2.9 Provisions, contingent liabilities and contingent assets

Provisions are recognized only when:

• an entity has a present obligation (legal or
constructive) as a result of a past event; and

• it is probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation; and

• a reliable estimate can be made of the amount of the
obligation

These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.

Further, long term provisions are determined by
discounting the expected future cash flows specific to the
liability. The unwinding of the discount is recognized as
finance cost. A provision for onerous contracts is measured

at the present value of the lower of the expected cost
of terminating the contract and the expected net cost
of continuing with the contract. Before a provision is
established, the Company recognizes any impairment loss
on the assets associated with that contract.

Contingent liability is disclosed in case of:

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

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

Contingent Assets:

Contingent assets are not recognized in the financial
statements

2.10 Commitments

Commitments are future liabilities for contractual
expenditure, classified and disclosed as follows:

• estimated amount of contracts remaining to be
executed on capital account and not provided for;

• uncalled liability on loan sanctioned and on
investments partly paid; and

• other non-cancellable commitments, if any, to the
extent they are considered material and relevant in
the opinion of management.

2.11 Foreign exchange transactions and translations
Initial recognition: Transactions in foreign currencies
are recognized at the prevailing exchange rates between
the reporting currency and a foreign currency on the
transaction date. On initial recognition, transactions
in foreign currencies entered into by the Company are
recorded in the functional currency (i.e., Indian Rupees), by
applying to the foreign currency amount, the spot exchange
rate between the functional currency and foreign currency
at the date of the transaction. Exchange differences arising
on foreign exchange transactions settled during the year
are recognized in the Statement of Profit and Loss.

Measurement of foreign currency items at reporting
date:

Foreign currency monetary items of the Company
are translated at the closing exchange rates.
Non-monetary items that are measured at historical cost in
a foreign currency, are translated using the exchange rate
at the date of the transaction. Non-monetary items that are
measured at fair value in a foreign currency, are translated

using the exchange rates at the date when the fair value
is measured. When any non-monetary foreign currency
item is recognised in Other Comprehensive Income, gain
or loss on exchange fluctuation is also recorded in Other
Comprehensive Income.

Exchange differences arising out of these translations are
recognized in the Statement of Profit and Loss.

2.12 Revenue recognition

Revenue (other than those items to which Ind AS 109
Financial Instruments is applicable) is measured based
on the consideration specified in the contracts with the
customers. Amounts disclosed as revenue are net of
goods and services tax ('GST') and amounts collected on
behalf of third parties. Ind AS 115 Revenue from Contracts
with Customers outlines a single comprehensive model
of accounting for revenue arising from contracts with
customers.

The Company recognizes revenue from contracts with
customers based on a five-step model as set out in
Ind AS 115:

Step 1: Identify contract(s) with a customer: A contract is
defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the
criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract:
A performance obligation is a promise in a contract with
a customer to transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction
price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring
promised goods or services to a customer, excluding
amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that has more
than one performance obligation, the Company allocates
the transaction price to each performance obligation in
an amount that depicts the amount of consideration to
which the Company expects to be entitled in exchange
for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company
satisfies a performance obligation.

Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the Company and
the revenue can be reliably measured and there exists
reasonable certainty of its recovery. Revenue is measured

at the fair value of the consideration received or receivable
as reduced for estimated customer credits and other
similar allowances.

a) Recognition of Interest income

Interest income on financial asset at amortized cost
is recognized on a time proportion basis taking into
account the amount outstanding and the effective
interest rate ('EIR'). Interest Income is recognized
in the statement of Profit and Loss using effective
interest rate (EIR) on all financial assets subsequently
measured under amortized cost or fair value through
other comprehensive income (FVTOCI) except for
those classified as held for trading.

The calculation of EIR includes all fees paid or
received between parties to the contract that are
incremental and directly attributable to the specific
lending arrangement, transaction costs, and all other
premiums or discounts. For financial assets at FVTPL
transaction costs are recognized in profit or loss at
initial recognition.

The interest income is calculated by applying the EIR
to the gross carrying amount of non-credit impaired
financial assets (i.e., at the amortized cost of the
financial asset before adjusting for any expected
credit loss allowance). For credit- impaired financial
assets the interest income is calculated by applying
the EIR to the amortized cost of the credit-impaired
financial assets. For financial assets originated or
purchased credit-impaired (POCI) the EIR reflects
ECLs in determining the future cash flows expected
to be received from the financial asset.

