2.5.21 Provisions, Contingent Liabilities and Contingent Assets

(a) Provisions are recognized when:

(i) The Company 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.

(b) Contingent Liability is disclosed in case of:

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

(ii) A present obligation arising from past events, when no reliable estimate is possible.

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 recognized and measured as a provision.

(i) Contingent assets are not recognized in the standalone financial statements.

(ii) 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.

2.5.22 Commitments

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; and

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

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

2.5.23 Statement of Cash Flows

Standalone 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 net profit 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, unrealized foreign currency 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 Standalone Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.

3. Recent Accounting Developments

3.1 Law enacted but not effective

The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment benefits received Indian Parliament's approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently, on November 13, 2020, draft rules were published and stakeholders' suggestions were invited. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

3.2 New Standards/ Amendments notified

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rule as issued from time to time. There is no such notification which is applicable from April 01, 2024.

The primary objective of the Company's capital management is to maximize the shareholder value, safeguard the business continuity and to maintain strong capital base for investor, creditors and market confidence. For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. Further, The Company actively manages the capital base to cover risks inherent in its business and ensure maintenance of capital adequacy requirement as prescribed by the RBI. As against the minimum capital requirement of 15% as prescribed by the regulator, the Company is well capitalized and the capital adequacy ratio of the Company as at March 31, 2024 stood at 36.53% (March 31, 2023 - 53.97%) (Refer note 50). The Company has complied in full with all its externally imposed capital requirements over the reporting period.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, future plans and the requirements of the financial covenants. The funding requirements are met through loans and operating cash flows generated. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company's policy is to keep optimum gearing ratio as given below:

38. Financial Risk Management

The Company is mainly engaged in Investment and Finance Activities. The Company's principal financial liabilities comprise debt securities, borrowings (other than debt securities) and other payables. The main purpose of these financial liabilities is to finance and support Company's operations. The Company's principal financial assets include loans, term deposits with banks, Investments, cash and cash equivalents and receivables.

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

The Company is exposed to credit risk, market risk and liquidity risk. The Company's management oversees the management of these risks to ensure the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company's policies and risk objectives. The major risks are summarized below:

38.1 Credit Risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to financial loss. The Company is exposed to credit risk from its financing activities towards Loans to various customers. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each

customer. Credit risk has always been managed by the company through credit approvals, establish credit limits and continuous monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business.

Financial assets are written off when there is no reasonable expectation of recovery, such as a borrower failing to engage in a repayment plan with the Company. Where loans/interest have been written off, the Company continues to engage in enforcement activity to attempt to recover the loans/receivable due. Where recoveries are made, these are recognized as income in the standalone statement of profit and loss.

The Company measures the expected credit loss of other receivables/loans based on historical trend, available external and internal credit risk factors such as financial condition, ageing of accounts receivable etc., regulatory norms, industry practices and the business environment in which the entity operates. Refer note 2.5.2.5 and 2.5.2.6 for Impairment and Write-off and Expected Credit Loss (ECL) policy of the Company.

As at March 31, 2024, the company did not consider there to be any significant concentration of credit risk, which had not been adequately provided for. The carrying amount of the financial assets recorded in the standalone financial statements, grossed up for any allowances for losses, represents the maximum exposure to credit risk.

38.2 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and market price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans, investments, borrowings and term deposits with banks.

38.2.1 Interest Rate Risk

The interest rate risk exposure is mainly from changes in the interest rates. The interest rates are disclosed in the respective notes to the standalone financial statements of the Company. The breakup of the financial assets and liabilities on the basis of interest and non-interest nature is as under:

38.2.2 Foreign Currency Risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The company is exposed to foreign exchange risk arising from foreign currency borrowings [ECB]. Foreign currency risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the Company's functional currency (INR).

Foreign Currency Risk Management

The Company's risk management committee is responsible to frame, implement and monitor the risk management plan of the Company. The committee carry out risk assessment with regard to foreign exchange variances and suggests risk minimization procedures and implement the same.

Foreign Currency Risk Sensitivity Analysis

There is no risk of foreign fluctuation on the Company as the amount of loan is fixed in Indian rupees (INR) and hence, sensitive analysis is not given.

38.2.3 Market Price Risk

Market price risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices of equity shares and mutual funds units. In the case of the Company, market risk primarily impacts financial instruments such as Investment in Mutual Funds, Equity Shares etc. measured at fair value through profit or loss.

The Company exposure to market price risk arising from Investments held by the Company and is classified in the standalone financial statements at fair value through profit or loss. Categories of Investments held by the Company is given below:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Liquidity risk are managed through combination of strategies like managing tenors in line with asset liability management policy and adequate liquidity cover is maintained. The Company's treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by Senior management. Management monitors the Company liquidity position through rolling forecasts on the basis of expected cash flows.

(iv) There is no unhedged foreign currency exposure as at March 31, 2024 (March 31, 2023 - Nil)

(v) Detail of financing of parent Company products: Nil (March 31, 2023 - Nil)

(vi) Details of the Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded as per prudential exposure limits during the year: Nil (March 31, 2023 - Nil)

(vii) Unsecured advances: Gross loans and advances includes unsecured advances of Rs. 2,880.31 lakhs (March 31, 2023 - 2,927.25 lakhs). There are no advances secured against intangible assets.

