DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives designated as hedging instruments

The Company designates its derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates. At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other. There is an economic relationship between the hedged item and the hedging instrument as the terms of the cross currency swap contract match that of the foreign currency borrowing (notional amount, interest payment dates, principal repayment date etc.). The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the hedging instruments is identical to the hedged risk components. To test the hedge effectiveness, the Company uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in other equity under ‘effective portion of cash flow hedges’. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised in the statement of profit and loss.

Derivatives not designated as hedging instruments

There are no undesignated derivatives.

Notes:

1) The interest rate risk and exchange rate risk on the borrowings of the Company are managed using various derivative instruments which are entered into from time to time. The risk management strategy and the use of derivatives are explained in note 54 and 83.04.

2) The Company has designated the interest rate derivatives which were entered to mitigate interest rate risks on its external commercial bond, external commercial borrowings, term loan from banks and institutions and nonconvertible debentures as hedging instruments.

Year ended March 31, 2026

The Company allotted 1,181,491 equity shares of face value of Rs. 2/- each fully paid up at an exercise price of Rs. 38.71 per equity share (including premium of Rs. 36.71 per equity share) under the Shriram Finance Limited Employee Stock Option Scheme 2023 (No.1) on various dates.

Year ended March 31, 2025

The Company had allotted 89,995 equity shares of face value of Rs. 2/- each fully paid up at an exercise price of Rs. 38.71 per equity share (including premium of Rs. 36.71 per equity share) under the Shriram Finance Limited Employee Stock Option Scheme 2023 (No.1) on various dates during the post-spilt period i.e. January 11, 2025 to March 31, 2025.

The Company had allotted 265,967 equity shares of face value of Rs. 10/- each fully paid up at an exercise price of Rs. 193.55 per equity share (including premium of Rs. 183.55 per equity share) under the Shriram Finance Limited Employee Stock Option Scheme 2023 (No.1) on various dates during the pre-split period i.e. April 01, 2024 to January 10, 2025.

(B) Terms/ rights attached to equity shares

i) The Company has only one class of equity shares having a par value of Rs. 2/- per share (March 31, 2025: Rs. 2/- per share). Each holder of equity shares is entitled to one vote per share. The final dividend is subject to the approval of the shareholders in the ensuing annual general meeting.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(C) Aggregate number of equity shares issued for consideration other than cash/ bonus shares issued during the period of five years immediately preceding the reporting date:

The aggregate number of equity shares issued for consideration other than cash/ bonus shares issued during the period of five years immediately preceding the reporting date were Nil (March 31, 2025: Nil).

i) The Board of Directors in their meeting held on October 31, 2025 declared interim dividend of (240%) Rs. 4.80 per equity share of face value of Rs. 2/- each fully paid up for the financial year 2025-26 amounting to Rs. 9,029,319,312/-(gross) subject to deduction of tax at source as per the applicable rate(s) to all the eligible shareholders. The record date for payment of interim dividend was November 07, 2025. The interim dividend was paid to eligible Members on November 17, 2025.

The Board of Directors has recommended a final dividend of Rs. 6/- per equity share of face value of Rs. 2/- each fully paid up i.e. 300%, for the financial year 2025-26 subject to approval by the Members in the ensuing 47^th Annual General Meeting (47^th AGM) of the Company. This is in addition to the interim dividend of Rs. 4.80 per equity share declared on October 31, 2025.

With this the total dividend for the financial year 2025-26 will be Rs. 10.80 per share of Rs. 2/-. Pursuant to Regulation 42 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Register of Members and the Share Transfer Books of the Company will remain closed from Saturday, July 04, 2026 to Friday, July 10, 2026 (both days inclusive) for taking record of the Members of the Company for the purpose of payment of the final dividend and 47^th AGM, if approved by the Members at the ensuing 47^th AGM. The final dividend will be paid to the eligible Members before August 09, 2026 subject to deduction of tax at source as per the applicable rate(s), if approved by the Members at the 47^th AGM.

ii) The Board of Directors had recommended a final dividend of Rs. 3/- per equity share of nominal face value of Rs. 2/- each fully paid up i.e. 150%, for the financial year 2024-25 which had been approved by the Members of the Company in the 46^th Annual General Meeting of the Company held on July 18, 2025. The Record Date for the final dividend was July 11, 2025 .The Company paid the final dividend aggregating to Rs. 5,642,289,033/- (gross) subject to deduction of tax at source as per the applicable rate(s) to all the eligible shareholders on August 01, 2025.This was in addition to the interim dividend of Rs. 22/- per equity share (pre-split) of Rs. 10/- each and second interim dividend Rs. 2.50 per equity share of Rs. 2/- each (post-split) fully paid-up for the financial year 2024-25 declared by the Company on October 25, 2024 and January 24, 2025 respectively. With this the total dividend for the financial year 2024-25 was Rs. 9.90 per share of Rs. 2/- each after adjusting for split.

iii) *First interim dividend per share, declared pre-split for the financial year 2024-25 and final dividend per share for the financial year 2023-24 paid in financial year 2024-25, are not comparable with dividend per share paid subsequent periods [Refer note 28(I)].