Interest income on penal interest and tax refunds is
recognized on receipt basis.

Interest income on fixed deposit is recognized on
time proportionate basis.

b) Fee and Commission income

Fee and commission income include fees other than
those that are an integral part of EIR. Income from
consultancy and commission is recognized on
completion of relevant activity based on agreed
terms of the contract.

c) Other financial charges

Cheque bouncing charges, late payment charges and
foreclosure charges are recognized on a point-in¬
time basis, and are recorded when realized since the

M3 Employee benefits

Short term employee benefits

Employee benefits falling due wholly within twelve
months of rendering the service are classified as
short-term employee benefits and are expensed in the
period in which the employee renders the related service.
Liabilities recognized in respect of short-term employee
benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the
related service.

Long Term employee benefits

Company's net obligation in respect of long-term
employee benefits is the amount of future benefit that
employees have earned in return for their service in
the current and prior periods. Long-term employee
benefit primarily consists of Leave encashment benefits
wherein employees are entitled to accumulate leave
subject to certain limits for future encashment/availment.
Long-term compensated absences are provided for on
the basis of an actuarial valuation at the end of each
financial year using Projected Unit Credit (PUC) Method.
Actuarial gains/losses, if any, are recognized immediately
in the Statement of Profit and Loss

Post-employment benefits

a) Defined contribution Plans

Provident fund: Contributions as required under
the statute, made to the Provident Fund (Defined
Contribution Plan) are recognized immediately in the
Statement of Profit and Loss. There is no obligation
other than the monthly contribution payable to the
Regional Provident Fund Commissioner.

ESIC and Labour welfare fund: The Company's
contribution paid/payable during the year to
Employee state insurance scheme and Labour
welfare fund are recognized in the Statement of
Profit and Loss.

b) Defined benefit Plans

Gratuity liability is defined benefit obligation and
is provided on the basis of an actuarial valuation
performed by an independent actuary based on
projected unit credit method, at the end of each
financial year.

Defined benefit costs are categorized as follows:

i) Service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements)

ii) Net interest expense or income

iii) Re-measurement

Re-measurements of the net defined benefit liability,
which comprise actuarial gains and losses, the return on
plan assets (excluding interest) and the effect of the asset
ceiling (if any, excluding interest), are recognized in OCI,
net of taxes. The Company determines the net interest
expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate used to
measure the defined benefit obligation at the beginning
of the annual period to the net defined benefit liability
(asset), taking into account any changes in the net defined
benefit liability (asset) during the period as a result of
contributions and benefit payments. Net interest expense
and other expenses related to defined benefit plans are
recognized in Statement of Profit and Loss.

The Company's net obligation in respect of gratuity
(defined benefit plan), is calculated by estimating the
amount of future benefit that the employees have
earned in the current and prior periods, discounting that
amount and deducting the fair value of any plan assets.
The retirement benefit obligation recognized in the
Balance Sheet represents the actual deficit or surplus in
the company's defined benefit plans. Any surplus resulting
from this calculation is recognized as an asset to the extent
of present value of any economic benefits available in the
form of refunds from the plans or reductions in the future
contribution to the plans.

Share based Payments

Equity-settled share-based payments to employees are
recognized as an expense at the fair value of equity stock
options at the grant date. The fair value of the options has
been determined under the Black-Scholes model. The fair
value of the options is treated as discount and accounted
as employee compensation cost over the vesting period
on a straight-line basis. The amount recognized as expense
in each year is arrived at based on the number of grants
expected to vest.

2.14 Finance cost

Finance costs include interest expense computed
by applying the effective interest rate on respective
financial instruments measured at amortized cost.
Financial instruments include bank term loans, Vehicle

loans and non-convertible debentures. Finance costs are
charged to the Statement of Profit and Loss. Ancillary and
other borrowing costs are amortized on straight line basis
over the tenure of the underlying loan.

2.15 Leases

The company's lease asset classes primarily consist of
leases for Premises. The Company at the inception of a
contract, assesses whether the contract is a lease or not
lease. A contract is, or contains, a lease if the contract
conveys the right to control use of an identified asset for a
time in exchange for a consideration.

The Company evaluates each contract or arrangement,
whether it qualifies as lease as defined under Ind AS 116.

