1.25. Provisions, contingent liabilities and contingent assets:

Provisions are recognised only when:

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

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

(iii) a reliable estimate can be made of the amount of the obligation

Provision is measured using the cash flows estimated to settle the present obligation and when the effect of
time value of money is material, the carrying amount of the provision is the present value of those cash flows.
Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it
is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of:

a. 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

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

Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent
liabilities and contingent assets are reviewed at each Balance Sheet date.

Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits
expected to be received under such contract, the present obligation under the contract is recognised and
measured as a provision.

1.26.Commitment:

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

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

(b) uncalled liability on shares and other investments partly paid;

(c) funding related commitment to associate companies; and

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

Other commitments related to sales/procurements made in the normal course of business are not disclosed
to avoid excessive details.

1.27.Statement of cash flows:

Statement of cash flows is prepared segregating the cash flows into operating, investing and financing
activities. Cash flow from operating activities is reported using indirect method adjusting the profit before
tax for the effects of:

(i) changes during the period in operating receivables and payables transactions of a non-cash nature;

(ii) non-cash items such as depreciation, provisions, deferred taxes, unrealised gains and losses; and

(iii) all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items
which are not available for general use as on the date of Balance Sheet.

1.28. Earnings per share:

The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per
share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential
ordinary shares.

1.29. Key source of estimation:

The preparation of financial statements in conformity with Ind AS requires that the management of the
Company makes estimates and assumptions that affect the reported amounts of income and expenses of the
period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of
the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible
assets, expected credit loss on loan books, future obligations in respect of retirement benefit plans, fair value
measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in
which the results are known.

1.30. Recent Pronouncements:

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendment 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 notified Ind AS - 117 Insurance contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The Company
has reviewed the new pronouncements based on its evaluation has determined that it does not have any
significant impact in its financial statements.

(h) Capital Management

- The objective of the Company's Capital Management is to maximise shareholder value, safeguard
business continuity and support the growth of its Group. The Group determines the capital requirement
based on annual operating plans and long-term and other strategic investment plans. The funding
requirements are met through loans and operating cash flows generated. The debt equity ratio is
3.65 as at March 31,2025 (as at March 31, 2024 was 3.30).

- During the year ended March 31,2025, the Company has paid the final dividend of ? 2.50 per equity
share for the year ended March 31,2024 amounting to ? 622.46 crore. (PY 2023-24 ? 496.61 crore).

The Company has proposed a final dividend of ? 2.75 per share in the Board meeting subject to approval

from shareholders.

(I) Employee Stock Option Scheme

- The Company has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010) and 2013
(ESOP Scheme 2013). The grant of options to the employees under the stock option schemes is on
the basis of their performance and other eligibility criteria. The options allotted under the scheme
2010 are vested over a period of four years in the ratio of 15%, 20%, 30% and 35% respectively
from the end of 12 months from the date of grant, subject to the discretion of the management and
fulfillment of certain conditions. The options granted under the scheme 2013 are vested in a graded
manner over a period of four years with 0%, 33%, 33% and 34% of grants vesting each year,
commencing from the end of 24 months from the date of grant or w.e.f. July 10, 2019 vested in a
graded manner over a period of four years with 25%, 25%, 25% and 25% of grants vesting each
year, commencing from the end of 12 months from the date of grant.

- Options allotted under scheme 2010 can be exercised anytime within a period of 7 years from the
date of grant and would be settled by way of equity. The option granted under scheme 2013 can be
exercised anytime within a period of 8 years from the date of grant. Management has discretion to
modify the exercise period.

- The option granted under scheme 2010 is at exercise price of ? 44.20. The option granted under
scheme 2013 can be exercised either at market price which was the last closing price on National
stock exchange preceding the date of grant or w.e.f. July 10,2019 ? 10 respectively.

- During the year ended March 31, 2025 65,000 and 58,62,791 options were allotted under the
scheme 2010 and 2013 respectively.

2. Securities premium: The amount received in excess of face value of the equity shares is recognised in
Securities Premium. 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.

