Tata Capital Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2026

i. Statement of compliance:

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the
Companies (Indian Accounting Standards) Rules, 2015 (as amended by the Companies (Indian Accounting Standards) Rules, 2016),
notified under Section 133 of the Companies Act, 2013 (the"Act") (as amended), other relevant provisions of the Act, guidelines issued by
the Reserve Bank of India as applicable to NBFCs and other accounting principles generally accepted in India. Any application guidance
/ clarifications / directions issued by RBI or other regulators are implemented as and when they are issued / applicable, the guidance
notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with
other statutory promulgations require a different treatment. Material accounting policy information has been consistently applied. The
standalone financial statements have been reviewed by the Audit Committee and have been approved and taken on record by the
Board of Directors at their respective meetings held on April 23, 2026.

ii. Presentation of standalone financial statements:

The Balance Sheet, Statement of Profit and Loss and Statement of Changes in Equity are prepared and presented in the format
prescribed in the Division III of Schedule III of the Companies Act, 2013 (the ''Act'') , the Statement of Cash Flows has been prepared and
presented as per the requirements of Ind AS.

A summary of the material accounting policy , other explanatory information and notes is in accordance with the Companies (Indian
Accounting Standards) Rules, 2015 (as amended) as specified under Section 133 of the Act including applicable Indian Accounting
Standards (IndAS), and accounting principles generally accepted in India.

Financial assets and financial liabilities are generally reported gross in the balance sheet. They are only offset and reported net when, in
addition to having an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future
event, the parties also intend to settle on a net basis.

Amounts in the standalone financial statements are presented in Indian Rupees in Crore, which is also the Company''s functional
currency and all amounts have been rounded off to the nearest crore unless otherwise indicated.

iii. Basis of measurement:

The financial statements have been prepared on the historical cost basis except for :

• Certain financial instruments that are measured at fair values at the end of each reporting period as explained in the material
accounting policy information below. Assets and liabilities acquired under business combination are measured at fair value at
initial recognition.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services at the time of entering
into the transaction.

iv. Measurement of fair values:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique.

In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the measurement date.

A number of the Company''s material accounting policy information and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities.

Fair value for measurement and/or disclosure purposes for certain items in these standalone financial statements is determined
considering the following measurement methods:

Fair values are categorised into different levels (Level 1, Level 2 or Level 3) in a fair value hierarchy based on the inputs used in the
valuation techniques. When measuring the fair value of an asset or a liability, the Company uses observable market data as far as
possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then
the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.

The levels are described as follows:

a. Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the
measurement date;

b. Level 2: inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either
directly or indirectly; and

c. Level 3: inputs are unobservable inputs for the valuation of assets or liabilities that the Company can access at the measurement
date.

Valuation model and framework used for fair value measurement and disclosure of financial instrument Refer notes 34A and 34B.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.

v. Use of estimates and judgements:

The preparation of standalone financial statements in conformity with IndAS requires the Management of the Company to make
judgements, assumptions and estimates that affect the reported balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the standalone financial statements and reported amounts of income and expenses for the
reporting period. The application of material accounting policy information that require critical accounting estimates involving complex
and subjective judgments and the use of assumptions in the standalone financial statements have been disclosed as applicable in
the respective notes to accounts. Accounting estimates could change from period to period. Future results could differ from these
estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding
the estimates. Changes in estimates are reflected in the standalone financial statements in the period in which changes are made and,
if material, their effect are disclosed in the notes to the standalone financial statements.

Assumptions, estimation of uncertainties and judgements:

Information about judgements made in applying material accounting policy information that have most significant effect on the
amount recognised in the standalone financial statements is included in the following note:

- Note xi - classification of financial assets: assessment of the business model within which the assets are held and assessment
of whether the contractual terms of the financial asset are solely payments of principal and interest on the principal amount
outstanding.