The Company as a lessee

The Company assesses, whether the contract is, or
contains, a lease. A contract is, or contains, a lease if the
contract involves-

a) the use of an identified asset,

b) the right to obtain substantially all the economic
benefits from use of the identified asset, and

c) the right to direct the use of the identified asset.

The Company at the inception of the lease contract
recognizes a Right-of-Use (RoU) asset at cost and a
corresponding lease liability, for all lease arrangements in
which it is a lessee, except for leases with term of less than
twelve months (short term) and low-value assets.

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 cost of the ROU assets comprises the amount of
the initial measurement of the lease liability, any lease
payments made at or before the inception date of the
lease plus any initial direct costs, less any lease incentives
received. Subsequently, the right-of-use assets is
measured at cost less any accumulated depreciation and
accumulated impairment losses, if any. The ROU assets
are depreciated using the straight-line method from the
commencement date over the shorter of lease term or
useful life of ROU assets.

ROU 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.

For lease liabilities at inception, the Company measures the
lease liability at the present value of the lease payments
that are not paid at that date. The lease payments are
discounted using the interest rate implicit in the lease, if
that rate is readily determined, if that rate is not readily
determined, the lease payments are discounted using the
incremental borrowing rate.

The Company recognizes the amount of the
re-measurement of lease liability as an adjustment to
the ROU assets. Where the carrying amount of the ROU
assets is reduced to zero and there is a further reduction
in the measurement of the lease liability, the Company
recognizes any remaining amount of the re-measurement
in the Statement of Profit and Loss.

For short-term and low value leases, the Company
recognizes the lease payments as an operating expense
on a straight-line basis over the lease term.

2.16 Collateral

To mitigate its credit risks on financial assets, the Company
seeks to use collateral, where possible. The collateral
comes in various forms, such as securities, letter of credit/
guarantees, receivables, inventories, other non-financial
assets and credit enhancements such as netting
arrangements.

The Company provides fully secured, partially secured and
unsecured loans to Corporates and individuals.

2.17 Income Tax

Income tax expense represents the sum of the tax currently
payable and deferred tax. Current and deferred tax are
recognized in the Statement of Profit and Loss, except
when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognized in other
comprehensive income or directly in equity respectively.

Current Tax

The Current tax is based on the taxable profit for the year of
the Company. Taxable profit differs from 'profit before tax'
as reported in the Statement of Profit and Loss because of
items of income or expense that are taxable or deductible

in other years and items that are never taxable or
deductible. The current tax is calculated using applicable
tax rates that have been enacted or substantively enacted
by the end of the reporting period.

Deferred tax

Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in
the Company's financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for
all taxable temporary differences. Deferred tax assets
are generally recognized for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilized. Such deferred tax
assets and liabilities are not recognized if the temporary
difference arises from the initial recognition of assets and
liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary
differences associated with investments in subsidiaries,
except where the Company is able to control the reversal of
temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary
differences associated with such investments and interests
are only recognized to the extent that it is probable that
there will be sufficient taxable profits against which to
utilize the benefits of the temporary differences and they
are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the assets to
be recovered.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset is realized, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

Tax assets and tax liabilities are offset when there is a legally
enforceable right to set off the recognized amounts and
there is an intention to settle the asset and the liability on
a net basis. Deferred tax assets and deferred tax liabilities
are offset when there is a legally enforceable right to set
off tax assets against tax liabilities.

2.18 Earnings per share

Basic earnings per share is computed by dividing the
net profit or loss for the year attributable to equity
shareholders (after deducting attributable taxes) by the
weighted average number of equity shares outstanding
during the year.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects
of all dilutive potential equity shares.

2.19 Segment reporting

The Board of Directors of the Company has identified
Chief Operating Decision Maker (CODM) as defined by
Ind AS 108, "Operating Segments". Operating segments
are reported in a manner consistent with the internal
reporting provided to the CODM. The accounting policies
adopted for segment reporting are in conformity with
the accounting policies adopted at company level.
Revenue and expenses have been identified to segments
on the basis of their relationship to the operating activities
of the segment Income / costs which relate to the
company as a whole and are not allocable to segments on
a reasonable basis have been included under Unallocated
Income / Costs.