3. General Reserve: The Companies (Transfer of Profits to Reserves) Rules, 1975 read with Section 205(2A)
of the Companies Act, 1956, prohibited declaration of dividend for any financial year out of profits of
the company for that year except after the transfer of a specified percentage of the profits not exceeding
10%, to its reserves. Amounts were transferred to General Reserve to comply with these provisions. The
Companies Act, 2013, does not mandate such a transfer.General reserve is a free reserve available to the
Company.

4. Reserve u/s 45 IC of Reserve Bank of India 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 percent
of its net profit every year as disclosed in the Statement of Profit and Loss and before any dividend is
declared.

5. Reserve u/s 29C of National Housing Bank, 1987: During the financial year 2020-21, upon
amalgamation of the erstwhile L&T Housing Finance Limited (the "Transferor Companies") with erstwhile
L&T Finance Limited (the "Transferee Company"), the statutory reserves (i.e. Reserve under section 29C of
National Housing Bank, 1987) of the Transferor Companies is also transfer to the Transferee Company.

6. Reserve u/s 36(1)(viii) of Income tax Act, 1961: In respect of any special reserve created and maintained
by a specified entity, an amount not exceeding twenty percent of the profits derived from eligible business
computed under the head "Profits and gains of business or profession" (before making any deduction
under this clause) is carried to such reserve account.

7. Retained earnings: Retained earnings represent the amount of accumulated earnings of the Company.

8. 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.

9. Impairment Reserve: As per the RBI circular RBI/2019-20/170 dated March 13, 2020, where the
guidelines require NBFCs to hold impairment allowances as required by Ind AS. In parallel NBFCs are
required to compute provisions as per extant prudential norms on Income Recognition, Asset Classification
and Provisioning (IRACP). A comparison, as prescribed, between provisions required under IRACP and
impairment allowances made under Ind AS 109 is required to be disclosed by NBFCs in the notes to their
financial statements to provide a benchmark to their Boards, RBI supervisors and other stakeholders, on
the adequacy of provisioning for credit losses. Where impairment allowance under Ind AS 109 is lower
than the provisioning required under IRACP (including standard asset provisioning), NBFCs are required to
appropriate the difference from their net profit or loss after tax to a separate 'Impairment Reserve'. The
balance in the 'Impairment Reserve' shall not be reckoned for regulatory capital. Further, no withdrawals
shall be permitted from this reserve without prior permission from the Department of Supervision, RBI.
The said reserve was created in erstwhile L&T Infra Credit Limited which has been merged with the
Company (refer note 53).

10. Capital Redemption Reserve: Capital redemption reserve (CRR) represents reserve created pursuant to
Section 55 (2) (c) of the Companies Act, 2013 by transfer of an amount equivalent to nominal value of
the Preference shares redeemed. The CRR may be utilised by the Company, in paying up unissued shares
of the Company to be issued to the members of the Company as fully paid bonus shares in accordance
with the provisions of the Companies Act, 2013.

33 Disclosure pursuant to Ind AS 19 “Employee Benefits"

(i) Defined Contribution Plan:

The Company's state governed provident fund scheme are defined contribution plan for its employees and
for a certain categories of employees made to a trust viz. the Larsen & Toubro Officers & Supervisory Staff
Provident Fund constituted by the ultimate parent company, which is permitted under The employee's
Provident Funds and Miscellaneous Provisions Act, 1952. The Contribution by the employer and employee
together with interest accumulated there on are payable to the employee at the time of separation from
company or retirement whichever is earlier. The benefit vets immediately on rendering of services by the
employee. In addition to the above, information relating to the scheme operated by the trust constituted
by the holding company is given in the note (iii) below.

The Company has recognised charges of ? 73.91 crore (previous year: ? 56.67 crore) for provident fund
contribution contribution is included in "Note 29 Employee Benefits Expenses" in the Statement of Profit
and Loss.