Information about assumptions and estimation of uncertainties that have a significant risk of resulting in a material adjustment in the
year ending March 31, 2026 are included in the following notes:

- Note xiii - impairment test of non-financial assets: key assumption underlying recoverable amounts.

- Note xii - The Company''s EIR methodology: rate of return that represents the best estimate of a constant rate of return over the
expected behavioural life of loans given/taken.

- Note xiv - useful life of property, plant, equipment and intangibles.

- Note xxiii - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude
of an outflow of resources.

- Note xvi - measurement of defined benefit obligations: key actuarial assumptions.

- Note 42 - significant judgments are involved in determining the provision for income taxes, including amount expected to be paid
/ recovered for uncertain tax positions.

- Note 34 - determination of the fair value of financial instruments with significant unobservable inputs.

- Note 36A(iii) - impairment of financial instruments: assessment of whether credit risk on the financial asset has increased
significantly since initial recognition, assumptions used in estimating recoverable cash flows and incorporation of forward-looking
information in the measurement of expected credit loss (ECL). The weights assigned to different scenarios for measurement of
forward looking ECL, i.e. best case, worst case and base case also requires judgement.

- Measurement of fair value assets and liabilities acquired under business combination.

vi. Interest:

Interest consists of consideration for the time value of money, for the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

Interest income is recognised using the effective interest method. The effective interest rate (EIR) is the rate that exactly discounts
estimated future cash flows through the expected life of the financial instrument to the gross carrying amount of the financial asset.

Calculation of the EIR includes all fees received that are incremental and directly attributable to the acquisition of a financial asset.

Interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets (i.e. at the
amortised cost of the financial asset before adjusting for any expected credit loss allowance). For credit-impaired financial and purchase
originated credit impaired assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired
financial assets {i.e. at the amortised cost of the financial asset after adjusting for any expected credit loss allowance (ECLs)}. The
Company assesses the collectability of the interest on credit impaired assets at each reporting date. Based on the outcome of such
assessment, the interest income accrued on credit impaired and purchase originated credit impaired financial assets are accounted for
as income and written off as per the write-off policy of the Company.

The ''amortised cost'' of a financial asset is the amount at which the financial asset is measured on initial recognition minus the principal
repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial
amount and the maturity amount and, for financial assets, adjusted for any expected credit loss allowance.

The ''gross carrying amount of a financial asset'' is the amortised cost of a financial asset before adjusting for any expected credit loss
allowance.

vii. Income from direct assignment:

Gains (Excess interest spread (EIS)) arising out of direct assignment transactions comprise the difference between the interest on
the loan portfolio and the applicable rate at which the direct assignment is entered into with the assignee. The future EIS basis the
scheduled cash flows over the expected life, on execution of the transaction, discounted at the applicable rate entered into with the
assignee is recorded upfront in the Statement of Profit and Loss. Any subsequent changes in the excess interest spread is recognised
with the corresponding adjustment to the carrying amount of the assets.

viii. Fee and Commission income not integral to effective interest rate (EIR) method under IndAS 109 and Income from
services and distribution of financial products:

The Company recognises the fee and commission income not integral to EIR under IndAS 109 in accordance with the terms of the
relevant customer contracts / agreements and when it is probable that the Company will collect the consideration for following :

Revenue in the form of income from financial advisory (other than for those items to which IndAS 109 - Financial Instruments are
applicable) is measured at the transaction price allocated to the performance obligation, in accordance with IndAS 115 - Revenue from
contracts with customers.

The Company recognises revenue from contracts with customers (other than financial assets to which IndAS 109 ''Financial instruments''
is applicable) based on a five step model as set out in IndAS 115 - ''Revenue from contracts with customers''.

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.

Fees and commission income

1. The Company recognises service and administration charges towards rendering of additional services to its loan customers on
satisfactory completion of service delivery. Bounce charges levied on customers for non-payment of instalment on the contractual
date is recognised on realisation.