Operating segments identified by the Company
comprises as under:

- Lending services

- Forex services including MTSS business

2.20 Dividend distribution to equity holders of the Company

The Company recognizes a liability to make distributions
to equity holders of the Company when the distribution
is authorized and the distribution is no longer at the
discretion of the Company. As per the Act, final dividend
is authorized when it is approved by the shareholders and
interim dividend is authorized when it is approved by the
Board of Directors of the Company.

2.21 Goods and Services Input Tax Credit

Goods and Services tax input credit is accounted for in the
books in the period in which the supply of goods or service
received and when there is no uncertainty in availing/
utilizing the credits.

2.22 Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time. For the year ended March 31,2025, MCA
has not notified any new standards or amendments to the
existing standards applicable to the Company.

Note:

i) Statutory Reserve under Section 45-IC of the RBI Act, 1934:

The Company created a reserve pursuant to section 45 IC the Reserve Bank of India Act, 1934 by transferring amount
not less than twenty per cent of its net profit every year as disclosed in the Statement of Profit and Loss and before any
dividend is declared.

ii) Securities premium:

The amount received in excess of face value of the equity shares is recognised in Securities Premium Account. In case
of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value
of share is accounted as securities premium account. The account is utilised in accordance with the provisions of the
Companies Act 2013.

iii) Employee stock option outstanding account:

The reserve is used to recognise the fair value of the options issued to employees of the Company and subsidiary
companies under Company's employee stock option scheme.

iv) 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. Consequent to introduction of Companies
Act 2013, the requirements is not mandatory to transfer a specified percentage of the net profit to general reserve.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

v) Retained earnings:

Retained earnings represents surplus/accumulated earnings of the Company and are available for distribution to
shareholders.

vi) Other Comprehensive Income - Remeasurement of Post Employment Benefit Obligations:

The Company Recognises change on account of remeasurement of the net defined benefit liability (asset) as part of
other comprehensive income.

a) Chief Operating Decision Maker

Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision Maker
(CODM). The Board of Directors ('BOD') of the Company has identified CODM as defined by Ind-AS 108 Operating Segments,
who assesses the financial performance and position of the Company and makes strategic decisions.

b) Operating Segment

Primary Segment (Business Segment)

The Company is primarily engaged in the Lending business. It also has a Forex Remittance business. Under the Lending business
the Company gives loans to Micro, Small and Medium enterprises and other customers across various industries. Revenue from
lending business includes (i) interest income and (ii) fees income. Forex services comprises of overseas remittances, foreign
currency prepaid travel card, Money Transfer Service Scheme ("MTSS"), import and export foreign currency notes.

Secondary Segment (Geographical Segment)

Since the business operations of the Company are primarily concentrated in India, the Company is considered to operate only
in the domestic segment and therefore there is no reportable geographic segment.

c) Segment Revenue and Expense

Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment.
Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have
been disclosed as 'Unallocated'.

d) Segment Assets and Liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments.

Tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been
disclosed as 'Unallocated'.

e) Accounting Policies

The accounting policies consistently used in the preparation of the financial statements are also applied to items of revenue
and expenditure in individual segments.

f) Disclosure for other material non cash item

There are no other material non cash items which have not been disclosed in the above disclosure.

Note:

i) Includes allocated shared expenses.

ii) Investments in equity shares of subsidiaries have been disclosed under - Investments (Refer Note 7).

iii) Remuneration paid excludes amounts pertaining to gratuity and compensated absences, which are actuarially valued
at the Company level.

iv) All related party transactions entered during the year were in the ordinary course of business and on arm's length basis.
36 Employee benefits

(A) Defined Contribution Plan - Provident Fund (PF) Contribution, Employee State Insurance (ESI) Contribution and Labour
Welfare Fund (LWF)

The Company makes contributions towards PF, ESI and LWF in respect of qualifying employees. The amount recognised as
an expense and included in Note 25 "Employee benefits expense " as under.

The employees of the Company are members of a retirement contribution plan operated by the government. The Company
is required to contribute a specified percentage of payroll cost to the retirement contribution scheme to fund the benefits.
The only obligation of the Company with respect to the plan is to make the specified contributions.

(B) Defined Benefit Plan - Gratuity

The Company has a defined benefit gratuity plan, under which every employee who has completed atleast five years of service
gets a gratuity on departure @15 days of last drawn basic salary for each completed year of service.

The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks
pertaining to the plan. The actuarial risks associated are:

Interest Rate Risk:

The risk of government security yields falling due to which the corresponding discount rate used for valuing liabilities falls.
Such a fall in discount rate will result in a larger value placed on the future benefit cash flows while computing the liability
and thereby requiring higher accounting provisioning.