(ii) Defined Benefits Gratuity Plan :

The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit
equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on
termination of service or retirement whichever is earlier. The benefit vests after five years of continuous
service. The Company's scheme is more favorable as compared to the obligation under Payment of
Gratuity Act, 1972. These benefit plans expose the Company to actuarial risks, such as longevity risk,
interest rate risk and investment risk.

(A) Discount rate:

The discount rate is based on the prevailing market yields of Indian government securities as at
the valuation date for the estimated term of the obligations.

(B) Average historic yield on the investment portfolio:

The average rate of return earned on the investment portfolio of provident fund in the previous
three years.

(C) Expected investment return:

Expected investment return is determined by adding the yield spread to the discount rate for a
term of the obligation, where yield spread is the difference between the average historic yield on
the investment portfolio & discount rate for the remaining term to maturity of the investment
portfolio.

(D) Guaranteed rate of return:

The Regional Provident Fund Commissioner has not yet declared the interest rate for its own
subscribers for the current financial year 2024-25. However, in view of the fall in equity values as
at March 31, 2025 and fall in the returns on fixed income instruments, we are of the view that
going forward the future guaranteed rate is unlikely to be in excess of 8.25% p.a. (previous year:
8.25% p.a.).

iv) Interest expense on lease liabilities for F.Y. 2024-25 is ? 5.65 crore and for F.Y. 2023-24 is
? 4.43 crore

v) Expense relating to leases for which underlying asset is of low value for F.Y. 2024-25 is
? 1.43 crore and for F.Y. 2023-24 is ? 5.39 crore

vi) Expense related to short-term leases for F.Y. 2024-25 is ? 45.25 crore and for 2023-24 is
? 63.01 crore.

vii) Expense related to variable lease payments for F.Y. 2024-25 is Nil and F.Y. 2023-24 is Nil

viii) Income from sub-leasing of right of use assets for F.Y. 2024-25 is Nil and for F.Y. 2023-24 is
? 0.87 crore

ix) There are no gains or losses arising from sale and leaseback transactions for FY 2024-25 and
FY 2023-24

x) Maturity Analysis - Contractual Undiscounted Cash Flow (Refer note 43)
b) Finance Lease : Not Applicable

II) Company as Lessor

a) Finance Lease

i) The Company has given on finance leases certain items of plant and equipment. The leases
have a primary period that is fixed and noncancellable and a secondary period. There are no
exceptional/restrictive covenants in the lease agreement. There are no significant risks associated
with rights that the Company retains in underlying assets.

(c) Excess during the financial year 2023-24

The Company has spent excess amount towards new project(s) / program(s) and the excess spent amount
shall be set off against the required 2% CSR expenditure in the next three financial years.

(d) Nature of CSR activities during the financial year 2023-24

The payment for the CSR activities are done for Digital Financial Literacy and Entrepreneurship
Development, Tree Plantation, Capacity Building of Water User Groups, creating awareness on Road
Safety and Healthcare.

(e) Excess during the financial year 2024-25

The Company has spent excess amount towards new project(s) / program(s) and the excess spent amount
shall be set off against the required 2% CSR expenditure in the next three financial years.

46 Risk Management
Basis

Robust risk management involves a systematic approach to identification, measurement and control of various
risks. All employees of the Company are responsible for the management of risks, including the Board of
Directors. The Board of Directors and its Risk Management Committee ensure that Management takes into
consideration all the relevant risk factors which could lead to unexpected fluctuations in financials or loss of
capital employed. Risks are evaluated from time to time and control measures as per defined frameworks as
approved by the board are executed. This helps in aligning the risk appetite to the Company's strategy to
deliver sustainable, long-term returns to its investors.

Types of risk

As a lending non-banking financial company, the most important risks faced are as follows:

• Credit risk

• Market risk

• Capital risk

In addition to the above Risks, Enterprise Risks, Operational Risks, Model Risks and Information Security risks
are also identified and monitored.

Credit risk

Credit risk is the risk of suffering financial loss due to customers or counterparties failing to fulfil their
contractual obligations which can result in losses for the company.

