Rights, preferences and restrictions attached to shares:

The Company has only one class of equity shares with voting rights (one vote per equity share). The distribution of dividend is in proportion to the number of equity shares held by the shareholders. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company has not issued any bonus shares or allotted any shares as fully paid up pursuant to contract(s) without payment being received in cash and there were no buy-backs or any securities that are convertible into equity shares. Accordingly, no further disclosures are made in this regard.

Statutory Reserve :

Pursuant to the requirements of section 45 - IC of the Reserve Bank of India Act, 1934 ("the RBI Act") the Company is required to transfer not less than 20% of the profit after tax before any dividend is declared to the statutory reserve. Accordingly, the Company has transferred Rs.2,164 Lakhs to the statutory reserve for the year ended March 31, 2023 (March 31,2022: Rs.44 Lakhs). The utilisation of this reserve fund is governed by the provisions of the Reserve Bank of India Act.

Securities Premium Account:

Securities Premium account represents premium on issue of equity shares. The amount received in excess of the par value of equity shares is recognised as securities premium. The securities premium will be utilised in accordance with the provisions of section 52 of Companies Act, 2013.

Shares options outstanding account:

The share options outstanding account is used to recognise the grant date fair value of options issued to employees under the Company's Employees stock option plan. The amounts recorded in share options outstanding account are transferred to securities premium upon exercise of stock options and transferred to general reserve on account of stock options not exercised by employees. (Also refer Note 25).

General Reserve:

This reserve represents balance transferred from Share Option Outstanding Account upon employee stock options that expired unexercised or upon forfeiture of options granted.

Retained earnings:

This is accretion of profits and represents surplus in statement of profit and loss.

Note 17 (b) - Corporate Social Responsibility Expenditure

Pursuant to the requirement of Section 135 of the Companies Act, 2013 and Rules made thereunder, the Company has spent the required amount towards CSR activities. These funds were primarily contributed to the corpus of implementing agency and utilised through out the year on CSR activities which are specified in Schedule VII of the Act.

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CEO of the Company. The Company being a NBFC-ND-SI-CIC (Core Investment Company) registered with the RBI under section 45-IA of the Reserve Bank of India Act, 1934, operates only in one Business Segment, accordingly it does not have any separate reportable Segments as per Indian Accounting Standard 108 "Operating Segments". The Company being Core Investment Company derives its revenue from operations from its investment in subsidiary. In addition to this, company also earns interest income from the fixed deposits placed with other banks which are disclosed under "Other Income".

NOTE 22 - EMPLOYEES BENEFiT PLANS Post Employment Benefit Plans Defined contribution plans

The Company makes the provident fund contributions for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the company is limited to the amount contributed and it has no further legal nor any contractual obligations.

Gratuity

The Gratuity scheme is a defined benefit plan, that provides For a lumpsum payment at the time of separation; based on scheme rules. The benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years.

(i) Risk Exposure

The Company is exposed to the following risks that affect the liabilities and cash flows,

1. Interest rates risk : the defined benefit obligation (DBO) calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

2. Demographic risks: this is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of these decrement on the DBO depends upon the combination of salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons Adverse Salary growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(x) Key Assumptions

One of the principal assumptions is the discount rate, which should be based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

Actuarial Assumptions:Salary Escalation:

In projecting the salary increases there are three factors to consider - first is inflation level leading to a general change in salary level. The other two are career progression of the employees & productivity gains for the organisation. Where appropriate the salary increases, a periodic salary experience study with the Company's data will be conducted as an input for the Company, when setting the assumption.

Demographic Assumptions:For Attrition / withdrawal

Withdrawal rates, both at early durations of service and near retirement date, not only have a significant impact on estimates of 'liability' and 'contributions' (more than of mortality in service) but are most difficult to estimate. The past may not be a guide to the future. Even if the past experience can be statistically analyzed and produce some meaningful rates, the future experience of withdrawals will depend on general economic conditions as also the particular conditions affecting the given employer's business. Furthermore, withdrawal rates differ significantly from scheme to scheme and within a scheme from year to year. We examine these rates and any other information available and use best possible judgment to cater to the long term nature of the actuarial estimates being carrying out.

The Company manages its capital to ensure its ability to continue as going concern while optmising the returns to stakeholders. The capital structure of the Company consists of equity. The Management of the Company reviews the capital structure of the Company on a annual basis. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditor and market confidence and to sustain future development and growth of its business.

Refer note 24 for the details on critical ratios.

The carrying amounts of trade payables, other receivables, cash and cash equivalent including other current bank balances and other liabilities are considered to be the same as their fair values, due to current and short term nature of such balances. For financial assets and liabilities that are measured at amortised cost, the carrying amounts approximate their fair values. All the above financial assets and liabilities are valued at level 3.

