d) Terms/rights attached to equity shares:

The Company has only one cLass of equity shares having a par vaLue of ' 2/- per share. Each hoLder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors and approved by the shareholders in the annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares wiU be entitled to receive remaining assets of the Company, after distribution of aU preferential amounts. The distribution wil be in proportion to the number of equity shares held by the shareholders.

Capital redemption reserve (CRR)

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

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

General reserve

General reserve is created through annual transfer of profits at a specified percentage in accordance with applicable regulations under the erstwhile Companies Act, 1956. Consequent to introduction of the Companies Act, 2013, the requirement to mandatory transfer specified percentage of net profits to General reserve has been withdrawn. However, the amount previously transferred to the General reserve can be utilized only in accordance with the specific requirements of the Companies Act, 2013.

Employee stock options outstanding

The Employee Stock Options outstanding represents amount of reserve created by recognition of compensation cost at grant date fair value on stock options vested but not exercised by employees and unvested stock options in the Statement of profit and Loss in respect of equity-settled share options granted to the eligible employees of the Company and its subsidiaries in pursuance of the Employee Stock Option Plan.

Retained earnings

Retained earnings or accumulated surplus represents total of a! profits retained since Company's inception. Retained earnings are credited with current year profits, reduced by losses, if any, dividend pay-outs, transfers to General reserve or any such other appropriations to specific reserve.

Other Equity

Description of the nature and purpose of Other Equity (refer Statement of Changes in Equity):

Statutory reserve as per Section 45-IC of the RBI Act, 1934

Statutory reserve represents reserve fund created pursuant to Section 45-IC of the RBI Act, 1934 through transfer of specified percentage of net profit every year before any dividend is declared. The reserve fund can be utilized only for limited purposes as specified by RBI from time to time and every such utilization shal be reported to the RBI within specified period of time from the date of such utilization.

On November 21, 2025, the Government of India notified the provisions of four Labour Codes - the Code on Wages, 2019, the Industrial. Relations Code, 2020, the Code on Social. Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively "new Labour Codes”) which consolidate 29 existing labour laws into a unified framework governing employee benefits during employment and post-employment.

In accordance with the new Labour Codes, the Company has currently estimated the incremental impact of Gratuity and Leave Encashment to be ' 117.33 crore (net of taxes ' 87.80 crore) on the basis of Actuarial Valuation. This has been presented under "Exceptional Items” in the standalone financial statements for the year ended March 31, 2026.

The Company continues to monitor developments on the Rules to be notified by regulatory authorities, including clarifications/additional guidance from authorities and will continue to assess the accounting implications, basis such developments/guidance.

In addition to the above, the Company has also recognised an amount of ' 22.72 crore in the Statement of Profit and Loss towards employee benefit expenses on account of the impact of the New Labour Code on eligible employees.

The incremental cost attributable to period post implementation of new Labour Codes has been included under Employee benefits expense for the year ended March 31, 2026.

34. Earning Per Share (EPS)

Basic EPS is calculated in accordance with Ind AS 33 'Earnings Per Share' by dividing the net profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares of the Company.

35. Employee Stock Option Plan (ESOP)

The Company had allotted 48,45,025 Equity shares (face vaLue of ' 2/- each) (adjusted for stock-spLit in the ratio of 5:1 in February 2013) under Employee Stock Option Scheme 2010 at par on February 3, 2011 to Mahindra and Mahindra Financial Services Limited Employees' Stock Option Trust ("the Trust") set up by the Company. The Trust holds these shares for the benefit of employees and aLLots equity shares to eligible employees on exercise of stock options as per the terms and conditions of ESOP scheme granted as per the recommendation of the Compensation Committee.

Pursuant to the Rights issue of one equity share for every equity share held as on record date, at an issue price of ' 50 per Equity Share (including a premium of ' 48 per Equity Share), made by the Company, 20,63,662 equity shares have been aLLotted to the Trust in respect of its rights entitlement on August 17, 2020. all the option holders (beneficiaries) under existing grants have automaticaLLy became entitLed to additional options at ' 50/-per option as rights adjustment and accordingly, the number of outstanding options stand augmented in the same ratio as the rights issue. ALL the terms and conditions appLicabLe to these additional options issued under rights issue have remained same as originaL grant.

Upon exercise of stock options, incLuding additional options issued as per Rights issue, under the schemes by eLigibLe empLoyees, the Trust had issued 72,67,963 equity shares to empLoyees up to March 31, 2026 (March 31, 2025: 70,25,425 equity shares), of which 2,42,538 equity shares (March 31, 2025: 4,75,271 equity shares) were issued during the current year. This has resulted in an increase in equity share capitaL by ' 0.05 crore for the year ended March 31, 2026 (March 31, 2025: ' 0.10 crore).

True-down of options:

The vesting of options under each tranche of individual grants under MMFSL RSU PLAN 2023 is subject to achievement of specified performance parameters at the Company Level, and at the individual level for the relevant financial year as approved by the Nomination and Remuneration Committee (NRC) of the Board of Directors. If actual performance in a relevant financial year against the specified parameters is lower than the defined thresholds, the granted options under a particular tranche would vest in proportion to the level of actual performance (true-down effect) and that proportion of options attributable to lower performance would be cancelled/lapsed with corresponding write-back of compensation expense recognized earlier in the statement of profit and loss of current year.

f) Determination of expected volatility

The measure of volatility used in the Black-Scholes option pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time.

The determination of expected volatility is based on historical volatility of the stock over the most recent period that is generally commensurate with the expected life of the option being valued. The period considered for volatility is adequate to represent a consistent trend in the price movements and the movements due to abnormal events are evened out.

Accordingly, since each vest has been considered as a separate grant, the model considers the volatility for periods, corresponding to the expected lives of different vests, prior to the grant date. Volatility has been calculated based on the daily closing market price of the Company's stock price on NSE over these years. Similar approach was followed in determination of expected volatility based on historical volatility for all the grants under the scheme.

g) Compensation cost measurement and accounting

In respect of stock options granted under Employee Stock Option Scheme 2010 and MMFSL RSU PLAN 2023, the accounting is done as per the requirements of Ind AS 102 - Share-based payment. Consequently, ' 15.82 crore (March 31, 2025: ' 7.25 crore) has been included under 'Employee Benefits Expense' as 'Share-based payment to employees' based on respective grant date fair value, after adjusting for reversals on account of options forfeited. The amount includes cost reimbursements (net of recoveries of ' 0.34 crore) to the holding Company of ' 2.35 crore (March 31, 2025: ' 1.68 crore) in respect of options granted to employees of the Company and excludes net recovery of ' 0.75 crore (March 31, 2025: ' 0.09 crore) from its and holding Company's subsidiaries for options granted to their employees.

36. Employee benefitsGeneral description of defined benefit plansGratuity

The Company provides for the gratuity, a defined benefit retirement pLan covering qualifying employees. The pLan provides for gratuity benefits that become payable to eligible employees on death while in service or on separation from employment after completion of the stipulated period under the Code on Social Security, 2020. The Company makes annual contribution to the Gratuity scheme administered by the Life Insurance Corporation of India, HDFC life and Kotak life insurance through its Gratuity fund.

Post retirement medical cover

The Company provides for post retirement medical cover to select grade of employees to cover the retiring employee and their spouse up to a specified age through Medidaim policy on which the premiums are paid by the Company. The eligibility of the employee for the benefit as wefl as the amount of medical cover purchased is determined by the grade of the employee at the time of retirement.

Through it's defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk

The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets underperform compared to this yield, this wifl create or increase a deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Interest rate risk

A decrease in government bond yields wifl increase plan liabilities, although this is expected to be partiafly offset by an increase in the value of the plan's investment in debt instruments.

Variability in withdrawal rates

If actual withdrawal rates are higher than assumed withdrawal rate assumption then the gratuity benefits wifl be paid earlier than expected. The impact of this wifl depend on whether the benefits are vested as at the resignation date.