2. Fees on value added services and products are recognised on rendering of services and products to the customer.

3. Distribution income is earned by distribution of services and products of other entities under distribution arrangements. The income
so earned is recognised on successful distribution on behalf of other entities subject to there being no significant uncertainty of its
recovery.

4. Foreclosure charges are collected from loan customers for early payment / closure of loan and are recognised on realisation.

5. Advisory Fees are charged to offshore investment manager for providing non-exclusive non-binding support services for
transactions by private equity funds. Income from advisory services is accounted using cost plus mark-up as and when the service
is rendered, provided there is reasonable certainty of its ultimate realization.

6. Private Equity Asset Management fees are charged for assets under management and are recognised as contracted under
investment management agreement with each Private Equity Fund.

7. Income from Managerial services are charged for providing managerial and marketing services and are accounted using cost plus
mark-up as and when the underlying costs are incurred. Reimbursement of expenses incurred for rendering services are reduced
from such expense heads, provided there is reasonable certainty of its ultimate realization.

8. Wealth Management Business:

a) Brokerage / Distribution Fee Income

Bonds / Fixed Deposits / Unlisted Equity / Wills & Trust / Alternative Investment Funds / International products / External Asset
Cross sell / Other Referral Products

Income is recognised as per the contractual rate on trade date basis and is exclusive of goods and services tax and securities
transaction tax (STT) wherever applicable.

b) Insurance Income

Income is recognised for the commission earned by the Company on the issuance of policies logged in during the month and
confirmed by the Insurers subject to cancellations done by the customers.

c) Income from Mutual Funds

Income is recognised as per the commission specified in the agreement on daily average assets under management which is
provided by Registrar and Transfer Agents of each Mutual Fund Entities.

d) Income from Portfolio Management Services ("PMS") & Alternative Investment Funds ("Trail based AIF")

a. Income from PMS and Trail based AIF is recognised on monthly basis on the monthly closing assets of each partner and as
per the contractual commission specified in the agreement.

b. Processing fees, if any, is recognised on upfront basis in the year of receipt.

c. Performance based fee, wherever applicable, is recognised as a percentage of annual profit, in accordance with the terms
of the agreement with clients on the completion of the period.

ix. Dividend income

Income from dividend on investment in equity shares and preference share of corporate bodies and units of mutual funds is accounted
when the Company''s right to receive dividend is established and it is probable that the economic benefits associated with the dividend
will flow to the entity and the amount of the dividend can be measured reliably. Dividend income on financial assets measured at fair
value through profit and loss is presented under Dividend income and not as a part of Net gains/(losses) on fair value changes.

x. Leases

Asset given on lease:

Leases are classified as operating lease where significant portion of risks and reward of ownership of assets acquired under lease is
retained by the lessor. Leases of assets under which substantially all of the risks and rewards of ownership are effectively retained by
the lessee are classified as finance lease.

Assets given under finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are
apportioned between principal and interest on the internal rate of return. The principal amount received reduces the net investment in
the lease and interest is recognised as revenue.

Lease rental - under operating leases (excluding amount for services such as insurance and maintenance) are recognised on a
straight-line basis over the lease term.

Asset taken on lease:

The Company''s lease asset classes primarily consist of leases for properties.

The Company presents right-of-use assets and lease liabilities separately on the face of the Balance sheet. Lease payments (including
interest) have been classified as financing cash flows.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The cost of the right-of-use asset
measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments
made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of
costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which
it is located. The right-of-use asset is subsequently measured at cost less any accumulated depreciation and accumulated impairment
loss, if any, and adjusted for certain re-measurements of the lease liability. The right-of-use assets is depreciated using the straight-line
method from the commencement date to the end of the lease term. Right-of-use assets are tested for impairment whenever there is
any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the Statement of Profit and
Loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of
the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that
rate cannot be readily determined, the Company uses incremental borrowing rate.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. The carrying
amount of lease liability is remeasured to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease
payments. A change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes
in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably
certain not be exercised.

