not to appropriate any
amount to this reserve and the balance outstanding as on 31st March, 2025 in this reserve is Rs.6300 lacs (P.Y.
2024 Rs.6300 lacs). The same is not free for distribution of dividend.

- The Board of Directors have recommended a final dividend of Re.1 per equity share( P.Y. Re. 1/sh) amounting to
Rs.1800.10 lacs for FY 24-25 (P.Y. 1800.00 lacs) after the balance sheet date. The same is subject to approval by
the shareholders at the ensuing Annual General Meeting of the company and therefore proposed final dividend of
Rs. 1800.10 lacs (P.Y. Rs. 1800.00 lacs) has not been recognised as a liability as at the balance sheet date.

- The company has made a policy choice to recognise the effect of Taxation Laws Amendment Ordinance 2019 ('the
Ordinance') for the financial year ended 31st March, 2025. Accordingly, the effective tax rate for the FY ended 24¬
25 is 25.168%.

Nature and purpose of reserves:

(a) Statutory reserve - Statutory reserve is created pursuant to section 45-IC of Reserve Bank of India Act. 1934.
Company shall transfer therein a sum not less than 20% of its net profit every year as disclosed in the Statement
of profit and loss and before any dividend is declared. No appropriation of any sum from the reserve fund shall
be made by the Company except for the purpose as may be specified by RBI.

(b) Securities premium - Securities premium is used to record the premium on issue of shares. 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.

(c) General reserve - General reserves are the free reserves of the Company which are kept aside out of company’s
profits to meet future obligations. General reserves is a free reserve which can be utilised for any purpose after
fulfilling certain conditions. No amount has been transferred to general reserve during the year ended 31st
March, 2025 and 31st March, 2024.

(d) Capital reserve - Capital reserve represents the amount of net profit (after tax) through sale of securities from
HTM category of investments maintained as per earlier RBI guidelines. The same will be utilized as per the
regulatory guidelines and is not free for distribution of dividend.

(e) Market fluctuation reserve - The Board of Directors, in its meeting held on January 9, 2003, had decided to
build up Market Fluctuation Reserve over a period of time with the cap equal to paid up capital of the company.
At the time of adoption of annual accounts each year, the Board may decide the quantum of amount to be
transferred to this Reserve, if necessary. The same is not free for distribution of dividend.

(f) Retained Earnings - These represent the surplus in the statement of profit and loss and is free for distribution of dividend.

An amount of Rs. 2667.17 lacs on account of investment and interest accrued was written off from the books of
accounts in respect of 9.60% SREI Equipment Finance Limited DB 25-05-2028 in FY 21-22. However, in the current
FY 24-25 an amount of Rs. 69.19 lacs (P.Y. Rs. 267.60 lacs) has been received. Also, an amount of Rs. 9.09 lacs
received on 17.04.2025 has been accounted in the current financial year aligning with Ind AS 10- Events after the
Balance Sheet Date. Till date a total of Rs. 345.88 lacs has been received.

#3

An amount of Rs. 100.00 lacs was received during the current FY (P.Y. Rs. 100 lacs) from Madhavpura Mercantile
Cooperative Bank Limited (MMCBL) under liquidation proceedings to whom Rs. 1000.00 lacs was lent in call money
in the year 2001. An amount of Rs. 761.88 lacs was to be received from MMCBL and the same was written off from
the books in the year 2016. Till date the total amount received from MMCBL is Rs. 412.00 lacs

Note 32: Earnings Per Equity Share (EPS)

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of Company
by the weighted average number of equity shares outstanding during the year.

Diluted EPS is calculated by dividing the net profit attributable to equity holders of Company after adjusting for the
effect of dilution, by the weighted average number of equity shares outstanding during the year plus the weighted
average number of equity shares that would be issued on the conversion of all the dilutive potential ordinary shares
into equity shares.

Note 34

1. FVTPL financial assets

Ind AS requires FVTPL investments to be measured at fair value and account for both depreciation and appreciation
in fair value.

2. Derivative adjustment

Under Ind AS all the Derivatives contracts (Hedging as well as Trading purpose) are measured at Fair value and both
depreciation as well as appreciation will be accounted for.