Regulatory Risk

Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). There is a risk of change in the regulations requiring higher gratuity payments (e.g. raising the present ceiling of ' 20,00,000, raising accrual rate from 15/26 etc.).

Inflation risk

The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants wifl increase the plan's liability. The post retirement medical benefit obligation is sensitive to medical inflation and accordingly, an increase in medical inflation rate would increase the plan's liability.

Salary Risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level wifl increase the plan's liability.

Asset Liability Matching Risk

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generafly reduces ALM risk.

Concentration Risk

Plan is having a concentration risk as afl the assets are invested with the insurance Company and a default wifl wipe out afl the assets. Although probability of this is very Low.

Life expectancy

The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants, both during and after the employment. An increase in the life expectancy of the plan participants wifl increase the plan's liability.

If actual mortality rates are higher than assumed mortality rate assumption than the gratuity benefits wifl be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow wifl lead to an actuarial Loss or gain depending on the relative values of the assumed salary growth and discount rate.

The pLan assets have been primarily invested in government securities and corporate bonds.

The cost of the defined benefit plans and other long term benefits are determined using actuarial valuations. Actuarial valuations involve making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rate. Due to these complexity involved in the valuation it is highly sensitive to the changes in these assumptions. all assumptions are reviewed at each reporting date. The present vaLue of the defined benefit obligation and the reLated current service cost and pLanned service cost were measured using the projected unit cost method.

The Company's contribution to provident fund, superannuation fund and nationaL pension scheme aggregating to ' 77.13 crore (March 31, 2025: ' 80.67 crore) has been recognized in the Statement of profit and Loss under the head EmpLoyee benefits expense.

The Company has not funded its compensated absences Liability and the same continues to remain as unfunded as at March 31, 2026.

The estimate of future saLary increase takes into account inflation, seniority, promotion and other reLevant factors.

Discount rate is based on the prevailing market yieLds of Indian Government Bonds as at the baLance sheet date for the estimated term of the obligation.

Long Term Incentive Scheme

The Long-Term Incentive PLan is annuaLLy granted aLong with the performance cycLe at the end of the financiaL year and determined on the individual performance rating criteria, awarded LTIP wiLL vest equaLLy in 3 years.

The Company has not funded its Long term incentive pLan LiabiLity and the same continues to remain as unfunded

as at March 31, 2026.

Discount rate is based on the prevailing market yieLds of Indian Government Bonds as at the baLance sheet date

for the estimated term of the obligation.

37. Additional disclosures

i) During the financiaL years ended March 31, 2026 and March 31, 2025, the Company has not granted any Loans or advances in the nature of Loans to Promoters, Directors, KMPs and the reLated parties (as defined under the Companies Act, 2013), either severaLLy or jointLy with any other person (a) repayabLe on demand or (b) without specifying any terms or period of repayment.

ii) There is no Benami Property heLd by the Company and there is no proceeding 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

iii) Disclosure of transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

iv) There is no charges or satisfaction in relation to any debt/borrowings yet to be registered with ROC beyond the statutory period.

v) The Company has compLied with the number of Layers prescribed under cLause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

vi) Utilisation of Borrowed funds and share premium:

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

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

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

B) The Company has not received any fund from any person(s) or entity(ies), incLuding foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shaLL:

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

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

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

viii) There are no transactions which have not been recorded in the books of accounts and has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. ALso, there are no previously unrecorded income and related assets.

ix) A! the secured non-convertible debentures of the Company including those issued during the year ended March 31, 2026 are fuLLy secured by pari-passu charge on Chhatrapati Sambhaji Nagar office erstwhile "Aurangabad" (wherever applicable) and/or exclusive charge on present and/or future receivables under Loan contracts/Hire Purchase/Lease, owned Assets and book debts. Further, the Company in respect of secured listed non-convertible debt securities maintains 100% security cover or higher security cover as per the terms of Term Sheet/Offer document/Information Memorandum and/or Debenture Trust Deed, sufficient to discharge the principal amount and the interest thereon.

The asset cover available as on March 31, 2026 in respect of listed secured debt securities is 1.09 (March 31, 2025: 1.08).

The fresh aLLotment of equity shares through Rights Issue as stated above has resulted in an increase of equity share capitaL by ' 30.89 crores and securities premium reserve by ' 2,965.27 crores .ConsequentLy, the sharehoLding of the Parent Company (Mahindra & Mahindra Limited) had increased from 52.16% to 52.49% post aLLotment of fresh equity shares under rights issue.

The share issue expenses of ' 7.60 crores have been adjusted against securities premium reserve as per the accounting poLicy.

40. Capital management

The Company's capitaL management strategy is to effectiveLy determine, raise and depLoy capitaL so as to create vaLue for its sharehoLders. The same is done through a mix of either equity and/or convertibLe and/or combination of short term/Long term debt as may be appropriate.

The Company determines the amount of capitaL required on the basis of operations, capitaL expenditure and strategic investment pLans. The capitaL structure is monitored on the basis of net debt to equity and maturity profiLe of overaLL debt portfoLio.

The Company is subject to the capitaL adequacy requirements of the Reserve Bank of India (RBI). Under RBI's capitaL adequacy guideLines, the Company is required to maintain a capitaL adequacy ratio consisting of Tier I and Tier II CapitaL. The totaL of Tier II CapitaL at any point of time, shaLL not exceed 100 percent of Tier I CapitaL. The minimum capitaL ratio as prescribed by RBI guideLines and appLicabLe to the Company, consisting of Tier I and Tier II capitaL, shaLL not be Less than 15 percent of its aggregate risk weighted assets on-baLance sheet and of risk adjusted vaLue of off-baLance sheet.

The Company has compLied with aLL reguLatory requirements reLated to capitaL and capitaL adequacy ratios as prescribed by RBI.

39. Funds raised by issue of equity shares through Rights Issue

"Pursuant to authorization of further infusion of capital through Rights Issue by the Board of Directors of the Company at its meeting held on May 2, 2025, other resolutions passed on May 8, 2025 approving the issue size, rights entitlement ratio, fixing the issue price, fixing the record date and in accordance with the provisions of the Companies Act, 2013 and the appLicabLe RuLes prescribed thereunder, the Securities and Exchange Board of India (Issue of CapitaL and DiscLosure Requirements) ReguLations, 2018, as amended, the Company had issued 15,44,41,240 fuLLy paid-up equity shares of face vaLue of ' 2 each for cash at a price of ' 194 per equity share (incLuding a premium of ' 192 per equity share) aggregating to ' 2,996.16 crores on a rights basis to eLigibLe equity sharehoLders in the ratio of one equity share for every eight fuLLy paid-up equity share heLd on the record date, that is May 14, 2025. These equity shares were aLLotted on June 9, 2025. The Company has utiLized the entire proceeds (net of issue reLated expenses) from the above referred Rights Issue for the purposes as stated in its 'Letter of Offer'.

"Tier I Capital” means owned fund as reduced by investment in shares of other non-banking financiaL companies and in shares, debentures, bonds, outstanding Loans and advances incLuding hire purchase and Lease finance made to and deposits with subsidiaries and companies in the same group exceeding, in aggregate, ten per cent of the owned fund.

"Owned fund” means paid up equity capitaL, preference shares which are compuLsoriLy convertibLe into equity, free reserves, baLance in share premium account and capitaL reserves representing surpLus arising out of saLe proceeds of asset, excLuding reserves created by revaLuation of asset, as reduced by accumuLated Loss baLance, book vaLue of intangibLe assets and deferred revenue expenditure, if any. Free reserves incLudes quarterLy profit subject to reducing average dividend paid in the Last three years.