Credit risk arises mainly from retail and wholesale loans and advances and loan commitments arising from
such lending activities; but could also arise from credit enhancement provided, such as financial guarantees.
Credit risk arises due to

a) Default Risk - Borrower fails to repay

b) Credit worthiness risk - Borrower's credit profile deteriorates

c) Concentration Risk - over exposure to an industry or borrower or geography

The Company is also exposed to other credit risks arising from investments in debt securities and exposures
arising from its trading activities ("Trading Exposures") as well as settlement balances with market
counterparties.

Credit risk is the one of the largest risk for the Company's business. Management therefore carefully manages
its exposure to credit risk. A centralized risk management function oversees the risk management framework,
and an overview of credit risk of portfolio is periodically presented to the Risk Management Committee.

Credit-worthiness in terms of intention to pay and cashflows assessment is evaluated prior to signing any
contracts, based on underwriting process including employing market information. Management endeavors
to constantly upgrade and improve its underwriting standards to reduce the credit risk and build a risk
calibrated portfolio.

Loans and advances (including loan commitments and guarantees)

The estimation of the risk of credit exposures is complex, as the same varies with changes in market conditions,
expected cash flow and the passage of time. Wholesale and retail portfolios are managed separately to reflect
the differing nature of the business strategy. As the Company is completely existing the wholesale business by
way of sell down, the wholesale portfolio is classified as Fair Value through Profit and Loss Account ("FVTPL")
and valued accordingly as per Ind AS 109. As regards the retail portfolio, the same is classified as amortized
cost as per Ind AS 109 and assessed accordingly. The assessment of credit risk of the retail portfolio entails
estimations as to the likelihood of defaults occurring and of the associated loss ratios. The Company measures
credit risk for each class of loan assets using inputs such as Probability of Default (PD) and Loss Given Default
(LGD). PD and LGD are ascertained as per applicable standards culminating in Expected Credit Loss ("ECL").

Retail Business- (Rural and Urban Finance)

A combination of credit models along with policy rules are deployed as approved by the designated officials
for the respective product. The rules are regularly monitored and updated to ensure that the learnings from
the portfolio performance and changes in the economic environment have been factored into strengthening
measures are implemented.

Trading Exposures

For debt securities in the trading portfolio, external rating agency credit grades are used for evaluating the
credit risk.

Expected Credit Loss ('ECL')

The Company prepares its financial statements in accordance with the IND AS framework. As per the RBI
notification, on acceptance of IND AS for regulatory reporting, the Company computes provision as per IND
AS 109 as well as per extant prudential norms on Income Recognition, Asset Classification and Provisioning
(IRACP). Where impairment allowance in aggregate for the Company under Ind AS 109 is lower than the
provisioning required under IRACP (including standard asset provisioning) for the Company, the difference is
appropriated from net profit or loss after tax, to a separate 'Impairment Reserve'. Any withdrawals from this
reserve shall be made only with prior permission from the RBI.

ECL allowances recognized in the financial statements also reflect the effect of a range of possible economic
outcomes, calculated on a probability weighted basis, based on certain economic scenarios. The recognition
and measurement of ECL involves the use of significant judgment and estimation. Forward looking economic
forecasts are used in developing the ECL estimates. The multi-variable regression framework is used to
establish a linkage between company's default rates and various macroeconomic variables like unemployment
rate, Government total expenditure, Government consumer expense, domestic credit investment, and farm
reservoir levels amongst others on case to case basis. Three scenarios sufficient to calculate unbiased ECL
are used - representing the "most likely outcome" (the "Central" scenario) and two "less likely outcome"
scenarios (the "Upside" and "Downside" scenarios). Probability weights have been assigned to each scenario
based on past patterns observed in the multi variable regression process.

Management oversees the estimation of ECL including:

(i) setting requirements in policy, including key assumptions and the application of key judgements

(ii) the design and execution of models; and

(iii) review of ECL results.