The Company has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal
options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities and right-of-use assets recognised. The discounted rate is generally based on
incremental borrowing rate specific to the lease being evaluated.

xi. Borrowing cost:

Borrowing costs include interest expense calculated using the EIR on respective financial instruments measured at amortised cost and
exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.

The effective interest rate (EIR) is the rate that exactly discounts estimated future cash flows through the expected life of the financial
instrument to the gross carrying amount of the financial liability.

Calculation of the EIR includes all fees paid that are incremental and directly attributable to the issue of a financial liability.

xii. Financial Instruments:

Financial assets and financial liabilities are recognised in the Company''s balance sheet on trade date, i.e. when the Company becomes
a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs and revenues that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs and revenues of financial assets or financial liabilities carried at fair value through the profit or loss
account are recognised immediately in the Statement of Profit and Loss. Trade Receivables are measured at transaction price.

a) Financial assets

Classification

On initial recognition, depending on the Company''s business model for managing the financial assets and its contractual cash flow
characteristics, a financial asset is classified as measured at;

1) Amortised cost;

2) Fair value through other comprehensive income (FVTOCI); or

3) Fair value through profit and loss (FVTPL).

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its
business model for managing financial assets.

A financial asset is measured at amortised cost using Effective Interest Rate (EIR) method if it meets both of the following conditions
and is not recognised as at FVTPL:

- The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present
subsequent changes in the investment''s fair value in OCI (designated as FVTOCI - equity investment). This election is made an
investment - by - investment basis.

All financials assets not classified and measured at amortised cost or FVTOCI as described above are measured at FVTPL. On initial
recognition, the Company may irrevocably designate the financials assets that otherwise meets the requirements to be measured
at amortised cost or at FVTOCI or at FVTPL, if doing so eliminates or significantly reduces the accounting mismatch that would
otherwise arise.

Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level
because this best reflects the way the business is managed and information is provided to management. The information
considered includes:

- the stated policies and objectives for the portfolio and the operation of those policies in practice;

- how the performance of the portfolio is evaluated and reported to the Company''s management;

- the risks that affect the performance of the business model (and the financial assets held within that business model) and how
those risks are managed;

- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectation about
future sales activity;

- how managers of the business are compensated (e.g. whether the compensation is based on the fair value of the assets
managed or on the contractual cash flows collected).

At initial recognition of a financial asset, the Company determines whether newly recognised financial assets are part of an existing
business model or whether they reflect a new business model. The Company reassess its business models each reporting period to
determine whether the business models have changed since the preceding period.

Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ''principal'' is defined as the fair value of the financial asset on initial recognition. That principal
amount may change over the life of the financial assets (e.g. if there are payments of principal). Amount of ''Interest'' is defined
as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a
particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit
margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the
Company considers:

- Contingent events that would change the amount or timing of cash flows;

- Terms that may adjust the contractual coupon rate, including variable interest rate features;

- Prepayment and extension features; and

- Terms that limit the Company''s claim to cash flows from specified assets.

Contractual cash flows that are SPPI are consistent with a basic lending arrangement. Contractual terms that introduce exposure
to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement, such as exposure to changes in
equity prices or commodity prices, do not give rise to contractual cash flows that are SPPI.

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include
reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant
discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially
represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable
additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature
is insignificant at initial recognition.

Reclassifications within classes of financial assets

Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Company changes its
business model for managing financial assets.

The classification and measurement requirements of the new category apply prospectively from the first day of the first reporting
period following the change in business model that result in reclassifying the Company''s financial assets.

Impairment of Financial Asset

Impairment approach

Overview of the Expected Credit Losses (ECL) principles

The Company records allowance for expected credit losses for all loans (including those classified as measured at FVTOCI), together
with loan commitments, in this section all referred to as ''financial instruments'' other than those measured at FVTPL. Equity
instruments are not subject to impairment under IndAS 109.