Also, Credit Value Adjustment has been recorded under Ind AS for outstanding derivative liabilities under Ind AS.

3 Fair value of Staff loans

Under Ind AS loans are fair valued and the difference between Fair value and nominal value is recognized as
employee cost. This benefit is passed over the tenure of the loan and not on origination, so employee cost would
be deferred over the tenure of the loan/ remaining service period whichever is shorter. Also interest income is
redetermined by the market rate and the differential amount is charged under Interest income.

4 Defined benefit liabilities

Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts
included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI.

5. Amortised Cost Financial Assets

Under this category, Ind AS requires it to be measured as per Effective Interest Rate Method and no mark to market
needs to be done.

6. Company's consultants:

Tax Consultant- KYSB and Associates
Actuary-Sodhi Tripathi Actuaries and Consultants LLP
GST Consultant- A.K. Batra and Associates

The above contingent liabilities will be increased by the interest payable for delay in payment and penalties, if any.
The amount is not quantified.

The company has assessed the uncertain tax positions and concluded that there is no any such position which
requires disclosure as a contingent liability.

Note 39: Segment Information

The company has been granted the License of NBFC by the Reserve Bank of India and working as a Standalone
Primary Dealer.The Company's primary activities entail supporting government borrowing program via underwriting
of government securities issuances and trade in a gamut of fixed income instruments such as Government
securities, Treasury Bills, State Development Loans, Corporate Bonds, Interest Rate Swaps and various money
market instruments such as Certificates of Deposits, Commercial Papers etc. This is the only activity performed and
is thus also the main source of risks and returns. The Company’s segments as reviewed by the Chief Operating
Decision Maker (CODM)/ Management, does not result into identification of different ways/ sources into which they
see the performance of the Company. Accordingly, the company has a single reportable and geographical segment
i.e Treasury operations and operating in India respectively. Hence, the relevant disclosures as per Ind AS 108,
Operating Segments are not applicable to the company.

Note 41: Risk Management
Introduction and risk profile

The company is primarily a dealer in debt and money market instruments. In view of the intrinsic nature of operations,
the company is exposed to a variety of risks, which can be broadly classified into credit risk, market risk and liquidity
risk. It is also subject to various regulatory risks and operational risks. Well-established systems and procedures
provide adequate defense against the regulatory and operational risk.

Risk management struture and policies

In terms of RBI guidelines for NBFCs, the Risk Management Committee, has been entrusted with the responsibility
by the Board in laying down procedures for risk assessment and minimization. The Committee also reviews these
procedures periodically to ensure that executive management is implementing and controlling the risks through means
of a properly defined risk framework. Risk Management Policy is reviewed by the Risk Management Committee and
on the basis of the Committee’s recommendation, the Board approves the same. PVBP (Price value of a basis point)
limit on the entire marked to market portfolio stands at 0.50% of audited NOF or quarter end NOF (whichever is
lower) . The one day VaR limit stands at 7.5% of audited NOF or quarter end NOF (whichever is lower) on the entire
marked to market portfolio. Leverage limit stands at 20 times quarter end Board approved NOF, while Non banker
borrowing limit stands at Rs. 25,000 crore.

(A) Liquidity risk

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of
the possibility that the Company might be unable to meet its payment obligations when they fall due as a result of
mismatches in the timing of the cash flows under both normal and stress circumstances.

The Company manages its liquidity requirement by analysing the maturity pattern of Company's cash flows of financial
assets and financial liabilities. The Asset Liability Management of the Company is periodically reviewed by the Board.

The Liquidity Coverage Ratio (LCR) as on 31.03.2025 is 62.66 (P.Y. 65.41). This ratio is not applicable on Primary
Dealers. The LCR is calculated by dividing High-Quality Liquid assets (HQLA) by its total net cash flows over a 30
day stress period.

The table below summarises the maturity profile of the undiscounted cash flows of the Company’s financial liabilities
as at 31st March, 2025:

(B) Credit Risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their
contractual obligations. Counterparty exposure limits and instrument-wise exposure limits are the primary tools used
for managing the credit risk in the business. The company uses the Current Exposure (CE) method for calculating
credit exposure on derivative transactions as mentioned in RBI’s capital adequacy guidelines for Primary Dealer’s.