As required by Ind AS 109, a 'three-stage' model for impairment based on changes in credit quality since initial
recognition was built as summarized below:

• A loan asset that is not credit-impaired, on initial recognition, is classified in 'Stage 1' and has its credit
risk continuously monitored by Management. The company categorises loan assets as 'Stage 1' primarily
based on 0-30 Days Past Dues status.

• If a significant increase in credit risk ('SICR') since initial recognition is identified, the loan asset is moved to
'Stage 2' but is not yet deemed to be credit impaired. (See note 1.7 for a description of how the Company
determines when a significant increase in credit risk has occurred). The company categorises loan assets
as 'Stage 2' primarily based on 31-90 Days Past Dues status.

• If the financial instrument is credit-impaired, the financial instrument is then moved to 'Stage 3'. (See note
1.7 for a description of how the Company defines credit-impaired and default). The company categorises
loan assets as 'Stage 3' primarily based on more than 90 Days Past Dues status.

(Refer note 47 for Stage wise gross carrying amount of loans and loss allowance provisioning).

The following are additional considerations for each type of portfolio held by the Company:

Retail Business- (Rural and Urban Finance)

Retail lending credit quality is determined on a collective basis based on a 12-month point in time ("PIT")
probability weighted PD for all loan asset that are not credit-impaired and for assets with SICR, lifetime
probability weighted PIT PD is used. PD for credit impaired asset is 1 as the DPD is 90 .

A centralized impairment model summarises the historical payment behaviors of the borrowers within a retail
portfolio which data is used to build the PD estimates. For estimating PD, day-past-due (DPD) status, vintage
of customer as measured by the Month-on-Book (MOB) and/ or a few other product specific parameters
(Prime/Non-Prime customers, New Book/ Old Book split, etc.) are considered for segmenting the portfolio to
differentiate the default risk within the respective retail products. The weighted average is determined (using
the count of customers as the weight) from quarterly snapshots.

LGD has been estimated for all the retail products using the defaulted accounts which are eventually closed
(either through normal repayments or through settlement/waivers) along with defaulted active accounts with
high DPD as of the end of the performance period allowing a reasonable window for collections post the
default. LGD is computed as average of 1 - (the ratio of recovery from the defaulted accounts / Principal
Outstanding (POS) at the time of default), the average being computed over the accounts considered for the
LGD estimation. The PD and LGD ratio were used to arrive at the ECL for all stages of loan assets.

Exposure at Default (EAD)

EAD represents the expected balance at default, taking into account the repayment of principal and interest
from the Balance Sheet date to the date of default together with any expected drawdowns of committed
facilities.

The Company's net exposure to credit risk, after taking into account credit risk mitigation, have been tabulated

K ci I r\\ a / Ý

Footnote:

Retail loans, other than unsecured loans aggregating ? 51,579.46 crore as of March 31, 2025, are generally
secured by a charge on the asset financed (farm equipment loans, two-wheeler loans, home loans and loans
against property) (as of March 31,2024: ? 42,732.48 crore). If the customer fails to pay, the Company would,
as applicable, liquidate collateral and/or set off accounts. For most products, the Company obtains direct debit
instructions from the customer. It is a criminal offence in India to issue a bad cheque.

Of the unmitigated on balance sheet exposure, a significant portion relates to cash held with banks, settlement
balances, and debt securities issued by governments all of which are considered to be lower risk.

Besides growth in the loan assets portfolio, increases in trading portfolio assets and financial assets at fair
value through the Statement of Profit and Loss have also contributed to the increase in the Company's net
exposure to credit risk. Investments in debt instruments are predominantly investment grade except where the
instrument is received in connection with loan granted.

Where collateral has been obtained in the event of default, the Company does not, ordinarily, use such assets
for its own operations and they are usually sold and off set against the outstanding loan assets.

The Company has invoked pledge of equity shares and non-convertible debentures ("NCD") in the companies,
pledged with the Company as collateral by the borrowers and these shares are being held by the Company as
bailee. (Refer note 39).