The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss or
LTECL), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the
12 months'' expected credit loss (12m ECL). The Company''s policies for determining if there has been a significant increase in credit
risk are set out in Note 36A.

The 12m ECL is the portion of LTECLs that represent the ECLs that result from default events on a financial instrument that are
possible within the 12 months after the reporting date.

Both LTECLs and 12m ECLs are calculated on an individual/portfolio basis - having similar risk characteristic, depending on the
nature of the underlying portfolio of financial instruments.

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a financial
instrument''s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring
over the remaining life of the financial instrument.

Based on the above process, the Company categorises its loans into Stage 1, Stage 2 and Stage 3 & Purchase originated credit-
impaired as described below:

Stage 1: When loans are first recognised, the Company recognises an allowance based on 12mECLs. This also include facilities
where the credit risk has improved and the loan has been reclassified from Stage 2.

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the
LTECLs. Stage 2 loans also include facilities, where the credit risk has improved and the loan has been reclassified from Stage 3.

Stage 3: Loans considered credit-impaired. A default on a financial asset is when the counterparty fails to make the contractual
payments within 90 days of when they fall due. Accordingly, the financial assets shall be classified as Stage 3, if on the reporting
date, it has been 90 days past due. Further if the customer has requested forbearance in repayment terms, such restructured,
rescheduled or renegotiated accounts are also classified as Stage 3. Non-payment on another obligation of the same customer is
also considered as a stage 3. Defaulted accounts include customers reported as fraud in the Fraud Risk Management Committee.
Once an account defaults as a result of the Days past due condition, it will be considered to be cured only when entire arrears of
interest and principal are paid by the borrower. The Company records an allowance for the LTECLs.

Purchase Originated Credit Impaired (POCI) : POCI are assets that are credit-impaired on initial recognition. Financial asset that were
classified as POCI at initial recognition should be treated as POCI in all subsequent periods until they are derecognised. At initial
recognition, POCI assets are recognised at their fair value. After initial recognition POCI assets are measured at amortised costs.

Undrawn loan commitments

Undrawn loan commitments are commitments under which, over the duration of the commitment, the Company is required to
provide a loan with pre-specified terms to the customer. Undrawn loan commitments are in the scope of the ECL requirements.

Financial guarantee contract:

A financial guarantee contract requires the Company to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL
and not arising from a transfer of a financial asset, are subsequently measured at the higher of:

• the amount of the loss allowance determined in accordance with IndAS 109; and

• the amount initially recognised less, where appropriate, cumulative amount of income recognised in accordance with the
Company''s revenue recognition policies. The Company has not designated any financial guarantee contracts as FVTPL.

Company''s ECL for financial guarantee is estimated based on the present value of the expected payments to reimburse the holder
for a credit loss that it incurs. The shortfalls are discounted by the interest rate relevant to the exposure.

The Measurement of ECLs

The Company calculates ECLs based on a probability-weighted scenario to measure the expected cash shortfalls, discounted at an
approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to an entity in accordance with the
contract and the cash flows that the entity expects to receive.

The mechanics of the ECL calculations are outlined below and the key elements are, as follows:

Probability of Default (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.

Exposure at Default (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, and accrued interest from missed payments.

Loss Given Default (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.

Impairment losses and releases are accounted for and disclosed separately from modification losses or gains that are accounted for
as an adjustment of the financial asset''s gross carrying value

When estimating LTECLs for undrawn loan commitments, the Company estimates the expected portion of the loan commitment
that will be drawn down over its expected life. The ECL is then based on the present value of the expected shortfalls in cash flows
if the loan is drawn down, based on a probability-weightage. The expected cash shortfalls are discounted at an approximation to
the expected EIR on the loan.

The above calculated PDs, EAD and LGDs are reviewed and changes in the forward looking estimates are analysed during the
period.