Further, as required under Reserve Bank of India (Non-Banking Financial. Companies - Prudential. Norms on Capital. Adequacy) Second Amendment Directions, 2026, vide RBI notification no. RBI/2025-26/226 DOR.CAP. REC.No.416/21.01.002/2025-26, the Company has reduced the amount of average dividend paid in the Last three years from Owned funds/Tier-1 capitaL in caLcuLation of capitaL adequacy ratio effective from current financiaL year.

“Tier II capital" includes the following -

(a) preference shares other than those which are compuLsoriLy convertibLe into equity;

(b) revaLuation reserves at discounted rate of fifty five percent;

(c) GeneraL provisions (incLuding that for Standard Assets) and Loss reserves to the extent these are not attributabLe to actuaL diminution in vaLue or identifiabLe potentiaL Loss in any specific asset and are avaiLabLe to meet unexpected Losses, to the extent of one and one fourth percent of risk weighted assets. 12 month expected credit Loss (ECL) aLLowances for financiaL instruments i.e. where the credit risk has not increased significantLy since initiaL recognition, shaLL be incLuded under generaL provisions and Loss reserves in Tier II capitaL within the Limits specified by extant reguLations. Lifetime ECL shaLL not be reckoned for reguLatory capitaL (numerator) whiLe it shaLL be reduced from the risk weighted assets.

(d) hybrid debt capitaL instruments; and

(e) subordinated debt to the extent the aggregate does not exceed Tier I capitaL.

Aggregate Risk Weighted Assets -

Under RBI GuideLines, degrees of credit risk expressed as percentage weightages have been assigned to each of the on-baLance sheet assets and off- baLance sheet assets. Hence, the vaLue of each of the on-baLance sheet assets and off- baLance sheet assets requires to be muLtipLied by the reLevant risk weights to arrive at risk adjusted vaLue of assets. The aggregate shaLL be taken into account for reckoning the minimum capitaL ratio.

41. LeasesI) In the cases where assets are taken on operating lease (as lessee) -

As a Lessee, the Company's Lease asset cLass primariLy consist of buiLdings or part thereof taken on Lease for office premises, certain IT equipments and generaL purpose office equipments used for operating activities.

The foLLowing is the summary of practicaL expedients appLied as aLLowed under Ind AS 116.

a) AvaiLed the exemption of not to recognize ROU assets and LiabiLities for Leases of Low vaLue assets and Leases with Less than 12 months (short-term Lease) of Lease term on the date of initiaL appLication as at 1 ApriL 2019 and thereafter;

b) ExcLuded the initiaL direct costs from the measurement of the Right-of-use asset at the date of initiaL appLication as at 1 ApriL 2019 and thereafter;

IV) There has been a modification in the monthly Lease rentaLs for certain Lease contracts post aboLishment of Compensation cess under GST 2.0. The modification doesn't resuLt in separate Lease under IndAS 116. The revised Lease rentaLs are recognised prospectiveLy over the remaining Lease term of the said contracts.

42. Frauds reported during the year

There were 54 cases (March 31, 2025: 208 cases) of frauds amounting to ' 6.61 crore (March 31, 2025: ' 6.33 crore) reported during the year Out of the fraud cases reported during the current year, the Company has recovered an amount of ' 2.14 crore (March 31, 2025: ' 2.26 crore) and has initiated appropriate LegaL actions against the individuaLs invoLved. The cLaims for the un-recovered Losses have been Lodged with the insurance companies on merit basis.

The Company's pending Litigations comprise of cLaims against the Company primariLy by the customers and proceedings pending with Income Tax, Service tax, SaLes tax/VAT, Goods and Services Tax and other authorities. The Company has reviewed aLL its pending Litigations and proceedings and has adequateLy provided for where provisions are required and discLosed the contingent LiabiLities where appLicabLe, in its financiaL statements. The amount of provisions/contingent LiabiLities is based on management's estimate, and no significant LiabiLity is expected to arise out of the same.

The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial, performance and financial, position regarding the amounts discLosed above, it is not practicable to discLose information on the possibility of any reimbursement as it is determinate onLy on the occurrence of uncertain future events.

44. Transfer of financial assetsa) Transferred financial assets that are not derecognized in their entirety - Securitization transactions

The Company has transferred certain pooLs of fixed rate Loan receivabLes backed by underlying assets in the form of tractors, vehicLes, equipments etc. by entering in to securitization transactions with the SpeciaL Purpose VehicLe Trusts ("SPV Trust") sponsored by CommerciaL banks for consideration received in cash at the inception of the transaction.

The Company, being Originator of these Loan receivabLes, aLso acts as Servicer with a responsibiLity of coLLection of receivabLes from its borrowers and depositing the same in CoLLection and Pay-out Account maintained by the SPV Trust for making scheduLed pay-outs to the investors in Pass Through Certificates (PTCs) issued by the SPV Trust. These securitization transactions aLso requires the Company to provide for first Loss credit enhancement in various forms, such as corporate guarantee, cash coLLateraL, subscription to subordinated PTCs as credit support in the event of shortfaLL in coLLections from underLying Loan contracts. By virtue of existence of credit enhancement, the Company is exposed to credit risk, being the expected Losses that wiLL be incurred on the transferred Loan receivabLes to the extent of the credit enhancement provided.

In view of the above, the Company has retained substantiaLLy aLL the risks and rewards of ownership of the financiaL asset and thereby does not meet the de-recognition criteria as set out in Ind AS 109. Consideration received in this transaction is presented as "Associated LiabiLity reLated to Securitization transactions" under Note no.17.

b) Transferred financial assets that are not derecognized in their entirety - Assignment Deals

During the previous year ended March 31, 2025, the Company had soLd Loans and advances measured at amortized cost as per assignment deaLs undertaken by the Company. As per the terms of these deaLs, since substantiaL risk and reward reLated to these assets were transferred to the buyer, the assets have been derecognized from the Company's baLance sheet to the extent of share of assignee.

The management has evaLuated the impact of assignment deaLs done during the year for its business modeL. Based on the future business pLans, the Company's business modeL remains to hoLd the assets for coLLecting contractuaL cash flows.

There was no such direct assignment/transfer of stressed Loans to Asset Reconstruction Company (ARC) during the previous year ended March 31, 2025.

45. Corporate Social Responsibility (CSR)

As per Section 135 of the the Companies Act, 2013, the Company is required to spend 2% of its average Net Profit of the immediateLy three preceding financiaL years on CSR.

The Company's CSR mission aims to activeLy contribute to the socio-economic deveLopment of communities, enabLing individuaLs to partake in and derive benefits from the ongoing socio-economic progress. The Company is dedicated to integrating economicaLLy, physicaLLy, and sociaLLy chaLLenged groups into mainstream society through its CSR initiatives.

The CSR activities of the Company shaLL incLude, but not Limited to any or aLL of the sectors/activities as may be prescribed by ScheduLe VII of the Companies Act, 2013 amended from time to time. Further, the Company reviews the sectors/activities from time to time and make additions/deLetions/cLarifications to the above sectors/ activities.

During the year ended March 31, 2026, the Company has incurred an expenditure of ' 47.78 crore (March 31, 2025: ' 34.10 crore) towards CSR activities which incLudes contribution/donations made to the trusts which are engaged in activities prescribed under section 135 of the Companies Act, 2013 read with Schedule VII to the said Act and expense of ' 0.48 crore (March 31, 2025: ' 0.51 crore) towards the CSR activities undertaken by the Company.

Detail of amount spent towards CSR activities:

a) Gross amount required to be spent by the Company during the year is ' 47.75 crore (March 31, 2025: ' 34.58 crore).

b) Amount approved by the Board to be spent during the year: ' 47.75 crore (March 31, 2025: ' 34.58 crore).

The said in-principLe approvaL is subject to further evaluation to be carried out by the Committee of Independent Directors and Audit Committee of the Board and necessary recommendations to be made by them in accordance with appLicabLe Laws and reguLatory requirements.