Concentration of exposure:

Concentrations of credit risk arise when a number of counterparties or exposures have comparable economic
characteristics, or such counterparties are engaged in similar activities or operate in the same geographical
areas or industry sectors so that their collective ability to meet contractual obligations is uniformly affected
by changes in economic, political or other conditions. The Company has established a diversified borrower
base as at March 31, 2025. The Company has put in place a framework of Risk Limits, which are monitored

on a quarterly basis to ensure that the overall portfolio is steered within the approved limits to minimize
concentration risk. The Risk Limits cover risk of concentration to a particular geography, industry, Company/
borrower or revenue counterparty of the borrowers etc. as are relevant to the respective product.

Market Risk Management:

Liquidity Risk:

This is the risk that the Company may be unable to service its contractual or contingent liabilities or support
its committed disbursements due to lack of adequate funding or liquidity.

Liquidity risk management in the Company is guided by the Board-approved Asset-Liability Management
('ALM') Policy, which provides the framework for the identification, measurement, monitoring and reporting of
liquidity risk arising from the Company's lending and borrowing activities. This risk is measured and managed
by setting up limits on structural liquidity gaps across various time-buckets and on relevant liquidity stock
ratios. Monthly reports on actual liquidity gaps against established limits are submitted to the Asset Liability
Management Committee (ALCO). The Company has been maintaining positive cumulative liquidity gaps for
all the time-buckets up to 1 year as a prudent risk management practice.

The Company manages liquidity risk through periodic stress testing and maintains a substantial liquidity buffer.
This buffer, designed to withstand a 30-day survival period under a severe stress scenario, includes High-Quality
Liquid Assets, Fixed Deposits, and Mutual Funds. The Company also continuously monitors its Liquidity Coverage
Ratio (LCR) above regulatory minimums and uses Early Warning Indicators (EWI) within its Contingency Funding
Plan to proactively address potential liquidity challenges. These EWIs are monitored on a regular basis.

Further, RBI has issued final guidelines on Liquidity Risk Management Framework under Master Direction -
Reserve Bank of India (Non-Banking Financial Company- Scale Based Regulation) Directions, 2023. As per the
said guidelines, NBFC are required to publicly disclose the below information related to liquidity risk on a quarterly
basis. Basis the above, the disclosure on liquidity risk for L&T Finance Limited as at March 31,2025 is given below:

(vi) Institutional set-up for Liquidity Risk Management

The Company's Board of Directors is responsible for overseeing and managing all risks, including liquidity
risk, in the Company's business. The Board approves the governance structure, policies, strategy and the
risk limits for the management of liquidity risk. The Board of Directors approves the constitution of the
Risk Management Committee (RMC) for the effective supervision, evaluation, monitoring and review
of various aspects and types of risks, including liquidity risk, faced by the Company. The meetings of
RMC are held at quarterly interval. Further, the Board of Directors also approves constitution of Asset
Liability Committee (ALCO), which functions as the strategic decision-making body for the asset-liability

management of the Component from risk-return perspective and within the risk appetite and guard-rails/
limit approved by the Board. The main objective of ALCO is to assist the Board and RMC in effective
discharge of the responsibilities of asset-liability management, market risk management, liquidity and
interest rate risk management and also to ensure adherence to risk tolerance/limits set up by the Board.
ALCO provides guidance and directions in terms of interest rate, liquidity, funding sources, and investment
of surplus funds. ALCO meetings are held once in a month or more frequently as warranted from time
to time. The minutes of ALCO meetings are placed before the RMC and the Board of Directors in its next
meeting for its perusal/approval/ratification.