The mechanics of the ECL method are summarised below:

Stage 1: The 12 months ECL is calculated as the portion of LTECLs that represent the ECLs that result from default events on a
financial instrument that are possible within the 12 months after the reporting date. These expected 12 months default probabilities
are applied to a forecast EAD and multiplied by the expected LGD.

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the
LTECLs. The mechanics are similar to those explained above, but PDs and LGDs are estimated over the lifetime of the instrument.
The expected cash shortfalls are discounted by an contractual or portfolio EIR as the case may be.

Stage 3: For loans considered credit-impaired, the Company recognises the lifetime expected credit losses for these loans. The
method is similar to that for stage 2 assets, with the PD set at 100%.

Purchase Originated credit impaired: For loans considered POCI, the Company recognises the lifetime expected credit losses for
these loans. The method is similar to that for stage 2 assets, with the PD set at 100%.

In ECL model the Company relies on broad range of forward looking information for economic inputs.

The Company recognises loss allowance for expected credit losses (ECLs) on all financial assets at amortised cost that are debt
instruments, - debt financial assets at fair value through other comprehensive income, loan commitments and financial guarantee
contracts. No impairment loss is recognised on equity investments.

When determining whether credit risk of a financial asset has increased significantly since initial recognition and when estimating
expected credit losses, the Company considers reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative information and analysis, including on historical experience
and forward-looking information (Refer Note 36A(iii)).

Impairment of Trade receivable and Operating lease receivable

Impairment allowance on trade receivables is made under simplified approach on the basis of life-time credit loss method, in
addition to specific provision considering the uncertainty of recoverability of certain receivables.

Write-off

Impaired loans and receivables are written off, against the related allowance for loan impairment on completion of the Company''s
internal processes and when the Company concludes that there is no longer any realistic prospect of recovery of part or all of
the loan. For loans that are individually assessed for impairment, the timing of write-off is determined on a case by case basis.
A write-off constitutes a derecognition event. The Company has a right to apply enforcement activities to recover such written off
financial assets. Subsequent recoveries of amounts previously written off are credited to the Statement of Profit and Loss.

Collateral valuation and repossession

To mitigate the credit risk on financial assets, the Company seeks to use collateral, where possible as per the powers conferred
on the Non-Banking Finance Companies under the Securitisation and Reconstruction of Financial Assets and Enforcement of
Securities Interest Act, 2002 ("SARFAESI").

The Company provides fully secured, partially secured and unsecured loans to individuals and Corporates. In its normal course of
business upon account becoming delinquent, the Company physically repossess properties or other assets in its retail portfolio.
Any surplus funds are returned to the customers/obligors. As a result of this practice, the residential properties, vehicles, plant and
machinery under legal repossession processes are not recorded on the balance sheet and not treated as non-current assets held
for sale unless the title is also transferred in the name of the Company.

Modification and Derecognition of financial assets
Modification of financial assets

A modification of a financial asset occurs when the contractual terms governing the cash flows of a financial asset are renegotiated
or otherwise modified between initial recognition and maturity of the financial asset. A modification affects the amount and/
or timing of the contractual cash flows either immediately or at a future date. The Company renegotiates loans to customers in
financial difficulty to maximise collection and minimise the risk of default. A loan forbearance is granted in cases where although
the borrower made all reasonable efforts to pay under the original contractual terms, there is a high risk of default or default has
already happened and the borrower is expected to be able to meet the revised terms. The revised terms in most of the cases include
an extension of the maturity of the loan, changes to the timing of the cash flows of the loan (principal and interest repayment),
reduction in the amount of cash flows due (principal and interest forgiveness). Such accounts are classified as stage 3 immediately
upon such modification in the terms of the contract.