47 The Company has a process whereby periodicaLLy aLL Long term contracts (incLuding derivative 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 (incLuding derivative contracts) has been made in the books of accounts.

e) Nature of CSR activities: Contributions/donations made to the trusts which are engaged in activities prescribed under section 135 of the Companies Act, 2013 read with Schedule VII to the said Act and CSR activities undertaken by the Company.

f) Provision made with respect to a liability already incurred by entering into a contractual obligation: Nil

46 The Board of Directors of the Company, at their meeting held on January 28, 2026, has accorded its in-principle approval for evaluating the proposal for consolidation including Scheme of merger by absorption of Mahindra Rural Housing Finance Limited ("MRHFL'), a 98.43% owned subsidiary of the Company with the Company and authorised the management to appoint various consuLtants, advisors and intermediaries for the purpose.

The financial, risks are managed in accordance with the Company's risk management poLicy which has been approved by its Board of Directors.

Board of Directors of the Company have established Asset and Liability Management Committee (ALCO), which is responsible for developing and monitoring risk management policies for its business. The Company's financial services business is exposed to high credit risk given the unbanked rural customer base and diminishing value of collateral The credit risk is managed through credit norms established based on historical experience.

49.1 Market Risk

Market risk is the risk that the fair value or future cash flows of financial instruments wiU. fluctuate due to changes in market variables such as interest rates, foreign exchange rates, etc. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while maximizing the return.

a) Pricing Risk

The Company's Investments in Commercial Papers, Certificate of Deposits with Banks and Mutual Funds are exposed to pricing risk. A 5 percent increase in market price would increase profit before tax by approximately ' 41.60 crore (March 31, 2025: ' 150.11 crore). A similar percentage decrease would have resulted equivalent opposite impact.

b) Currency Risk

Currency Risk is the risk that the value of a financial instrument wifl fluctuate due to changes in foreign exchange rates. Foreign currency risk arise majofly on account of foreign currency borrowings. The Company's foreign currency exposures are managed in accordance with its derivative Risk Management Policy which has been approved by its Board of Directors. The Company manages its foreign currency risk by entering into forward contract, cross currency swaps, principal and interest rate swaps. Other derivative Instruments may be used if deemed appropriate.

Hedge Accounting - Forwards & Swaps

Contracts that meet the requirements for hedge accounting are accounted as per the hedge accounting requirements of Financial Instruments.

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item, and so a qualitative and quantitative assessment of effectiveness is performed. Hedge effectiveness for al hedges are 100%.

The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

c) Interest Rate Risk

The Company uses a mix of cash and borrowings to manage the Liquidity & fund requirements of its day-to-day operations. Further, certain interest bearing liabilities carry variable interest rates.

Interest Rate risk on variable rate borrowings is managed by way of interest rate swaps, wherever necessary. Interest Rate sensitivity

The sensitivity analysis below have been determined based on exposure to interest rate for both derivative and non-derivative instruments at the end of reporting period. For floating rate liabilities, analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year

The Throwing table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected with afl other variables held constant, the Company's profit before tax is affected through the impact on floating rate borrowings, as foflows:

49.2 Credit Risk Management

Credit risk is the risk that the Company wifl incur a Loss because its customers fail to discharge their contractual obligations. The Company has a comprehensive framework for monitoring credit quality of afl its portfolios under respective business verticals based on Days past due. The customer repayment and portfolio is tracked regularly and required steps for recovery are taken through foflow ups and legal recourse.

The Credit quaLity of the Loans is monitored concurrently. Since the Company is primarily into retail. Lending business, there is no significant credit risk of any individual customer that may impact the Company adverseLy, and hence the Company has caLcuLated its ECL aLLowances on a coLLective basis.

ii) Inputs considered in the ECL model

In assessing the impairment of financiaL Loans under Expected Credit Loss (ECL) ModeL, the assets have been cLassified into three stages. The three stages reflect the generaL pattern of credit deterioration of a financiaL instrument. The differences in accounting between stages, reLate to the recognition of expected credit Losses and the measurement of interest income.

The Company categorizes Loan assets (except Trade advances) into stages primariLy based on the Days Past Due status.

Stage 1: 0-30 days past due

Stage 2: 31- 90 days past due

Stage 3: More than 90 days"

The Company categorizes Trade advances into stages primariLy based on the Days Past Due status.

Stage 1: 0-60 days past due

Stage 2: 61- 90 days past due

Stage 3: More than 90 days"

The ECL estimates are forward Looking and incLude probabiLity weighted outcomes. A macroeconomic overLay is appLied to the observed defauLt rate (ODR) considering portfoLio specific macroeconomic factors that affect the ProbabiLity of DefauLt (PD) due to underLying economic conditions of the country.

The Company has computed expected credit Losses for Trade Advance PortfoLio based on historicaL movement data, capturing transitions between stages and Loss on historicaLLy written off unrecovered amounts from deaLers. A month on month Data AnaLysis and Transition Matrix is deveLoped based on historicaL movement data capturing transitions between stages. The transition probabiLities are used to compute Through The CycLe (TTC) PDs.

For BiLL discounting, as the average portfoLio Lifetime is 90 days, month on month flow rate anaLysis is undertaken on the basis of DPD buckets. HistoricaL PDs are caLcuLated using the average inter-bucket flow rates.

For Leasing portfoLio comprising of Operating and Finance Lease, the Company uses ECL coverage of Industry Peers in simiLar business Line, considering Limited history of coLLection and Loss data for the compLeted Life cycLe for these portfoLios which is needed for determining PD and LGD parameters for computation of ECL aLLowance."

iii) Definition of default

The Company considers a financiaL asset to be in ""defauLt"" and therefore Stage 3 (credit impaired) for ECL caLcuLations when the borrower account becomes more than 90 days past due on its contractuaL payments.

Since the Company's portfoLio predominancy incLudes retaiL vehicLe Loan portfoLio with around 3.5 miLLion Loan accounts making it difficuLt to define defauLt at an individuaL Loan account, the Company has considered the event of defauLt when overdue is more than 90 days past due. The same is aLso in Line with the reguLator's definition of defauLt, when overdue is more than 90 days past due.

iv) Exposure at default

"Exposure at DefauLt" (EAD) represents the gross exposure baLance when defauLt had occurred. EAD is subject to impairment caLcuLation for Stage 3 assets.

Aggregate portfoLio (outstanding exposure) on the BaLance sheet date is considered for caLcuLation of ECL on Stage 1 assets.

Overdue Interest pLus overdue PrincipaL and Future PrincipaL for respective future years is considered for caLcuLation of ECL on Stage 2 assets

v) Estimations and assumptions considered in the ECL model

The Company has made foLLowing assumptions in the ECL ModeL:

a) Loss Given Default (LGD):

LGD represents expected Losses on the EAD given that the event of defauLt had occurred, considering the time vaLue of money on recoveries determined based on appropriate discount rate. It is an estimate of the Loss from a transaction given that a defauLt had occurred.

Wherever historicaL data is avaiLabLe, the workout period based LGD methodoLogy is used for deveLoping the LGD modeL, which invoLves anaLysing the historicaL recoveries and actuaL Losses incurred post defauLt. The workout period is caLcuLated on the recovery percentage of cLosed pooL of Loan contracts and is appLied on Live pooL of contracts to consider cases which have survived the workout period. In the absence of sufficient historicaL data, reguLatory LGDs are Leveraged, or peer benchmarks are used as proxies.

Under the Workout - period based LGD approach, defauLted accounts are identified in Line with the PD definition, and recoveries are tracked from the first date of defauLt to ensure the fuLL Loss cycLe is captured. A recovery period (or recovery threshoLd) is estabLished based on the observed recovery curve of cLosed accounts, representing the point beyond which further recoveries are remote or minimaL.