(vi) Disclosure on Liquidity Coverage Ratio

RBI has issued final guidelines on Liquidity Risk Management Framework for Non-Banking Financial
Companies and Core Investment Companies on November 04, 2019. As per the said guidelines, LCR
requirement shall be binding on all non-deposit taking systemically important NBFCs with asset size of
? 10,000 crore and above from December 1, 2020, with the minimum LCR to be 50%, progressively
increasing, till it reaches the required level of 100%, by December 1,2024, as per the time-line given below:

Foreign Exchange Rate Risk:

In the normal course of its business, the Company does not deal in foreign exchange in a significant way. Any
foreign exchange exposure on account of foreign exchange borrowings is fully hedged to safeguard against
exchange rate risk. The Company's treasury risk management policy covers the framework for managing
currency risk including hedging. The Company determines hedge effectiveness for hedging instrument
at the inception of the hedge relationship and through periodic prospective effectiveness assessments
to ensure that an economic relationship exists between the hedged item and hedging instrument. The
Company enters into hedge relationships where the critical terms of the hedging instrument match with the
terms of the hedged item, and so a qualitative and quantitative assessment of effectiveness is performed.

Interest Rate Risk:

Interest rate risk, which arises from changes in market interest rates affecting the Company's Net Interest
Income (NII) is mitigated by the Company's ALM Policy, which stipulates Interest Rate Sensitive Gaps for all the
time-buckets. An Interest Rate Sensitivity Statement, prepared monthly and presented to ALCO, tracks these
gaps, specifically the mismatch between the Rate Sensitive Assets and Liabilities across various time buckets.

Security Prices:

The Company's investment portfolios consist of government securities, corporate bonds and debentures.
To mitigate credit and interest rate risk, risk limits in the form of portfolio size limits, concentration limits
and mark to market (MTM) limit are stipulated. Early warning indicators in the form of alarm limits have
also been put in place. Reporting periodicity and escalation matrix upon the breach of alarm limits as well
as risk limits have been clearly defined. The Company does not invest in Equity stocks and therefore is not
exposed to equity price risk.

b) the additional Gross NPAs identified by RBI exceeds 5 percent of the reported Gross NPAs for financial year
2024-25 : Nil

49.15 Disclosure of Gold Loan Portfolio

There were no loans given against the collateral of gold jewellery and hence the percentage of such loans to
the total outstanding asset is Nil (Previous Year Nil).

49.16 Disclosure of Gold Auction

The company doesn't have any gold loan product. Hence Not applicable.

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

The company does not have any joint venture or subsidiary abroad, hence not applicable.

49.18 Off-balance Sheet SPVs sponsored

The company does not have any Off-balance Sheet SPVs sponsored, hence not applicable.

49.19 Credit Default Swaps

The company has not undertaken any Credit Default swaps transaction during the current year and previous
year.

49.20 Participation in Currency Options and Currency Futures

The company has not undertaken any transaction during the current year and previous year for currency
options and currency futures.

49.21 Asset Liability Management Maturity pattern of certain items of Assets and Liabilities:

Footnote: As per para 2(b) of RBI circular RBI/2019-20/170/DOR (NBFC).CC.PD.No.109/22.10.106/2019-
20 dated March 13, 2020, Where impairment allowance under Ind AS 109 is lower than the provisioning
required under Income Recognition, Asset Classification and Provisioning (IRACP) (including standard asset
provisioning), NBFCs shall appropriate the difference from their net profit or loss after tax to a separate
'Impairment Reserve'. However total IND AS 109 impairment allowance is higher by ? 3,066.28 crore as
compare to IRACP, hence appropriation to impairment reserve is not required during the financial year.

49.23 Schedule to the Balance Sheet of non-banking financial company (as required in terms of paragraph 31 of
Reserve Bank of India Non-Banking Financial Company Scale Based Regulation) Directions 2023, issued by
Reserve Bank of India dated October 19, 2023 as amended vide circular No. RBI/DoR/2023-24/106DoR.FIN.
REC.NO.45 /03.10.119/2023 24 (the "RBI Master Directions")

*Included for the purpose of arithmetical accuracy

Note : 1 This includes one-time restructuring implemented as prescribed in the notifcation no. RBI/2020-21/16 DOR.NO.BP.
BC/3/21.04.048/2020-21 Resolution Framework for COVID-19-related Stress and RBl/2021-22/31/DOR.STR.REC. 11
/21.04.048/2021-22 Resolution Framework - 2.0: Resolution of Covid-19 related stress of Individuals and Small Businesses
dated May 05, 2021.