NOTE 23 (C) - FiNANCiAL RiSK MANAGEMENT OBJECTiVES

The Company's risk management is carried out by the Management under policies laid down by the Board of Directors. The Company's activities expose it to liquidity risk. The Management of the Company monitors the risk exposures on a periodical basis and reports to the Board of Directors on the risks that it monitors and policies implemented to mitigate risk exposures.

1. Foreign currency risk

The company undertakes no transaction in foreign currency; consequently no exposure to exchange fluctuation.

2. Interest rate risk

The Company's interest bearing financial assets are term deposits which earn interest at fixed bank deposit rate. Accordingly, the Company's income and operating cash flows are substantially insensitive of changes in market interest rates. The interest bearing financial assets are placed in term deposit which are maturing within twelve months to minimise the interest rate risk. The Company did not have any borrowings during the year and as at the year end.

3. Credit risk

The Company maintains exposure in cash and cash equivalents and term deposits with banks. The Company has a portfolio of investment with Bank which has secure credit ratings hence the risk is reduced.

4. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its obligations on time or at a reasonable price. liquidity analysis For non derivative financial liabilities-

The following table details the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

The Management considers that the carrying amount of financial assets and financial liabilities recognised in these financial statements approximate their fair values.

Mitigating Liquidity Risk

The Company maintains sufficient liquid assets to meet for working capital requirements or expansion requirements in the form of term deposits with banks which can be liquidated on demand. The Company's financial liabilities, consisting mainly of accrued expenses and other liabilities which are due within the next twelve months from the reporting date. The Company has sufficient funds to meet all maturing obligations.

5. Price Risk

Investments in Subsidiary are carried at cost, pursuant to the applicable accounting standard and carry no impact of price risk. The shares of the subsidiary are actively traded in the major recognised stock exchanges of India. There are no investments in mutual funds as at March 31,2023 and immediately preceding financial year ended March 31,2022.

25.2 Fair value of share options granted during the year

No share options were granted during the financial year ended March 31, 2023 and March 31, 2022. Options granted in earlier year were priced using Black and Scholes Model ('Model'). Vested ESOPs can be exercised within three years From their corresponding dates of vesting. ESOPs vested can be exercised between date of vesting and on or before option expiry date. The term of the option is assumed to be the sum of a) duration till vesting; and b) the midpoint of the remaining exercise period from date of vesting, in absence of historical exercise pattern. While the Company has been listed since 2016, the period of listing upto the Grant Dates is not commensurate with the expected term of the granted ESOPs. Accordingly, volatility of comparable companies have been considered for the purposes of valuation.

25.4 Share options exercised during the year

There are no shares excercised during the year ended March 31, 2023. Weighted average share price for the year ended March 31, 2022 is ' 200.93.

25.5 Share options outstanding at the end of the year

The share options outstanding at the end of the year had a weighted average exercise price of ' 385.05 (March 31, 2022: ' 390.78), and a weighted average remaining contractual life of 0.37 years (March 31, 2022: 0.55 years).

25.7 ESOP arrangement with subsidiary

With effect From February 1, 2017, the entity was demerged into Ujjivan Small Finance Bank Limited (USFB) resulting in the transfer of options From the employees of the Company to the employees of USFB (Subsidiary of the Company). As per Ind AS 102 Share-based Payment, stock options have to be fair valued on the grant date and expense has to be recognised over the vesting period. Pursuant to management decision, Impact of Ind AS 102 on account of options granted to the employees of subsidiary is treated as deemed investment in subsidiary in the Company's books.

During the year ended March 31, 2020, the USFB has approved an ESOP scheme and an Employee Share Purchase Scheme ('ESPS') for employees of USFB and its holding company, i.e., Ujjivan Financial Services Limited. Under ESOP 2019, total 628,782 options (March 31, 2022 - 601,561) were granted to the employees of the holding company to be vested over a period of 5 years and total 211,200 shares (March 31, 2022- 211,200) were purchased under ESPS 2019 scheme. Further, during the year ended March 31, 2022, two employees were transferred to the USFB to whom 264,441 ESOPs granted under the scheme. As per Ind AS 102 Share-based Payment, the fair value cost of the options for the period expired out of the vesting period and shares purchased were recognised in the statement of profit and loss and reimbursed to the subsidiary entity, i.e., USFB. As on March 31, 2023, towards remaining employees of the holding company, out of 364,341 options granted (March 31, 2022 - 337,120), 300,431 options are lapsed (March 31, 2022 - 282,176), 15,183 options were vested yet to be exercised (March 31, 2022 - 11,004) and 48,727 options were unvested (March 31, 2022 - 43,940).