LGD popuLation incLude aLL cLosed accounts and onLy those Live accounts that have compLeted this recovery window impLying further recoveries are remote/minimaL. Recoveries are discounted back to the defauLt date using the interest rate of the respective Loan account and adjusted for reasonabLe estimate of recovery costs, and the reaLized LGD is caLcuLated as the proportion of exposure at defauLt.

For caLcuLating LGD, the Company considers historicaL data set of impaired Loans for 8 years. DefauLted Loan accounts which are open but compLeted the recovery period (Loans surviving workout period) and aLL the cLosed defauLt accounts are considered. ActuaL cash flows pertaining to this portfoLio from the first defauLt date to the cut off date are then discounted at Loan EIR rate for arriving at this Loss rate.

In computation of LGD for BiLL discounting portfolio, the historical data for 5 years is considered. For Trade advance portfolio, the LGD has been determined using a practical and data-driven approach where historically written off unrecovered amount has been considered as per the Technical Write off policy, regardless of when the loans were classified as defaulted.

b) Probability of Default (PD)

a. It is an estimate of likelihood or risk of default occurring over a particular time horizon.

b. The measurement of risk of defaults is computed on homogenous portfolios, generaLLy by nature of loans, underlying collateral, and borrower profiles. The default risk is assessed using PD (probability of default) derived from past behavioural trends of default across the identified homogenous portfolios. These past trends factor in the past customer behavioural trends, credit transition probabilities and macroeconomic conditions. The assessed PDs are then aligned considering future economic conditions that are determined to have a bearing on ECL.

c. The time period considered for TTC PD is 5 years rowing window as per BASEL norms.

d. For Stage 1 assets, 12 months PD is considered which represents default events that are possible within

12 months after the reporting date.

e. For Stage 2 assets , life time PD is considered which represents default events that are possible over the expected Life/tenor of the financial instrument. PD is applied on Stage 1 and Stage 2 assets on a portfolio basis;

f For Stage 3 assets, PD is always at 100% as these are impaired assets.

g. The Company has further segregated Stage 1 and Stage 2 portfolio into 1A and 1B and 2A and 2B respectively.

• 1A comprises of performing loan accounts.

• 1B comprises of the cohort which is impaired in the past but after impairment the entire overdue is not fully recovered.

• 2A comprises of those loans which are in Stage 2 categorised as SICR

• 2B comprises of stage 2 loans which are impaired in the past but after impairment the entire overdue

is not fuLLy recovered."

The Flow-Rate Approach (FRA) was applied for BiLLs Discounting to estimate the Through-The-CycLe (TTC) Probability of Default (PD) since these are short tenure loans and the average tenure is 3-6 months. This method involves analyzing the transitions of accounts between different delinquency buckets over time. The process uses historical data to compute transition rates between these buckets, which are then used to estimate default probabilities. For BiLL discounting PD computation, the historical data for 5 years has been considered.

For Trade advance accounts, a month on month Data Analysis and Transition Matrix is developed based on historical movement data capturing transitions between stages (e.g., Performing ^ Underperforming Default). The transition probabilities are used to compute Through The Cycle (TTC) PDs."

(vi) Measurement of ECL

The assessment of credit risk and estimation of ECL are unbiased and probability weighted.

ECL on on-book exposure/portfolio:

It incorporates al information that is relevant including information about past events, current conditions and reasonable forecasts of future events and economic conditions at the reporting date. In addition, the estimation of ECL takes into account the time value of money. Forward looking economic scenarios determined with reference to external forecasts of economic parameters that have demonstrated a linkage to the performance of respective portfolios over a period of time have been applied to determine impact of most relevant macroeconomic variables (MEVs) through forward-looking adjustment to derive TTC PDs.

ECL aLLowance on Stage 1 assets = Aggregate portfolio (exposure) on the Balance sheet date for Stage 1 multiplied by PD for Stage 1 and LGD.

ECL aLLowance on Stage 2 assets = Overdue Interest and Principal and Future Principal for respective future years multiplied by Marginal PDs for respective years and LGD percentage.

ECL aLLowance on Stage 3 assets = Gross exposure at reporting date multiplied by LGD.

Interest income on Stage 3 assets is recognized at an amount that is attributable to the net carrying value or net recoverable value of the impaired asset.

Recoverable Stage 3 Income = Interest income accrued at contractual rate x(1-aLLowance rate)

Where: (1-aLLowance rate) is the recovery rate, representing the portion of the income expected to be coLLected from the impaired asset.

ECL on Undrawn loan commitments:

ECL on the amount of undrawn loan commitments is calculated by applying the Stage 1 aLLowance rate of the respective portfolio.

ECL on Lease business portfolio:

The customer segment catered under leasing business consist of employees of corporates (Employee Lease Programs) and B2B segment which includes business entities, firms, trusts and societies, fleet operators, commercial vehicles, construction equipment etc.

Since the Lease business comprising Operating and Finance lease is relatively a new line of business, there is limited history of coLLection and Loss data for the completed life cycle for these portfolios which is needed for determining PD and LGD parameters for computation of ECL aLLowance

In view of the above, the Company has adopted Industry level benchmark, i.e. ECL coverage rate, for estimating ECL aLLowance on operating and finance lease portfolio considering the similarities in products offered, customer segments catered and average tenure of lease contracts.

ECL on Investments:

Expected Credit Loss (ECL) framework is tailored to the Company's diverse investment portfolio. The Company applies a structured ECL approach to aLL investment instruments held as part of statutory requirement, coLLateraL assets heLd under securitization transactions, Liquidity pooL of investments spread across muLtipLe instruments. These investments typicaLLy cover instruments Like Government Securities (G-Secs), Bonds, Commercial Papers (CPs), and Certificates of Deposit (CDs), Term deposits with Banks and Pass-Through Certificates (PTCs) under securitization transactions. These investments are categorized as financial assets measured either at amortized cost or fair vaLue through profit or Loss (FVTPL) or fair vaLue through other comprehensive income (FVOCI) as per Ind AS 109 depending upon the nature and purpose for which these are heLd within the business modeL (to receive reguLar/periodic cash flows and to hoLd till maturity or as avaiLabLe for saLe/reaLization when needed).

i) Investments carried at amortized cost - Government Securities, Debt instruments and Fixed Deposits with Banks: ALL these financial assets are heLd within the business modeL for coLLecting the contractual cash flows as per the contractual terms that give rise to cash flows on specified dates that are soLeLy payment of principal and interest (SPPI) on the principal amount outstanding.

No ECL has been appLied on these instruments as there was no history of Loss or deLay in servicing of interest/ repayments. The Company does not expect any Loss or deLay in interest/redemption servicing in future."

ii) Investments carried at FVTPL and FVOCI - MutuaL fund units, G-Secs, Bonds, CP, and CD as part of Liquidity pooL: Investments in above referred instruments are measured at fair vaLue through profit and Loss (FVTPL) or other comprehensive income (FVOCI) based on their designation at inception at instrument LeveL.

As required under Ind AS 109, the investment instruments under FVTPL category are fair vaLued to reflect such investments at current market price with corresponding gains/Losses recognized in the statement of profit and Loss. ECL is not appLicabLe on these instruments.

The investment instruments under FVOCI category are fair vaLued through other comprehensive income, thereby these investments reflect fair market value at each reporting date. Further, FVOCI category investment instruments are subject to ECL as per Ind AS 109. Since there was no history of Loss or delay in servicing of interest/repayments and the Company does not expect Loss, no ECL provision is created on these investment instruments.

iii) Pass through Certificates (PTCs):

The creditworthiness of the underlying loan pool is assessed using historical performance data, default rates, and recovery trends.

Insights from these evaluations guide the classification and risk provisioning of PTC investments.

Stage Classification:

Stage 1: Investments with Low credit risk, requiring computation of 12-month ECL.

Stage 2: Investments with a significant increase in credit risk, necessitating Lifetime ECL.

Stage 3: DefauLted investments, for which Lifetime ECL is caLcuLated with eLevated provisioning requirements. ECL Estimation Metrics:

Probability of Default (PD): Based on historicaL data and forward-Looking macroeconomic factors.