Analysis of risk concentration

In terms of paragraph 18 of the RBI notification DNBS (PD) CC No.178/03.02.001/2010-11 dated 1st July 2010, all
the non-deposit taking non-banking financial companies shall adhere to the specific regulations limiting concentration
in credit / investment to a single borrower or group of borrowers in a company. However, these concentration/ceilings
would not be applicable where principal and interest are fully guaranteed by the Government of India. The maximum
credit exposure, to any single borrower or counterparty was Rs. 31,500.00 lacs (P.Y. 2024 Rs.30,000.00 lacs) and
to single group of borrower or counterparty was Rs. 45,570.00 lacs (P.Y. 2024 Rs. 35,900.00 lacs), before and after
taking into account collateral or other credit enhancements.

There has not been any breach in extant exposure norms limit in terms with Master Direction-Standalone Primary
Dealers (Reserve Bank) Directions, 2016 (RBI/DNBR/2016-17/42 Master Direction DNBR.PD.004/03.10.119/2016-
17.

(C) Market Risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in
market variables such as interest rates and equity prices. Value-at-Risk (VaR), Price Value of a Basis Point (PVBP)
limits, sensitivity analysis and cut-loss policies form the core of market risk management system. Impact of interest
rate movements on the business and earnings profile, is mitigated by operating within a well-defined proactive stop
loss limit and value-at-risk (VaR) limit. The company also conducts sensitivity analysis of its portfolio to assess
impact of parallel and non-parallel shifts in the yield curve on its earnings profile. Risk concentrations are restricted
with specific limits mentioned above.

Market risk - trading

Internal Value-At-Risk model( VaR model) is performed to compute the market risk of trading portfolio. For computing
market risk, the Company uses the historical simulation non-parametric approach. Under this approach, the risk
measure is an estimate of the amount that could be lost on trading portfolio in a 1 day holding period due to general
market movements such as Interest rate risk, Spread risk, price risk etc over 250 trading days, at 99% confidence
level.

Objective

Historical Simulation is the procedure for predicting value at risk (VaR) by “simulating” or constructing the cumulative
distribution function of asset returns over time. It does not require any statistical assumption beyond stationarity of
the distribution of returns or, in particular, their volatility.

Limitation:

The limitation of the historical simulation lies in its I.I.D. (independent, identically distributed ) assumption of returns.
From empirical evidence, it is known that asset returns are clearly not independent as they exhibit certain patterns
such as volatility clustering. Unfortunately historical Simulation does not take into account such patterns.

I. Random chance (a very low probability event).

II. Markets moved by more than the likely prediction of the model (i.e. volatility was significantly higher than expected).

III. Markets did not move together as expected (i.e. correlations were significantly different than what was assumed
by the model).

Back testing

It is the Company’s policy to perform regular back-testing to validate the Company’s VaR calculations. When back¬
testing, the Company compares daily profits and losses with the estimates derived from the Company’s VaR model.
The Company presents the results of back-testing to the RBI quarterly.

During 2024-25, the Company recorded two back-testing exceptions (2023-24: one exception), when hypothetical
losses exceeded one day VaR limit and no back testing exceptions on comparison of actual losses with one day VaR.

Market risk - Non trading

Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values
of financial instruments. The Company have fixed rate bank deposits, non traded govt securities and borrowings and
hence not exposed to interest rate risk as far as these financial instruments are concerned.

Note 42 Fair value measurement

42.1 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 (i.e., an exit
price), regardless of whether that price is directly/ indirectly 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.

42.2 Valuation governance

The Company's fair value methodology and the governance over its models includes a number of controls and
other procedures to ensure appropriate safeguards are in place to ensure its quality and adequacy. All new product
initiatives (including their valuation methodologies) are subject to approvals by the management. The responsibility
of ongoing measurement resides with the risk department.

Government Securities (Central Government Securities and State Government Securities)

Government securities are financial instruments issued by Central and State Govenments. The valuation under this
category is done on the basis of prices provided by Financial Benchmarks India Private Limited (FBIL) and hence
classified as level 2.