Not all changes in terms of loans are considered as renegotiation and changes in terms of a class of obligors that are not overdue
is not considered as renegotiation and is not subjected to deterioration in staging.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

1) the rights to receive cash flows from the asset have expired, or

2) the Company has transferred its rights to receive cash flows from the asset and substantially all the risks and rewards of
ownership of the asset, or the Company has neither transferred nor retained substantially all the risks and rewards of ownership
of the asset, but has transferred control of the asset.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues
to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated
to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any
new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.

Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVTOCI is not recognised
in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is
created or retained by the Group is recognised as a separate asset or liability.

Securitization and Assignment

In case of transfer of loans through securitisation and direct assignment transactions, the transferred loans are derecognised and
gains/losses are accounted for, only if the Company transfers substantially all risks and rewards specified in the underlying assigned
loan contract.

Financial liability and Equity and Compound Financial Instruments

Debt and equity instruments that are issued are classified as either financial liabilities or as equity in accordance with the substance
of the contractual arrangement.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities are subsequently measured at the amortised cost using the effective interest method, unless at initial recognition,
they are classified as fair value through profit and loss. Interest expense are recognised in the Statement of Profit and Loss. Any gain
or loss on derecognition is also recognised in the Statement of Profit and Loss.

Financial liabilities

A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial assets or financial
liabilities with another entity under conditions that are potentially unfavourable to the Company or a contract that will or may be
settled in the Company''s own equity instruments and is a non-derivative contract for which the Company is or may be obliged
to deliver a variable number of its own equity instruments, or a derivative contract over own equity that will or may be settled
other than by the exchange of a fixed amount of cash (or another financial asset) for a fixed number of the Company''s own equity
instruments.

Classification

The Company classifies its financial liability as "Financial liability measured at amortised cost" except for those classified as financial
liabilities measured at fair value through profit and loss (FVTPL).

Cumulative Redeemable Preference shares (CRPS) is classified as a financial liability as per IndAS 109 and dividend accrued on such
instrument is recorded as Finance cost.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable
is recognised in profit or loss.

Equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. A conversion option
that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own
equity instruments is an equity instrument.

No gain/loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.
Instruments entirely equity in nature

The Perpetual debt instruments issued by the Company are assessed for classification as either equity or financial liability in
accordance with the principles laid down under IndAS 32 - Financial Instruments: Presentation.

An instrument is classified as a financial liability if the Company has a contractual obligation to deliver cash or another financial
asset to the holder and if the Company has no contractual obligation to deliver cash or financial assets or the Company has full
discretion to defer or cancel coupon payments are classified as equity instruments.

Any distributions net of tax on instruments classified as equity are recognised directly in the Statement of Changes in Equity.

b) Derivative Financial Instruments

The Company holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded
derivatives are separated from the host contract and accounted for separately if certain criteria are met.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured
to their fair value at each balance sheet date. The resulting gain/loss is recognised in the Statement of Profit and Loss immediately
unless the derivative is designated and is effective as a hedging instrument, in which event the timing of the recognition in the
Statement of Profit and Loss depends on the nature of the hedge relationship.

The Company designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with its
floating rate borrowings or letters of credit issued on behalf of customers, or other highly probable forecast transaction arising due
to changes in interest rates and/or exchange rates. The effective portion of changes in the fair value of these hedging instruments
is recognised in Other Comprehensive Income (OCI).

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for
undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging
instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each
other.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative
is recognised in OCI and accumulated in the other equity under ''cash flow hedging reserve. The effective portion of changes in the
fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined
on a present value basis, from inception of the hedge. The extent to which the changes in the fair value or the cash flows of the
hedging instrument are greater or less than those on the hedged item (ineffective portion of changes in fair value of the derivative)
is recognised immediately in profit or loss.

In certain cases, to calculate the value of the change in the hedged item for the purpose of measuring hedge ineffectiveness, the
Company uses a derivative that matches the critical terms of the hedged item (hypothetical derivative). The amount that should be
recognised in OCI is adjusted to the lower (in absolute terms) of cumulative change in hedging instrument or cumulative change
in the hedged item from the inception of the hedge.