Longevity Risks:

Longevity risks arises when the quantum of benefits payable under the plan is based on how long the employee lives post
cessation of service with the Company. The gratuity plan provides the benefit in a lump sum form and since the benefit is not
payable as an annuity for the rest of the lives of the employees, there is no longevity risks.

Mortality & disability :

Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

Salary Risks:

The gratuity benefits under the plan are related to the employee's last drawn salary. Consequently, any unusual rise in future
salary of the employee raises the quantum of benefit payable by the company, which results in a higher liability for the
company and is therefore a plan risk for the Company.

The estimates of the future salary increases, considered in actuarial valuation, include inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market. The discount rate is based on the prevailing market
yield on government securities as at the balance sheet date for the estimated average remaining service.

Withdrawals :

Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent
valuations can impact plan's liability.

37 Employee Stock Option Plan

A. The shareholders of the Company passed a resolution through postal ballot/ e-voting on 23^rd September 2018 for approval of
the issue of 1,75,00,000 after split of shares in the ratio* of 1:5 (35,00,000 options before split ) under the Scheme titled "CIFL
EMPLOYEE STOCK OPTION PLAN 2018” (ESOP 2018).

The ESOP Scheme allows the issue of options to employees of the Company and its subsidiaries (whether in India or abroad).
Each option comprises one underlying equity share.

As per the ESOP Scheme "CIFL EMPLOYEE STOCK OPTION PLAN 2018", the Nomination and Remuneration Committee (NRC)
of the Board of Directors grants the options to the employees deemed eligible. The Exercise Price for the Options shall be
determined by the Committee which shall not be less than the face value of the Shares of the Company as on date of Grant.
The options granted vest not earlier than minimum period of 1 (One) year and not later than maximum period of 5 (Five)
years from the date of Grant. The Exercise Period in respect of Vested Options shall not be more than 5 (Five) years from the
date of Vesting of Options.

B. The shareholders of the Company passed a resolution through postal ballot/ e-voting on 09^th December 2023 for approval of
the issue of 2,00,00,000 after split of shares in the ratio* of 1:5 (40,00,000 options before split ) under the Scheme titled "CIFL
EMPLOYEE STOCK OPTION PLAN 2023" (ESOP 2023).

The ESOP Scheme allows the issue of options to employees of the Company/ Holding/ Subsidiary/ Group/ Associate and its
subsidiaries (whether in India or abroad). Each option comprises one underlying equity share.

As per the ESOP Scheme "CIFL EMPLOYEE STOCK OPTION PLAN 2023", the Nomination and Remuneration Committee of the
Board of Directors grants the options to the employees deemed eligible. The Exercise Price for the Options shall be determined
by the Committee which shall not be less than the face value of the Shares of the Company as on date of Grant. The options
granted vest not earlier than minimum period of 1 (One) year and not later than maximum period of 4 (Four) years from the
date of Grant. The Exercise Period in respect of Vested Options shall not be more than 5 (Five) years from the date of Vesting
of Options.

As per RBI Prudential norms, the minimum CRAR requirement for NBFCs is 15% and the Company has maintained CRAR well
above the regulatory norms throughout the year.

Regulatory capital-related information is presented as a part of the RBI mandated disclosures. The RBI norms require capital
to be maintained at prescribed levels. In accordance with such norms, Tier I capital of the company comprises of share capital,
share premium, reserves and Tier II capital comprises of provision on loans that are not credit-impaired. There were no changes
in the capital management process during the years presented.

42 Financial Risk Management

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk
management framework. The Board of directors has constituted the risk management committee, which is responsible for
developing and monitoring the Company's risk management policies. The Company's risk management committee oversees
how management monitors compliance with the Company's risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by the Company.

The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions.