Treasury Bills (T-Bills)

Treasury Bills are short-term financial instruments issued by sovereign governments. FBIL has developed the FBIL-
TBILL, a benchmark for the money market based on Treasury bills traded in the market. FBIL-TBILL is announced for
fourteen tenors of 7 days, 14 days, 1 month, 2 months, 3 months, 4 month, 5 months, 6 months, 7 months, 8 months,
9 months, 10 months, 11 months and 12 months. FBIL-TBILL is calculated on the basis of secondary market trades
executed. For Valuation, company use FBIL-TBILL benchmark and based on that benchmark company interpolate
and calculate T-Bills prices corresponding to there residual maturities and are classified as Level 2.

Certificate of Deposits (CD)

Certificate of Deposits are short-term financial instruments issued by Banks. FBIL has developed the FBIL- CD,
a new benchmark for the money market based on traded CDs reported on the FIMMDA Trade Reporting and
Confirmation System (FTRAC) platform of CCIL. FBIL-CD is announced for seven tenors of 14 days, 1 month, 2
months, 3 months, 6 months, 9 months and 12 months. For Valuation, company use FBIL-CD benchmark and based
on that benchmark company interpolate and calculate CD prices corresponding to there residual maturities and are
classified as Level 2.

Commercial Papers (CP)

Commercial Paper is a monetary instrument issued by corporate bodies in the nature of promissory note. The issue
of commercial papers is highly regulated and supervised by the Reserve Bank of India (RBI). Commercial Papers are
reported on the FIMMDA Trade Reporting and Confirmation System (FTRAC) platform. As currently, CP curve is not
published by FBIL/FIMMDA till then for valuation, company shall use market observable spread over T-Bill curve and
based on that new benchmark ( T-Bill constant Spread across the curve) company shall interpolate and calculate
CP prices corresponding to the residual maturities. Investments in CPs shall be classified as Level 2.

Corporate bonds and debentures

Whilst most of these instruments are standard fixed or floating rate securities, some may have more complex coupon
or embedded derivative characteristics. For valuation, Company uses FIMMDA provided SLV valuation for plain

vanilla bonds as well as FIMMDA provided last 15 days market prices when available, or other observable inputs
(i.e. FIMMDA credit spread matrix and G-sec par curve) in discounted cash flow models . As corporate bonds and
debenture fair valuations are based on the FIMMDA methodology, either directly (i.e. as prices) or indirectly (i.e.
derived from related curve and spread), such instruments are classified as Level 2.

Equity instruments

The equity instruments are actively traded on public stock exchanges with readily available active prices on a regular
basis. Such instruments are classified as Level 1. All the company's equity instruments are traded ones.

Mutual Funds

Units held in Liquid debt mutual funds are valued based on their AMFI published net asset value (NAV), such
instruments are classified under Level 1.

Exchange traded derivative

These derivative instruments are actively traded on public stock exchanges with readily available active prices on a
regular basis. Such instruments are classified as Level 1. All the company's exchange traded derivatives are traded
ones.

Interest rate derivatives

Interest rate derivatives include interest rate swaps. 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. Company is having all the Level 2 interest rate derivatives.

42.5 There have been no transfers between Level 1, Level 2 and Level 3 for the year ended 31st March, 2025 and
31st March, 2024.

42.6 Valuation adjustments

Credit and Debit valuation adjustments (CVA/DVA)

The Company calculates CVA/DVA on a counterparty basis over the entire life of the exposure. CVA is calculated by
multiplying the probability of default (PD), the loss given default (LGD) and the expected exposure (EE) at the time
of default.

A Debit valuation adjustment (DVA) is applied to incorporate the company's own credit risk in the fair value of
derivatives (i.e., the risk that the company might default on its contractual obligations), using the same methodology
as for CVA (i.e., applying the company's PD and multiplying it with LGD and EE).

The Company applies CVA and DVA to all relevant (not fully collateralised) over-the-counter positions with the
exception of positions settled through central clearing houses. During the FY 2024-25, there was no over the counter
position in the derivative segment. Hence, CVA and DVA have not been calculated for this financial year.