(f) Registration obtained from financial sector/other regulators:

RBI: vide registration number B-10.00247

Ministry of Corporate Affairs: L65990RJ2016PLC054921

(g) Details of Penalties imposed by RBI and other regulators:

During the year ended March 31, 2024, BSE Limited had imposed penalty of Rs.0.20 lakhs on the Company for delay of 1 day in implementation of bonus issue. During the previous year ended March 31, 2023, BSE Limited had imposed penalty of Rs. 0.08 lakhs for delay of 4 days in filing Corporate Governance Report for quarter ended June 30, 2022.

(h) Ratings assigned by Credit Rating Agencies during the year: ACUITE BBB (STABLE) rating by Acuite Ratings and Research Limited for non-convertible debentures, long term instruments and bonds. The rating is same as was in the preceding year. Migration of ratings during the year: Nil

(i) Details of the material transactions entered by the Company with related parties and nature of the relationship as per the Indian Accounting Standard on 'Related Party Disclosures' (Ind AS 24) and remuneration to directors: Refer Note 41

(j) During the year, a) no prior period items occurred which has material impact on Standalone statement of profit and loss, b) the Company Implemented Ind AS as required by Ministry of Corporate Affairs and c) there were no circumstances in which revenue recognition has been postponed pending the resolution of significant uncertainties.

(k) Revenue Recognition - Refer note 2.5.1

(l) The Company has prepared the consolidated financial statements as it has two subsidiaries.

49 Other disclosures/information

49.1 Additional information required as per Schedule III of the Companies Act, 2013:

(i) Details of benami property held

No proceedings have been initiated or are pending against the Company as at March 31,2024 for holding benami property under the Benami Transactions (Prohibition) Act (45 of 1988), as amended and rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowed money from the banks and financial institutions (including NBFCs) against security of current assets of loan portfolio and term deposits with banks.

The quarterly/monthly statements of current assets for the financial year ended 31 March 2024, filed by the Company with banks and financial institutions are in agreement with books of accounts.

(iii) Wilful defaulter

The company is not declared wilful defaulter by any bank, financial institution or lender as at March 31,2024.

(iv) Relationship with struck off companies

There are no transactions made by the Company during the year with struck off companies as at March 31,2024.

(v) Compliance with number of layers of companies

The Company have complied with number of layers of companies as per the provisions of the Companies Act,2013.

(vi) Compliance with approved scheme(s) of arrangements

During the year, no scheme of arrangements in relation to the Company has been approved by the competent authority in terms of Section 232 to 237 of the Companies Act,2013.

(vii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are pending to be registered with the Registrar of Companies as on March 31,2024.

(viii) Utilisation of borrowed funds and share premium

As a part of normal lending business, the company grants loans and advances on the basis of security/guarantee provided by the Borrower/Co-borrower. These transactions are conducted after exercising proper due diligence.

Other than transactions described above, during the year, the Company has not advanced or lend or invested funds (either from the borrowed funds or share premium or any other sources or kind of funds) to any person or entity, including foreign entity (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (a) 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 (b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

The Company has not received any fund from any person or entity, including foreign entity (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall (a) 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 (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(ix) Corporate Social Responsibility (CSR)

The Company have spent Rs. 21.15 lakhs towards CSR activities during the year ended 31 March 2024 and there is no shortfall at the end of the year.

(x) Undisclosed income

The Company does not have any unrecorded transactions in the books of account which have been surrendered or disclosed as Income during the year in the tax assessment under the Income Tax Act, 1961.

(xi) Transactions in crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31, 2024.

(xii) Revaluation of property, plant & equipment and intangible asset

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the year ended March 31, 2024.

49.2 Other Statutory information

(i) There was no amount outstanding and due for transfer to the Investor Education and Protection Fund during the year ended March 31, 2024.

(ii) The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long-term contracts has been made in the books of accounts. The company has not entered into any derivative contract.

(iii) The Company has not received any whistleblower complaint during the year ended March 31, 2024.

(iv) There are no pending litigations as at March 31, 2024 having impact on the financial position of the Company.

(v) There are no outstanding dues (including interest) of 'Micro' and 'Small' Enterprises pursuant to Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED Act') as at March 31, 2024 (March 31, 2023 - Nil). Accordingly, no disclosures are required to be given under 'MSMED Act'.

(vi) There is no Core Investment Company within the group as defined in the regulations made by the Reserve Bank of India.

52. The Company is using accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software. Further, no instance of audit trail feature being tempered with has been noticed during the year in respect of the accounting software.

53. Figures for the previous year have been regrouped/reclassified wherever necessary to conform to the current year's presentation.

As per our report of even date attached

For TATTVAM & Co. For and on behalf of Board of Directors

Chartered Accountants

Firm Registration No. 015048N

Sagar Arora Mayank Pratap Singh Manoj Kumar Bhatt Kapil Garg

Partner Company Secretary Director Managing Director

Membership No. 520999 Membership No. A46666 DIN: 09452843 DIN: 01716987

Pankaj Gupta Gunjan Jain

Place: New Delhi Chief Executive Officer Chief Financial Officer

Date: 28 May 2024