Loss Given Default (LGD): Reflecting recovery rates and coLLateraL quaLity.

Exposure at Default (EAD): The totaL vaLue exposed to credit risk.

Time Value Adjustment: Future ECL amounts are discounted to present vaLue using the effective interest rate, ensuring accurate reflection of economic impacts.

iv) Others - Equity investments in subsidiary companies/JVs/Associates:

Equity investments in subsidiary companies/JVs/Associates are not subject to impairment under Ind AS 109. These are assessed for impairment as per Ind AS 36."

v) ECL on Other Financial Assets:

MMFSL has SimpLified Approach to Expected Credit Loss (ECL) under Ind AS 109 for other financiaL assets that invoLve credit risk. This approach is considered suitabLe for as receivabLes portfoLios as ageing and historicaL recovery trends are the primary drivers of credit risk assessment. These assets incLude receivabLes, Insurance CLaims, ProfessionaL Charges, Interest ReceivabLes (Interest accrued but not yet received), Brokerage/incentive receivabLes etc.

The caLcuLation of Lifetime ECL is based on historicaL coverage rates which incorporates ProbabiLity of DefauLt (PD) and Loss Given DefauLt (LGD). The coverage rate is used to estimate the credit Loss for each aging bucket, avoiding the need to compute PD and LGD separateLy.

ReceivabLes Outstanding < 90 DPD: A specific coverage rate is appLied based on historicaL recovery patterns from retaiL vehicLe Loan portfoLio which is the Largest portfoLio for MMFSL and reflects Long term trends.

ReceivabLes Outstanding > 90 DPD: 100% provision is created, assuming aLL receivabLes aged beyond 90 days are fuLLy uncoLLectibLe based on historicaL trends.

(vii) Forward Looking adjustments

The HistoricaL PDs are converted into forward Looking Point-in-Time PDs using statisticaL modeL incorporating the forward Looking economic outLook, as required by Ind AS 109.

The macroeconomic variabLes considered by the Company are robust reflections of the state of economy which resuLt into systematic risk for the respective product categories.

AdditionaLLy, three different scenarios (Base, Best, Worst) with appropriate weights for probabiLity outcome have been considered for ECL caLcuLation.

(viii) Assessment of significant increase in credit risk

When determining whether the credit risk has increased significantLy since initiaL recognition, the Company considers both quantitative and quaLitative information and anaLysis based on the Company's historicaL experience, incLuding forward-Looking information. As per Ind AS 109, Loans are required to be moved from Stage 1 to Stage 2 if and onLy if they have been the subject of a SICR. A SICR occurs when there has been a significant increase in the risk of a defauLt occurring over the expected Life of a financiaL instrument. In Line with BaseL guidance on ECL, the definition of defauLt and the convention for counting days past due adopted for accounting purposes wiLL be guided by the definition used for reguLatory purposes The Company considers reasonabLe and supportabLe information that is reLevant and avaiLabLe without undue cost and effort. The Company's accounting poLicy is not to use the practicaL expedient that the financiaL assets with 'Low' credit risk at the reporting date are deemed not to have had a significant increase in credit risk (SICR). As a resuLt, the Company monitors aLL financiaL assets and Loan commitments that are subject to impairment for SICR.

As a part of the quaLitative assessment of whether a customer is in defauLt, the Company aLso considers a variety of instances that may indicate unLikeLiness to pay. In such instances, the Company treats the customer at defauLt and therefore assesses such Loans as Stage 3 for ECL caLcuLations. Such quaLitative factors incLude:

i. A Stage 3 customer having other Loans which are in Stage 1 or 2.

ii. Primary Exposure of Co - appLicant of a Stage 3 customer/customer group which are in Stage 1 or 2.

iii. Not to consider UncLeared cheques as on reporting date for outstanding DPD caLcuLation for retaiL vehicLe Loans

iv. RetaiL vehicLe Loans, where asset has been repossessed.

v. Cases where Company suspects fraud and LegaL proceedings are initiated.

vi. SME Loans where the Company has resorted to its rights under the SARFAESI Act."

The Company reguLarLy reviews it's ECL modeL based on actuaL Loss experience and update the parameters used for ECL caLcuLations.

(ix) Policy for write off of Loan Assets

The gross carrying amount of a financiaL asset is written off when there is no reaListic prospect of further recovery. This is generaLLy the case when the Company determines that the debtor does not have assets or sources of income that couLd generate sufficient cash flows to repay the amounts subject to the write- off. However, financiaL assets that are written off couLd stiLL be subject to enforcement activities under the Company's recovery procedures, taking into account LegaL advice where appropriate. Any recoveries made from written off assets are netted off against the amount of financiaL assets written off during the year under "Bad debts and write offs" forming part of "Impairment on financiaL instruments" in Statement of profit and Loss.

(x) Inputs to the model

a. Observed DefauLt Rates (ODRs) over past 5 years roLLing window as per BASEL norms for each product category.

b. Macro economic variabLes provided by Economist InteLLigence Unit (EIU)#

c. 27 MEVs (as per List #) used in the modeL based on R² above the Company defined threshoLd representing LeveL of reLevance/fitment out of 61 shortListed MEVs considered as the key indicators having reLevance to Company's business portfoLios.

# The Economist InteLLigence Unit (EIU) is the research and anaLysis division of the Economist Group, providing forecasting, macro-economic anaLysis and advisory services through research and anaLysis, such as monthLy country reports, five-year country economic forecasts, country risk service reports, and industry reports."

Model process

1. OLS Regression Methodology:

The Ordinary Least Square (OLS) regression approach begins with the development of an initiaL macroeconomic variable (MEV) framework, where lagged variables and appropriate transformations are applied to capture delayed and non-linear relationships. Standard regression assumptions are then tested to ensure model validity and statistical robustness. Three tests are carried out: Correlation, Stationarity and Directionality. Final set of MEVs are selected for each of the product categories out of shortlisted MEVs based on explanatory power (R¹ above the Company defined threshold representing level of relevance/fitment) and consistency with recent index trends, ensuring both statistical strength and economic interpretabiUty. This approach is considered for retail vehicle loan portfolio.

Maximum Exposure to credit Risk

The maximum exposure to credit risk of Loans and investment securities is their carrying amount. The maximum exposure is before considering the effect of mitigation through collateral.

Narrative Description of Collateral

Collateral primarily include vehicles purchased by retail loan customers and machinery & property in case of SME customers. The financial investments are secured by way of a first ranking pari-passu and charge created by way of hypothecation on the receivables of the other Company.

Quantitative Information of Collateral

The Company monitors its exposure to loan portfolio using the Loan To Value (LTV) ratio, which is calculated as the ratio of the gross amount of the loan to the value of the coU.ateral The value of the collateral for Retail loans is derived by writing down the asset cost at origination by 20% p.a on reducing balance basis. And the value of the collateral of Stage 3 Retail loans is based on the Indian Blue Book value for the particular asset. The value of collateral of SME loans is based on fair market value of the coLLateraLs heLd.

Valuation methodologies of financial instruments not measured at fair value

BeLow are the methodologies and assumptions used to determine fair vaLues for the above financial instruments which are not recorded and measured at fair value in the Company's financial statements. These fair values were calculated for disclosure purposes only.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalent, trade receivables, balances other than cash and cash equivalents, term deposits and trade payables. Further, such financial assets and financial liabilities are disclosed at Level 1 fair value.

Long-term financial assets and liabilities

For other long term financial asset and liabilities like lease liabilities, the fair value are estimated by discounted cash flow models based on contractual cash flows, and are disclosed as Level 3 fair value.

Loans and advances to customers

The fair values of loans and advances are estimated by discounted cash flow models based on contractual cash flows using actual yields.