42.7 Impact of valuation adjustments

The following table shows the amount recorded in the statement of profit and loss:

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 Company's financial statements. These fair values were
calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments
in the above tables

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, balances other than cash and cash equivalents, loans, other financial assets, trade
payables, Short term borrowings and other financial liabilities .

Financial asset at amortised cost

These includes staff loans . The carrying amount of such loans after applying Effective Interest Rate are a reasonable
approximation of their fair value.

Government Securities (Central Government Securities and State Government Securities)

Government securities are financial instruments issued by Central and State Govenments. The valuation under this
category is done on the basis of prices provided by Financial Benchmarks India Private Limited (FBIL).

Qualitative Disclosure on risk exposure in derivatives

Company has a board approved business policy which acts as an exhaustive document comprising of various
regulatory and risk limits. Derivatives’ trading is guided by this document and is conducted under the ambit of the
policies defined in this document.

The company follows a strict segregation of functional duties across departments. As a consequence, no single
individual shall be in a position to consummate (dealing, settlement, valuation and accounting) a derivatives
transaction alone by himself/herself.

The Company measures and monitors risk of its derivatives portfolio using risk metrics such as Value at Risk (VAR),
PVBP and position limits. Mid-office calculates and monitors risk management parameters on daily basis and ensures
compliance with the policy limits.

Over the counter (OTC) derivative transactions are covered under International Swaps and Derivatives Association
(ISDA) master agreements with the respective counter parties for credit risk mitigation.

Quantitative Disclosures of Interest Rate Futures and Currency Derivatives for Financial Year 2024-25 are
as under:

*There is no asset creation in the books of accounts

^ARs. 111.98 lacs paid to Indian Cancer Society and Rs. 87.00 lacs to The Rotary Club of Bombay Pier Charities Trust
out of unspent amount of FY 23-24 in FY 24-25.

# Rs. 8.80 lacs spent for maintenance cost for FY 24-25 for I am Gurgaon out of unspent amount of FY 22-23.

$ Surplus income of Rs. 1.12 lacs arising from this project is also utilized in the same project.

c) Shortfall at the year-end: NA

d) Total of Previous Year shortfall: Rs. 198.98 lacs

e) Reason for shortfall: (FY 2024-25: Nil)

FY 2023-24-Rs. 111.98 lacs remained unspent by Indian Cancer Society due to unforeseen complications
arisen with unavailability of women in strength in screening camps and delayed start of the project.

For project of Rotary Foundation, Rs. 87 lacs lacs remained unspent due to operational changes in implementing
partner from Rotary Foundation (India) to the Rotary Club of Bombay Pier Charities Trust as on 31.03.2024

f) Nature of CSR activities: Promotion of healthcare including preventive healthcare and sanitation and environment
sustainability and contribution to PM National Relief Funds

g) Details of related party transactions, e.g., contribution to a trust controlled by the company in relation to CSR
expenditure as per relevant Accounting Standard: Not Applicable

Where a provision is made with respect to a liability incurred by entering into a contractual obligation, the
movements in the provision during the year should be shown separately: Not Applicable

NOTE 66: Subsequent Events

There is no subsequent event after the reporting date till the date of approval of the financial statements, which may
impact the financial statements of the company except an amount of Rs. 9.09 lacs was received on 17^th April 2025
from SREI Equipments Finance Limited written off in FY 2021-22.

Figures of the previous period have been regrouped, wherever considered necessary in order to make them
comparable with those of the current period.

For and on behalf of the Board

r _ I

(Kalyan Kumar) (Gopal Singh Gusain)

Director Director

DIN: 09631251 DIN: 03522170

(C.A. Chandra Prakash) (Monika Kochar)

CFO Company Secretary

Membership No. 415359 Membership No. F6514

In terms of our report of even date
For Batra Deepak & Associates

Chartered Accountants
(FRN: 005408C)

y'

Date: May 02, 2025 (CA. Ashish Mittal)

Place : New Delhi Partner

Regd off : 5, Sansad Marg, Membership No. 511442

New Delhi - 110001