NOTE 26 - RELATED PARTY DiSCLOSURETerms and Conditions of transactions with related parties:

The transactions with related parties are made in the ordinary course of business and the same is at arm's length. Outstanding balances at the year end are unsecured and interest free other than fixed deposits and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The Company has not recorded any impairment for receivables.

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

The Company did not have any overseas assets during and as at the year end (March 31,2022 - Nil).

J Disclosure on provisioning in the Balance Sheet

Provisions as per CIC Guidelines - As the Company is not engaged in the business of financing, it has not provided any loans/advances and therefore related compliance in relation to classification as standard asset, sub standard assets, doubtful and loss assets are not applicable.

The Company does not have any exposure to real estate sector, both direct and indirect.

K The Company has not obtained any Registrations / licenses / authorisations from other financial sector regulators and RBI has not levied any penalties on the Company during the year.

NOTE 28 - DiSCLOSURES RELATiNG TO SCALE BASED REGULATiONS APPLiCABLE TO CORE iNVESTMENT COMPANiES (CiC'S)

A The Company doesnot have any exposure to real estate sector, capital market, sectoral exposure and unhedged foreign currency exposure during the year. Investment in subsidiary is not considered for this purpose.

B The Company has not received any complaints from customers and from the Offices of Banking Ombudsman (OBOs) during the year.

D Related party disclosures - Refer note 26 for details.

E Divergence in asset classification and provisioning - There are no instances of divergence in asset classification and provisioning during the year.

F Breach of covenant - Not applicable to the Company, as the Company has not availed any loan availed / issued any debt securities.

NOTE 29 The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

NOTE 30 The Board of Directors of the Company and Ujjivan Small Finance Bank, the Subsidiary ("the Bank") in their respective meetings held on October 14, 2022 have approved a scheme of amalgamation of the Company with the Bank in terms of Sections 230 to 232 of the Companies Act, 2013. In terms of the said scheme, the Company will be amalgamated into and with the Bank and all its assets, liabilities, contracts, employees, licenses, records and approvals will be transferred to and will be deemed to have been transferred to and vested in the Bank, as a going concern, without any further act, instrument or deed, together with all its properties, assets, liabilities, rights, benefits and interest therein. All the Key Managerial Personnel, and other employees of the Company who are in employment as on the Effective Date shall become, and be deemed to have become, the staff and employees of the Bank, without any break or interruption in their services and on the same terms and conditions (and which are not less favourable than those) on which they are engaged by the Company as on the Effective Date. All proceedings by or against the Company shall continue by or against the Bank. The appointed date under the said Scheme is April 01, 2023 or such other date as may be approved by the NCLT. In consideration of the proposed merger, the Bank will allot to the shareholders of the Company as on the Record Date (to be fixed by the Board of the Bank), 116 (One hundred and sixteen) equity shares of the face value of Rs. 10/- each of the Bank, credited as fully paid-up, for every 10 (ten) equity shares of the face value of Rs. 10/- each fully paid-up held by such shareholders of the Company. The shares held by the Company in the Bank shall stand extinguished on the amalgamation taking effect. The RBI vide its letter dated February 01, 2023, has conveyed its "no-objection" to the said proposal for voluntary amalgamation of the Company with the Bank subject to NCLT and other regulatory approvals. Further, the Bank on March 09, 2023 has received the no-observation letters from the Stock Exchanges (NSE and BSE), based on which a joint application has been filed with the NCLT on March 29, 2023, by the Company and Bank. The Company is now awaiting the directions / orders from the Hon'ble NCLT, Bengaluru Bench.

NOTE 31

The Company does not hold any Benami Property which is either recorded or not recorded in the books of account and there are no proceedings initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, no disclosures are made in this regard.

NOTE 32 BORROWINGS FROM BANKS OR FINANCIAL INSTITUTIONS

The Company does not have any borrowings from banks or financial institutions on the basis of security of current assets. Accordingly, no disclosures are made in this regard.

NOTE 33 WILFUL DEFAULTER:

The Company did not have any borrowings during the year or as at the year end and the Company has not been declared as wilful defaulter by any bank or financial institution or Government or Government Authorities or other lender. Accordingly, no disclosures are made in this regard.

NOTE 34 RELATIONSHIp wITH STRUCK OFF COMpANIES

As per the information available with the Company, the Company did not have any transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956 except the following.

NOTE 35 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 36 There are no transactions that are not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

NOTE 37 TRANSACTIONS IN CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year. Accordingly, no further disclosures are made in this regard.

NOTE 38 The COVID-19, a global pandemic has affected the world economy over the last two years. The extent to which any new wave of COVID-19 will impact the Subsidiary's (Ujjivan Small Finance Bank Limited) operations will depend on ongoing as well as future developments, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether Government-mandated or elected by us.