(I) The Members through postal ballot on December 20, 2024, had approved the sub-division/ split of the equity shares from face value of Rs. 10/- per share to face value of Rs. 2/- per share. The record date for the share split was January 10, 2025.

Nature and purpose of reserves

a) Share application money pending allotment: The amount received on the application for equity shares of the Company on which allotment is not yet made, to the extent not refundable.

b) Securities premium: The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

c) Capital reserve: Capital reserve is the excess of net assets taken over cost of consideration paid during amalgamation.

d) Capital redemption reserve: The Company has recognised capital redemption reserve on redemption of nonconvertible redeemable preference shares from its retained earnings. The amount in capital redemption reserve is equal to nominal amount of the non-convertible redeemable preference shares redeemed. The Company may issue fully paid up bonus shares to its members out of the capital redemption reserve.

e) Debenture Redemption Reserve (DRR):

(1) Pursuant to Section 71 of the Companies Act, 2013 and Circular 04/2013, read with notification issued date June 19, 2016 issued by Ministry of Corporate Affairs, the Company is required to transfer 25% of the value of the outstanding debentures issued through public issue as per the present SEBI (Issue and Listing of Debt Securities) Regulation, 2008 to Debenture redemption reserve (DRR) and no DRR is required in case of privately placed debenture. Also the Company is required before 30^th day of April of each year to deposit or invest, as the case may be, a sum which shall not be less than 15% of the amount of its debenture issued through public issue maturing within one year from the balance sheet date.

(2) As per the notification G.S.R. 574(E) dated August 16, 2019, the Ministry of Corporate Affairs has amended the Companies (Share Capital and Debentures) Rules, DRR need not be created for debentures issued by a Non-Banking Finance Company subsequent to the notification date. The Company has not created DRR on public issue of non-convertible debentures issued after the date of said notification.

(3) In respect of the debentures issued through public issue, the Company has created DRR of Rs. 17.85 crores (March 31, 2025: Rs. 18.41 crores). The Company subsequent to the year end has deposited a sum of Rs. 15.40 crores (March 31, 2025: Rs. Nil) in the form of fixed deposits with scheduled banks, representing 15% of the debenture issued through public issue, which are due for redemption within one year from the balance sheet date.

(4) On redemption of the debentures for which the DRR is created, the amounts no longer necessary to be retained in this account need to be transferred to the retained earnings.

f) General reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

g) Statutory reserve: Every year the Company transfers a sum of not less than twenty per cent of net profit of that year as disclosed in the statement of profit and loss to its Statutory Reserve pursuant to Section 45-IC of the RBI Act, 1934.

The conditions and restrictions for distribution attached to statutory reserves as specified in Section 45-IC(1) in the Reserve Bank of India Act, 1934:

(1) Every Non-Banking Financial Company (NBFC) shall create a reserve fund and transfer therein a sum not less than twenty per cent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.

(2) No appropriation of any sum from the reserve fund shall be made by the NBFC except for the purpose as may be specified by the RBI from time to time and every such appropriation shall be reported to the RBI within twenty-one days from the date of such withdrawal:

Provided that the RBI may, in any particular case and for sufficient cause being shown, extend the period of twenty-one days by such further period as it thinks fit or condone any delay in making such report.

(3) Notwithstanding anything contained in sub-section (1), the Central Government may, on the recommendation of the RBI and having regard to the adequacy of the paid-up capital and reserves of a NBFC in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section (1) shall not be applicable to the NBFC for such period as may be specified in the order:

Provided that no such order shall be made unless the amount in the reserve fund under sub-section (1) together with the amount in the share premium account is not less than the paid-up capital of the NBFC.

h) Share option outstanding: The share-based payment reserve is used to recognise the value of equity settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

i) Remeasurement gain/ (loss) on defined benefit plan: Remeasurement comprising of actuarial gains and losses and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to the statement of profit and loss in subsequent periods.

j) Other comprehensive income: Other comprehensive income includes effective portion of cash flow hedges and gain/ (loss) on fair valuation of investments in quoted equity shares.

Effective portion of cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges which shall be reclassified to the statement of profit and loss only when the hedged transaction affects the statement of profit and loss, or included as a basis adjustment to the non-financial hedged item, consistent with the Company accounting policies.

Gain/ (loss) on fair valuation of investments in quoted equity shares represents gains and losses from the change in the fair value of investments in quoted equity instruments in accordance with paragraph 5.7.5 of Ind AS 109 -Financial Instruments.

k) Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to statutory reserve, general reserve, dividend distributed to shareholders and other appropriations.