Financial Investments

For Government Securities and bonds, the quoted market price as on date of reporting is considered for fair value computations. Where such price is not available, quoted market price of similar instruments as on date of reporting is considered.

Borrowings other than deposits from public

The fair value of borrowings is estimated by a discounted cash flow model incorporating interest rate estimates from market-observable data such as secondary prices for its traded debt itself

Deposits from public

The fair value of deposits received from public is estimated by discounting the future cash flows considering the interest rate applicable on the reporting date for that class of deposits segregated by their tenure.

b) Exchange Traded Interest Rate (IR) Derivatives

The Company has not entered into any exchange traded derivative during the current and previous year.

The Company is not carrying out any activity of providing Derivative cover to third parties.

c) Disclosures on Risk Exposure in Derivatives

Qualitative Disclosures -

i) The Company undertakes the derivatives transaction to prudentLy hedge the risk in context of a particular borrowing or to diversify sources of borrowing and to maintain fixed and floating borrowing mix. The Company does not indulge into any derivative trading transactions. The Company reviews, the proposed transaction and outline any considerations associated with the transaction, including identification of the benefits and potential risks (worst case scenarios); an independent analysis of potential savings from the proposed transaction. The Company evaluates aLL the risks inherent in the transaction viz., counter party risk, Market Risk, Operational Risk, basis risk etc.

ii) Credit risk is controlled by restricting the counterparties that the Company deals with, to those who either have banking relationship with the Company or are internationally renowned or can provide sufficient information. Market/Price risk arising from the fluctuations of interest rates and foreign exchange rates or from other factors shaLL be closely monitored and controlled. NormaLLy transaction entered for hedging, wiLL run tfll its life, irrespective of profit or Loss. However in case of exceptions it has to be un-winded only with prior approval of M.D/CFO/Treasurer. Liquidity risk is controlled by restricting counterparties to those who have adequate facility, sufficient information, and sizable trading capacity and capability to enter into transactions in any markets around the world.

iii) The respective functions of trading, confirmation and settlement should be performed by different personnel. The front office and back-office role is weLL defined and segregated. all the derivatives transactions is quarterly monitored and reviewed by CFO and Treasurer. ALL the derivative transactions have to be reported to the Board of Directors on every quarterly board meetings including their financial positions.

iv) Company has a hedging poLicy in pLace which mandates to have a hedge reLation established before a derivative transaction is entered into. The Company ensures that the hedging effectiveness is monitored continuously during the Life of the derivative contract. The Company has put in pLace accounting poLicy covering recording hedge and non-hedge transactions, recognition of income, premiums and discounts; valuation of outstanding contracts, provisioning and credit risk mitigation.

b) Disclosure of Penalties and strictures imposed by RBI and other regulators

During the year under review, foLLowing monetary penaLty was Levied by RBI:

- ' 0.71 crores vide its order dated ApriL 25, 2025 for non-compLiance with certain provisions of the 'Non-Banking FinanciaL Company - SystemicaLLy Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016' and 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016

- ' 0.12 crores vide its order dated February 27, 2026 for non-compLiance with certain directions issued by RBI on 'Fair Practices Code' and 'InternaL Ombudsman for ReguLated Entities'"

c) Related Party Transactions

(Refer note no. 51)

d) Rating assigned by credit rating agencies and migration of ratings during the year Credit Rating

During the year under review, CRISIL Ratings Limited (CRISIL), has reaffirmed the credit rating of the Company's Long Term Bank FaciLities, Non- ConvertibLe Debentures, Subordinated Debt, Bank FaciLities and Fixed Deposit as 'CRISIL AAA/StabLe'. The rating on the Company's Short-term Bank faciLities and CommerciaL Paper has been reaffirmed at 'CRISIL A1 ' which indicates very strong degree of safety regarding timeLy payment of financiaL obLigations. Such securities carry Lowest credit risk.

During the year under review, India Ratings & Research Private Limited (IND), which is part of Fitch Group, reaffirmed the rating of Company's Long-term Debt instruments, Subordinated Debt programme, Bank FaciLities and Fixed Deposit Programme as 'IND AAA/StabLe' and PrincipaL protected market Linked debenture as IND PP-MLD AAA/StabLe. The Company's Short Term Bank Loans, CommerciaL Paper has been rated at IND A1 .

During the year under review, CARE Ratings, aLso reaffirmed the 'CARE AAA; StabLe' rating to Company's Longterm debt instrument and Subordinated Debt programme.

During the year under review, Brickwork Ratings India Private Limited (BWR) has, reaffirmed the 'BWR AAA/stabLe' rating of the Company's Long-term Subordinated Debt Issue.

The 'AAA' ratings denote the highest degree of safety regarding timeLy servicing of financiaL obLigations. Such instruments carry Lowest credit risk.

'A1 ' ratings indicate very strong degree of safety regarding timeLy payment of financiaL obLigations. Such securities carry Lowest credit risk.

e) During the year, the Company has not carried out any project finance activities.

f) During the year, the Company has not carried out any transactions reLated to off-baLance sheet exposures and structured products.

g) During the year, the Company has not carried out any transactions reLated to Non-Fund Based (NFB) Credit FaciLities.

IX) Net Profit or Loss for the period, prior period items and change in accounting policies

There are no such materiaL items which require discLosures in the notes to Accounts in terms of the reLevant Accounting Standard.

X) Revenue Recognition

Refer note no. 2.6 under Summary of MateriaL Accounting PoLicies.

XI) Indian Accounting Standard 27 (Ind AS 27) - Consolidated and Separate Financial Statements (CFS)

ALL the subsidiaries of the Company have been consoLidated as per Ind AS 27. Refer consoLidated financiaL statements (CFS)

XIX) Breach of covenant

During the current year and previous year there is no instances of breach of covenant of Loan avaiLed or debt securities issued.

XX) Divergence in Asset Classification and Provisioning

Disclosure of details of divergence, if either or both of the folowing conditions are satisfied:

a) the additional provisioning requirements assessed by RBI (or National Housing Bank(NHB) in the case of Housing Finance Companies) exceeds 5 percent of the reported profits before tax and impairment Loss on financial instruments for the reference period, or

b) the additional Gross NPAs identified by RBI/NHB exceeds 5 per cent of the reported Gross NPAs for the reference period.

As per the RBI inspection report for the reference period March 31, 2025, the assessment of Divergence in Asset Classification and Provisioning is below the threshold as defined under a) and b) above and hence the details as required in tabular form is not presented here.

XXI) Disclosure for NBFCs-UL

Mandatory listed within three years of identification as NBFC-UL - Not Applicable for the Company

f) Institutional set-up for liquidity risk management

The Liquidity Risk Management framework of the Company is governed by its Liquidity Risk Management PoLicy and Procedures approved by the Board. The Asset Liability Committee of the Board (ALCO) and Asset Liability Management Committee (ALMCO) oversee the implementation of liquidity risk management strategy of the Company and ensure adherence to the risk toLerance/Limits set by the Board.

The Company maintains a robust funding profile with no undue concentration of funding sources. In order to ensure a diversified borrowing mix, concentration of borrowing through various sources is monitored. The Company maintains a positive cumulative mismatch in aLL buckets. As on March 31, 2026, the Company maintained a Liquidity buffer of approximately ' 9,191 crore.

Definition of terms as used in the tabLe above:

a) Significant counterparty:

A Significant counterparty” is defined as a singLe counterparty or group of connected or affiLiated counterparties accounting in aggregate for more than 1% of the NBFC's totaL LiabiLities.

b) Significant instrument/product:

A Significant instrument/product" is defined as a singLe instrument/product of group of simiLar instruments/ products which in aggregate amount to more than 1% of the NBFC's totaL LiabiLities."

c) Total LiabiLities:

TotaL LiabiLities incLude aLL externaL LiabiLities (other than equity)."

d) Public funds:

"PubLic funds" incLudes funds raised either directLy or indirectLy through pubLic deposits, inter-corporate deposits, bank finance and aLL funds received from outside sources such as funds raised by issue of CommerciaL Papers, Debentures etc. but excLudes funds raised by issue of instruments compuLsoriLy convertibLe into equity shares within a period not exceeding 5 years from the date of issue. It incLudes totaL borrowings outstanding under aLL types of instruments/products.

e) Other short-term LiabiLities:

ALL short-term borrowings other than CPs and NCDs with originaL maturity Less than 12 months.