The Company has exposure to the following risks arising from its business operations:

i) Credit risk

Credit risk is the risk of financial loss if a customer or counterparty fails to meet an obligation under a contract. Lending activities
account for most of the Company's credit risk. Other sources of credit risk also exist in loans and transaction settlements.
Credit risk is measured as the amount that could be lost if a customer or counterparty fails to make repayments.
The maximum exposure to credit risk in case of all the financial instruments is restricted to their respective carrying amount.
Credit risk is monitored through stringent credit appraisal, counter party limits and internal risk ranges of the
borrowers. Exposure to credit risk is managed through regular analysis of the ability of all the customers and
counterparties to meet interest and capital repayment obligations and by changing lending limits where appropriate.
Company primarily offers loans secured by immovable property. In order to mitigate credit risk, company also seeks collateral
appropriate to the product segment. Other means of mitigating credit risk that the company uses are guarantees. The most
common types of collateral the company receives, measured by collateral value, are mortgages on financial assets in the form
of Residential/Commercial property.

b) Credit quality analysis

An impairment analysis is performed at each reporting date based on the facts and circumstances existing on that date
to identify expected losses on account of time value of money and credit risk. The credit quality of Loans and advances
measured at amortised cost is primarily assessed by the Days Past Due (DPD) status.

Inputs, assumptions and techniques used for estimating impairment

In assessing the impairment of financial assets under the expected credit loss model, the Company defines default when
a loan obligation is overdue for more than 90 days.

Assessment of significant increase in credit risk

When determining whether the risk of default has increased significantly since initial recognition, the Company considers
the DPD status of the loans. Credit risk is deemed to have increased significantly when an asset is more than 30 days
past due (DPD)

Calculation of expected credit losses

The key elements in calculation of ECL are as follows:

PD - The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only
happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the
portfolio.

EAD - The Exposure at Default is an estimate of the exposure at a future default date, taking into account expected
changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by
contract or otherwise, expected drawdowns on committed facilities, accrued interest from missed payments and loan
commitments.

LGD - The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based
on the difference between the contractual cash flows due and those that the lender would expect to receive, including
from the realisation of any collateral. It is usually expressed as a percentage of the EAD. The LGD is determined based on
valuation of collaterals and other relevant factors.

For PD the Company has relied upon the PD data from industry benchmarks and external rating agencies. For Loss Given
Default (LGD) the Company has relied on internal and external information.

Policy for Write off

The gross carrying amount of a financial asset is written-off (either partially or in full) to the extent that there is no
reasonable expectation of recovering the asset in its entirety or a portion thereof. This is generally the case when the
Company determines that the borrower does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off and when there is no reasonable expectation of recovery from the
collaterals held. However, financial assets that are written-off could still be subject to enforcement activities in order to
comply with the Company's procedures for recovery of amounts due.

c) Movement in gross exposures and credit impairment for loans and advances

The Company uses 'Expected Credit Loss' (ECL) model, for evaluating impairment of Financial Assets measured at amortised
cost. Company follows a 'three-stage' model for impairment based on changes in credit quality since initial recognition.
Refer to the accounting policy for details.

d) Collateral and other credit enhancements

The Company would generally have its credit exposures backed by securities, either primary or collateral. Lending Policy
of the Company prescribes Asset cover norms and collateral guidelines for its various product offering. The amount
and type of collateral required depends on an assessment of the credit risk of the counterparty and product offered.
The Company grants loans against collateral of immovable property (Land, Under construction projects, Ready property)
including commercial and residential properties.

As collateral is a source of mitigating credit risk, assessment of the condition of the securities and their value is undertaken
on regular basis. There were no significant changes in the collateral policy of the company during the Financial Year
2024-2025.

ii) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting the obligations associated with its financial
liabilities that are selected by delivering cash or other financial assets. The Company's approach to managing liquidity
is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The Company has in place an Asset-Liability Management Committee (ALCO) which functions as the operational unit for
managing the Balance Sheet within the performance and risk parameters laid down by the Board and Risk Committee of
the Board. ALCO reviews Asset Liability strategy and Balance Sheet management in relation to asset and liability profile.
ALCO ensures that the objectives of liquidity management are met by monitoring the gaps in the various time buckets,
deciding on the source and mix of liabilities, setting the maturity profile of the incremental assets and liabilities etc.
Key principles adopted in the Company's approach to managing liquidity risk include:

a) Monitoring the Company's liquidity position on a regular basis, using a combination of contractual and behavioral
modelling of balance sheet and cash flow information

b) Maintaining a high quality liquid asset portfolio or maintaining undrawn bank lines

c) Operating a prudent funding strategy which ensures appropriate diversification and limits maturity concentrations

The Company's principal sources of liquidity are cash and cash equivalents, undrawn cash credit & overdraft facilities from
Banks, liquid asset portfolio like Mutual funds and the cash flow that is generated from operation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and include interest accrued till the reporting date.

iii) Market Risk :

Market risk is the risk that the fair value of the future cash flows of financial instruments will fluctuate due to changes in market
variables such as interest rates risk and foreign currency risk.