The Company designates only the change in fair value of the spot element of forward exchange contracts as the hedging
instrument in cash flow hedge relationships. The change in fair value of the forward element of the forward exchange contracts
(forward points) is amortised on a systematic and rational basis over the period of the contract and accumulated under cash flow
hedging reserve..

In case the designated hedging instruments are option contracts, the change in fair value of the time value of an option that has
the characteristics of a cost for obtaining protection against a risk over a period of time is recognised in other comprehensive
income to the extent that it relates to the hedged item and accumulated under cost of hedging reserve. The time value at the date
of designation of the option as a hedging instrument, is allocated on a systematic and rational basis from cost of hedging reserve to
profit or loss. over the period of the hedge. The change in intrinsic value of an option contract is recorded in other comprehensive
income and accumulated under cash flow hedge reserve.

If a hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised,
then hedge accounting is discontinued prospectively. If the hedged future cash flows are no longer expected to occur, then the
amounts that have been accumulated in other equity are immediately reclassified to profit or loss.

c) Cash, Cash equivalents and bank balances

Cash, Cash equivalents and bank balances include fixed deposits, margin money deposits, and earmarked balances with banks are
carried at amortised cost.

xiii. Property, plant and equipment (PPE)

a) PPE

PPE acquired by the Company are reported at acquisition cost less accumulated depreciation and accumulated impairment
losses, if any. Estimated cost of dismantling and removing the item and restoring the site on which its located does not arise
for owned assets, for leased assets the same are borne by the lessee as per the lease agreement. The acquisition cost includes
any cost attributable for bringing an asset to its working condition net of tax/duty credits availed, which comprises of purchase
consideration and other directly attributable costs of bringing the assets to their working condition for their intended use. PPE is
recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. Subsequent expenditure on PPE after its purchase is capitalised only if it is probable that the future
economic benefits will flow to the enterprise and the cost of the item can be measured reliably.

b) Capital work-in-progress

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress" and carried at cost,
comprising direct cost, related incidental expenses and attributable interest.

c) Other Intangible assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to
the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits
availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses
that are specifically attributable to the acquisition of intangible assets are allocated and capitalised as a part of the cost of the
intangible assets. Expenses on software support and maintenance are charged to the Statement of Profit and Loss during the
period in which such costs are incurred.

d) Intangible assets under development

Intangible assets not ready for the intended use on the date of Balance Sheet are disclosed as"Intangible assets under development".

e) Depreciation and Amortisation

Depreciable amount for tangible property, plant and equipment is the cost of an asset, or other amount substituted for cost, less
its estimated residual value. The residual value of each asset given on Operating lease is determined at the time of recording of
the lease asset. If the residual value of the Operating lease asset is higher than 5%, the Company has a justification in place for
considering the same.

Depreciation on tangible property, plant and equipment deployed for own use has been provided on the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of buildings, computer equipment,
software, plant and machinery and vehicles, in whose case the life of the assets has been internally assessed based on the nature
of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, etc.

Based on internal assessment, depreciation on tangible property, plant and equipment deployed on operating lease has been
provided on the straight-line method over the primary lease period of the asset. The estimated useful life and residual values are
also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on
prospective basis. Depreciation for additions to/deductions from owned assets is calculated pro rata to the remaining period of
use. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the
asset is allocated over its remaining useful life. All capital assets with individual value less than '' 5,000/- are depreciated fully in the
period in which they are purchased.

Purchased software / licenses are amortised over the estimated useful life during which the benefits are expected to accrue. The
method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the
estimate being accounted for on a prospective basis. Amortisation on impaired assets is provided by adjusting the amortisation
charge in the remaining periods so as to allocate the asset''s revised carrying amount over its remaining useful life.

f) Investment property

Properties held to earn rentals and/or capital appreciation are classified as Investment properties and measured and reported
at cost, including transaction costs. Subsequent to initial