The Company compLies with the guidelines for computation of the Liquidity Coverage Ratio and shall all times meet the minimum requirements of LCR as laid down by the Reserve Bank of India and as applicable from time to time. The Liquidity Risk Management framework of the Company is governed by its Liquidity Risk Management Policy and Procedures approved by the Board. The Asset Liability Committee of the Board (ALCO) and Asset Liability Management Committee (ALMCO) oversee the implementation of liquidity risk management strategy of the Company and ensure adherence to the risk tolerance/limits set by the Board.

"The HQLAs comprises of Cash*, Investment in Central and State Government Securities #,and highly-rated Corporate Bonds and Commercial papers, including those of Public

Sector Enterprises, as adjusted after assigning the haircuts as prescribed by RBI.

* Cash would mean cash on hand and demand deposits with Scheduled Commercial Banks.

#Investment in Central and State Government Securities- This also includes securities held as per the provisions of Section 45IB of the RBI Act, 1934 (reckoned as HQLA only to the extent of 80% of the required holding).

The Company compLies with the guidelines for computation of the Liquidity Coverage Ratio and shall all times meet the minimum requirements of LCR as laid down by the Reserve Bank of India and as applicable from time to time. The Liquidity Risk Management framework of the Company is governed by its Liquidity Risk Management Policy and Procedures approved by the Board. The Asset Liability Committee of the Board (ALCO) and Asset Liability Management Committee (ALMCO) oversee the implementation of liquidity risk management strategy of the Company and ensure adherence to the risk tolerance/limits set by the Board.

The HQLAs comprises of Cash*, Investment in Central and State Government Securities #, and highly-rated Corporate Bonds and Commercial papers, including those of Public Sector Enterprises, as adjusted after assigning the haircuts as prescribed by RBI.

*Cash would mean cash on hand and demand deposits with Scheduled Commercial Banks.

#Investment in Central and State Government Securities- This also includes securities held as per the provisions of Section 45IB of the RBI Act, 1934 (reckoned as HQLA only to the extent of 80% of the required holding).

The Company maintains a robust funding profile with no undue concentration of funding sources. In order to ensure a diversified borrowing mix, concentration of borrowing through various sources is monitored. Further, the Company has prudential limits on investments in different instruments to maintain a healthy investment profile. Risks relating to foreign currency and interest rate is mitigated by entering in corresponding hedge transactions. Any potential collateral cals from the same forms a minuscule part of cash outflows. There is no currency mismatch in the LCR. The above is periodically monitored by ALMCO and reviewed by ALCO.

Since the total, impairment allowances under Ind AS 109 is higher than the total, provisioning required under IRACP (incLuding standard asset provisioning) as at March 31, 2026 and March 31 2025, no amount is required to be transferred to 'Impairment Reserve' for both the financiaL years. The gross carrying amount of asset as per Ind AS 109 and Loss aLLowances (Provisions) thereon incLudes interest accruaL on net carrying vaLue of stage - 3 assets as permitted under Ind AS 109. WhiLe, the provisions required as per IRACP norms does not incLude any such interest as interest accruaL on NPAs is not permitted under IRACP norms.

The baLance in the 'Impairment Reserve' (as and when created) shaLL not be reckoned for reguLatory capitaL. Further, no withdrawaLs shaLL be permitted from this reserve without prior permission from the Department of Supervision, RBI.

ii) As at March 31, 2026 and March 31 2025, there were no Loan accounts that are past due beyond 90 days but not treated as impaired, i.e. aLL 90 DPD ageing Loan accounts have been cLassified as Stage-3 and no dispensation is considered in stage-3 cLassification.

iii) Policy for sales/transfers out of amortized cost business model portfolios

Sale/transfer of portfolios out of amortized cost business model:

As a short-term financing arrangement, the Company has been transferring or seLLing certain pooLs of fixed rate Loan receivabLes backed by underLying assets in the form of tractors, vehicLes, equipments etc. by entering in to securitization transactions with the SpeciaL Purpose VehicLe Trusts (""SPV Trust"") sponsored by CommerciaL banks for consideration received in cash at the inception of the transaction. As a part of annuaL budgetary pLanning and with the objective of better Liquidity and risk management, the Company, at the beginning of the year, obtains approvaL of Asset LiabiLity Committee and Risk Management Committee of the Board of Directors for undertaking securitization transactions of certain vaLue of standard assets comprising the coLLateraL based Loan receivabLes at appropriate times during the year.

These transactions are carried out after compLying with RBI guideLines on securitization of standard assets. The consideration received through such securitization transactions is utiLized for funding reguLar vehicLe Loan disbursements to customers who service their Loans through fixed instaLments over a specified period of Loan tenor. Besides using securitization as alternate financing tooL, it is aLso being used as a effective BaLance sheet management through better Liquidity and risk management by transfer of assets from risk averse to risk takers.

When the assets in the form of Loan receivabLes are soLd/transferred to an SPV/Bank through securitization transaction, then on a consoLidated portfoLio LeveL, such saLe/transfer does not change the Company's business objective of hoLding financiaL assets to coLLect contractuaL cash flows.

The Company remains exposed to credit risk, being the expected Losses that wiLL be incurred on the securitized Loan portfoLio to the extent of the credit enhancement provided. Any increase in Losses as compared to the expected Loss shaLL require the Company to present its credit enhancement/cash coLLateraL to heLp compensate the investors. This is as per the requirement of the Reserve Bank of India. Thus, the Company as per Ind AS 109 has retained substantiaLLy aLL the risks and rewards of ownership of the financiaL asset.

The Company derecognizes a financiaL asset when the contractuaL rights to the cash flows from the financiaL asset expire, or it transfers the rights to receive the contractuaL cash flows in a transaction in which substantiaLLy aLL of the risks and rewards of ownership of the financiaL asset are transferred or in which the Company neither transfers nor retains substantiaLLy aLL of the risks and rewards of ownership and does not retain controL of the financiaL asset.

If the Company enters into transactions whereby it transfers assets recognized on its baLance sheet, but retains either aLL or substantiaLLy aLL of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

AccordingLy, these financiaL assets are not de-recognized by the Company from the financiaL statements prepared under Ind AS. Since the contractuaL terms of these financiaL assets give rise to cash flows, that are soLeLy payments of principaL and interest, on specified dates, these assets meet the SPPI criterion and are thus continued to be recognized in the books at amortized cost.

56 During the previous year ended March 31, 2025, the Company had made a contribution of ' 21.00 crore to New Democratic ELectoraL Trust, a Trust approved by the Central. Board of Direct Taxes under ELectoraL Trust Scheme, 2013 to enabLe ELectoraL Trust to make contributions to poLiticaL party/parties duLy registered with the ELection Commission, in such manner and at such times as it may decide from time to time. This contribution was as per the provisions of section 182 of the Companies Act, 2013. There is no such contribution during the current year ended March 31, 2026.

57. Events after the reporting date

There have been no other events after the reporting date that require discLosure in these financiaL statements.

58. Previous year figures have been regrouped/reclassified wherever necessary to conform tocurrent year presentation.

1

Vasicek 2-factor Approach

The Vasicek approach is adopted for deriving PIT PDs for SME portfolio. For portfolios characterized by limited data history, Low default counts, or high volatility in observed default rates, the Vasicek portfolio model has been adopted. This approach provides more stable and robust PiT PD estimates by smoothing idiosyncratic volatility and capturing systematic risk in portfolios with data constraints.