The Company primarily deploys funds in bank deposits and liquid debt securities as a part of its liquidity management
approach. The Company regularly reviews its average borrowing / lending cost including proportion of fixed and floating
rate borrowings / loans so as to manage the impact of changes in interest rates.

vi) Operational Risk:

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

Ind AS 107, 'Financial Instruments - Disclosure' requires classification of the valuation method of financial instruments measured
at fair value in the Balance Sheet using a three-level fair value-hierarchy (which reflects the significance of inputs used in the
measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the
fair value- hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and place limited reliance on the entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

c. Derivatives

The Company has no transactions / exposure in derivatives as on 31^st March, 2025 and 31^st March, 2024.

d. Disclosures relating to Securitisation

The Company has not entered in securitisation transaction during the year and had no outstanding securitisation transactions
for earlier years.

e. Details of Financial Assets sold to Securitisation / Reconstruction Company for Asset Reconstruction

The Company has not sold any financial asset to securitisation / reconstruction company for asset reconstruction in the current
year and previous year.

f. Details of Loans transferred through Assignment

The Company has sold some loan and advances (measured at amortised cost) by way of direct assignment.

Risk and rewards related to these assets were transferred to the respective assignees, the assets have been de-recognised
from the Company's balance sheet.

q. Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)

The Company has not invested in overseas assets in the current and previous year. There are no outstanding investments
from earlier years.

r. Off-balance Sheet SPVs sponsored by the Company

The Company has no off-balance sheet SPV in the current year.

s. Disclosure of Scheme for Sustainable Structuring of Stressed Assets (S4A)

The Company has not done any Sustainable Structuring of Stressed Assets

The Company has not restructured any non-performing financial assets during the financial year ended 31^st March, 2025 and
31^st March, 2024.

t. Fraud Reporting

As required by the Chapter II paragraph 5 for Monitoring of frauds in NBFCs (RBI guidelines), there are no frauds reported for
the year ended 31^st March, 2025 and 31^st March, 2024.

u. Remuneration of Directors

Details of all transactions with directors has been given in Note 35 of Financials Statements (Related Party Transactions).

v. Revenue Recognization

There have been no instances in which revenue recognization has been postponed pending the resolution of significant
uncertainities.

w. Consolidated Financial Statement (CFS)

The Company has prepared consolidated financial statement of all its underlying subsidiaries.

x. Net Profit or Loss for the period, prior period items and changes in accounting policies

No prior period items and changes in accounting policies.

y. The disclosure of the Concentration of Deposits taken is not applicable since the Company is not in the business of accepting
deposits being a Systemically Important Non Deposit Accepting NBFC.

The Company has not provided any loans to directors, senior officers and relatives of directors, KMP and SMP, during the year
ended 31^st March, 2025 and 31^st March, 2024.

ah. Income and expenditure of exceptional nature

The Compnay has not booked any income or expenditure of exceptional nature during the year ended 31^st March,
2025 and 31^st March, 2024.

ai. Disclosure on modified opinion

The auditor have expressed an unmodified opinion for the year ended 31^st March, 2025 and 31^st March, 2024.

aj. Breach of covenant

The Company has no instances of breach of covenant in respect of loans availed and debt securities issued as at March 31,
2025 and March 31,2024.

ak. Gold Loans

The Company does not provide any loans on collateral of gold and gold jewellery.

al. The Company has neither purchased any credit impaired financial assets nor has the company transferred any credit impaired
assets to the Asset Reconstruction Company during the financial year 2024-2025 and 2023-2024 interms of guidelines issued
by RBI circular number RBI/DOR/2021-22/86 DOR.STR.REC.51/21.04.048/2021-22 dated 24 September, 2021 as updated from
time to time. Further, the Company has also not sold any credit impaired financial assets.

am. Corporate Governance (refer Corporate Governance section in the annual report)

an. Divergence in asset classification and provisioning

During the year ended 31 March, 2025 and 31 March, 2024 no divergence in asset classification and provisioning has
been reported.

ao. Unhedged Foreign Currency Exposure

Refer Note 29 of Unhedge Foreign Currency Exposure (UFCE).