2 Since the disclosure of restructured accounts pertains to section “Others", the first two sections namely “Under CDR
Mechanism" and “Under SME Debt Restructuring Mechanism" as per the format prescribed in the Master Direction -
Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023, company are not
included above.

51 The Company uses accounting softwares for maintaining its books of account, which has a feature of recording
audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in
these softwares.

However, the audit trail/logs in respect of direct changes made at the database level, if any, are not enabled. The
Company uses an alternate tool to monitor such database-level changes. Further, the audit trail records except
for the database-level changes as mentioned above, have been preserved by the Company in accordance with
the applicable statutory requirements relating to the retention of books of account.

52 The following additional information (other than what is already disclosed elsewhere) is disclosed
in terms of amendments dated March 24, 2021 in Schedule III to the Companies Act 2013 with effect
from 1st day of April, 2021:-

(a) There is no proceeding initiated or pending against the company during the year for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(b) The company is not declared wilful defaulter by any bank or financial Institution or any other lenders.

(c) Being a systemically important non-banking financial company registered with the Reserve Bank of India
as per Reserve Bank of India Act, 1934 (2 of 1934), the provisions prescribed under clause (87) of section
2 of the companies Act 2013 read with Companies (Restriction on number of Layers) Rules, 2017 is not
applicable to the company.

(d) There is no scheme of arrangements has been approved during the year by the Competent Authority in
terms of sections 230 to 237 of the Companies Act, 2013 other than disclosed under note 53.

(e) There is no transaction that has not been recorded in the books of accounts and surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961.

(f) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year.

(g) The Company has obtained borrowings from banks or financial institutions on the basis of security of
current assets and quarterly returns or statements of current assets filed by the Company with banks or
financial institutions are in agreement with the books of accounts.

(h) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium
or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary
shall :

(i) 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

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

(i) The Company has not received any funds from any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Company
shall :

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

(j) There are no creation or satisfaction of charges as at March 31, 2025 pending with ROC beyond the
statutory period.

(k) The Company has utilised all the borrowings for the purpose for which they have been borrowed.

53 The amalgamation of the erstwhile L&T Finance Limited, L&T Infra Credit Limited and L&T Mutual Fund Trustee
Limited with the Company, with appointed date of April 1,2023, by way of merger by absorption pursuant to
a scheme of arrangement (the Scheme) under the provisions of Sections 230 - 232 read with Section 52 and
other relevant provisions of the Companies Act, 2013 (including the rules thereunder) has become effective
from December 04, 2023 in accordance with the terms of the scheme.

Pursuant to the aforesaid scheme and necessary approval inter alia from the Registrar of Companies, name of
the Company has been changed from L&T Finance Holdings Limited to L&T Finance Limited w.e.f. March 28,
2024.

54 There are no due and outstanding amount to be credited to Investor Education & Protection Fund as at
March 31, 2025.

55 Previous year figures have been regrouped/reclassified wherever necessary, to make them comparable with
the current year figures.

56 The above financial statements have been reviewed by the Audit Committee and subsequently approved by
the Board of Directors at its meeting held on April 25, 2025.

In terms of our report attached of even date For and on behalf of the Board of Directors of

For Brahmayya and Co., For T R Chadha & Co LLP L&T Finance Limited

Chartered Accountants Chartered Accountants (formerly Known as L&T Finance Holdings Limited)

ICAI FRN: 000515S ICAI FRN: 006711N/N500028

P.S. Kumar Vikas Kumar S. N. Subrahmanyan Sudipta Roy

Partner Partner Non-Executive Chairman Managing Director &

Membership No. 015590 Membership No. 075363 (DIN: 02255382) Chief Executive Officer

(DIN: 08069653)

Sachinn Joshi Apurva Rathod

Chief Financial Officer Company Secretary

Membership No: A18314

Place : Mumbai Place : Mumbai Place : Mumbai

Date : April 25, 2025 Date : April 25, 2025 Date : April 25, 2025