46 Public disclosure on liquidity risk of Capital India Finance Limited ('CIFL') as on 31^st March, 2025 in accordance with RBI circular
No. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 dated 4^th November, 2019 and as per Scale Based Regulation
prescribed by the RBI on Liquidity Risk Management Framework for Non-Banking Financial Companies (NBFCs) including Core
Investment Companies.

1 Other Short Term Liabilities represents all liabilities original Maturities within a year excluding total equity,
Debt Securities, Borrowings.

2 Public funds Include Debt Securities, Borrowings

3 Total Liability Includes Total Liability and Equity as per Balance Sheet less equity
vi. Institutional set-up for liquidity risk management

The Board of Directors of the Company has instituted the Asset Liability Management Committee to monitor and manage
liquidity risk inter-alia by way of monitoring the asset liability composition, reviewing the liquidity and borrowing program
of the Company, setting-up and monitoring prudential limits on negative mismatches w.r.t. liquidity and interest rate.

The Company's liquidity and funding approach documented through its various plans and policies including the Asset
Liability Management Policy, Resources Planning Policy, Investment and Deployment Policy, is to ensure that funding is
available to meet all market related stress situations. The Company endeavour to maintain a conservative Asset Liability
Management approach which is focused on maintaining long term funding stability.

The Company also has a Risk Management Committee which reports to the Board and is responsible for evaluating the
overall risks faced by the Company including liquidity risks.

The Company's liquidity management set-up is assessed periodically to align the same with any regulatory changes in
the economic landscape or business needs. The ALCO meetings are held once in a quarter and committee submit its
report to board on quarterly basis.

50 Additional disclosures

a. 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 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.

b. 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.

c. The Company has no transaction which is not recorded in the books of accounts that has 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 relevant
provisions of the Income Tax Act, 1961), unless there is immunity for disclosure under any scheme and also shall state whether
the previously unrecorded income and related assets have been properly recorded in the books of account during the year
ended 31^st March 2025 and 31^st March 2024.

d. Crypto or virtual currency

The Company has not invested in crypto currency or virtual currency during the year ended 31^st March 2025 and
31^st March 2024.

e. Wilful defaulter

The Company has not been declared as wilful defaulter by the bank & financial institution or any other lender. In accordance
with the guidelines on wilful defaulters issued by the Reserve Bank of India, during the year ended 31^st March 2025 and
31^st March 2024.

f. No Scheme of arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies
Act, 2013 during the year ended 31^st March 2025 and 31^st March 2024.

g. The Company, being a Non-Banking Financial Company ("NBFC") registered with the Reserve Bank of India as a systematically
important NBFC, the provisions of section 2(87) read with Companies (restriction on number of layers) Rules 2017 are not
applicable.

h. The company has not purchased any credit impaired financial assets during the year ended 31^st March, 2025 and 31^st March 2024.

i. There have been no events after the reporting date that require disclosure in the financial statement.

j. The Company has no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560
of Companies Act, 1956 during the year ended 31^st March 2025 and 31^st March 2024.

l. The Company has used accounting software for maintaining books of accounts which has the feature of recording audit trail.
Further, there is no instance of audit trail feature being tampered with in respect of any accounting software and the audit
trail has been preserved by the company as per the Statutory requirements for record retention.

51 The Financial Statements have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting
held on 14^th May, 2025.

52 Previous year's figures

To provide more reliable and relevant information about the effect of certain items in the Balance Sheet and Statement of
Profit and Loss, the Company has changed the classification of certain items. Previous year figures have been re-grouped or
reclassified, to confirm to such current year's grouping / classifications. There is no impact on Equity or Net Profit due to these
regrouping / reclassifications.

For V. SANKAR AIYAR & Co. For and on behalf of the board

Chartered Accountants Capital India Finance Limited

Firm Registration No. : 109208W

S. Nagabushanam Vinod Somani Keshav Porwal Pinank Jayant Shah

Partner Non-Executive Chairman (Independent) Managing Director Chief Executive Officer

Membership No. : 107022 DIN : 00327231 DIN : 06706341

Place: Mumbai Place: Delhi Place: Mumbai Place: Mumbai

Vikas Srivastava Sulabh Kaushal

Chief Financial Officer Chief Compliance Officer & Company Secretary

Place: Mumbai Place: Delhi

Date: 14^th May, 2025 Date: 14^,h May, 2025