Kfl EXCEPTIONAL ITEMS

The Board of Directors of the Company in its meeting held on May 13, 2024 had approved the disinvestment of the Company’s entire stake in Shriram Housing Finance Limited (SHFL) (now renamed as Truhome Finance Limited), a debt-listed non-material subsidiary of the Company and in this regard an agreement was entered inter-alia into between the Company, SHFL and Mango Crest Investment Limited (Purchaser, an affiliate of Warburg Pincus) on May 13, 2024 (Share Purchase Agreement) subject to receipt of requisite approvals from regulatory authorities. On November 29, 2024, the Company acquired 40,000 Compulsorily Convertible Debentures (CCDs) of Rs. 100,000/- each from an external investor for Rs. 424.37 crores. The CCDs were converted to 31,560,000 equity shares of Rs. 10/- each of SHFL on December 09, 2024. Post receipt of requisite regulatory approvals, the Company has transferred 308,111,107 equity shares of face value of Rs. 10/- each fully paid up of SHFL to the Purchaser for a consideration of Rs. 3,929.03 crores on December 11, 2024. Consequently, SHFL ceased to be a subsidiary of the Company with effect from December 11, 2024.

The exceptional item disclosed in the financial statements for the year March 31, 2025, represents resultant gain of Rs. 1,656.77 crores (Rs. 1,489.39 crores net of tax) on account of disinvestment of SHFL. The gain is after adjusting the carrying amount of investments in SHFL as on the date of sale, expenses incurred on the sale transaction, indemnity obligations as per the terms of the Share Purchase Agreement and derecognition of goodwill of Rs. 217.28 crores allocated to the investments in SHFL as per Ind AS 36 - Impairment of Assets.

The Board of Directors of the Company in its meeting held on April 26, 2024 had approved acquisition of 100% equity stake in Shriram Overseas Investments Private Limited [(now, renamed as Shriram Overseas Investments Limited (‘Shriram Overseas’), w.e.f. June 04, 2025)], subject to approval of RBI. The RBI has conveyed its approval for the said acquisition vide its letter dated April 01, 2025, subject to compliance with conditions specified therein. Post compliance of the conditions as specified in RBI’s approval letter, the Company has acquired 100% equity stake for a purchase consideration of Rs. 50.12 crores in Shriram Overseas. Consequent to acquisition, Shriram Overseas became a wholly-owned subsidiary of the Company w.e.f. May 09, 2025.

On September 26, 2025, the Company made further investment of Rs. 300.01 crores in Shriram Overseas by subscribing 19,025,000 equity shares of face value of Rs. 10/- each at a premium of Rs. 147.69 per equity share through rights issue.

The Company has recognised its investment in associate under equity method and not adjusted to fair value at the end of each reporting period.

RETIREMENT BENEFIT PLANa) Defined contribution plan

A defined contribution plan is a pension plan under which the Company pays fixed contributions; there is no legal or constructive obligation to pay further contributions. The assets of the plan are held separately from those of the Company in a fund under the control of trustees.

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 160.01 crores (March 31, 2025: Rs. 168.20 crores) for Provident Fund contributions and Rs. 29.86 crores (March 31, 2025: Rs. 29.12 crores) for Employee State Insurance Scheme contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b) Defined benefit plan Gratuity

The Company has a defined benefit gratuity plan (funded). The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the employee’s length of service and last drawn salary. The fund is managed by third party fund managers.

Each year, the Board of Trustees reviews the level of funding in the gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides contribution to be made by the Company based on the results of this annual review. The trust is in process of investing entire funds in government securities through third party fund managers and as on March 31, 2026, 94.35 % funds are invested in government securities and balance 5.65% funds are invested in money market and corporate debt instruments. The Board of Trustees aim to keep annual contributions of the Company relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

The following tables summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

Impact of New Labour Codes

The Government of India has consolidated 29 existing labour legislations into a unified framework comprising four Labour Codes viz. Code on wages 2019, Codes on Social Security 2020, Industrial Relation Code 2020 and Occupational Safety, Health and Working Condition Code 2020 (collectively referred to as the New Labour Codes). These Codes have been made effective from November 21, 2025. The corresponding draft rules under these codes have been issued by the Government.

Employee benefits expenses for the year ended March 31, 2026 include incremental impact on gratuity of Rs. 131.71 crores and on long-term compensated absences of Rs. 65.24 crores due to change in definition of wages under the New Labour Codes. The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the New Labour Codes and would provide appropriate accounting effect on the basis of such developments as required.

KM SHARE-BASED PAYMENTS

The Company provides employee stock option scheme and share appreciation rights to its employees.

50.01: Employee Stock Option Plan (ESOP Scheme)

50.01.01 About the plan

Shriram Finance Limited Employee Stock Options Scheme 2023 (No.1) [“SFL ESOS 2023(No.1)”] has been created in lieu of the erstwhile SCUF ESOS 2013 to issue stock options to the eligible employees of the SCUF (“Transferor Company”) taking into account the share exchange ratio as provided in terms of clause 3.36.1 of the approved Composite Scheme of Arrangement and Amalgamation (“Scheme”). The objective of SFL ESOS 2023 (No.1) plan is that the eligible employees of the Transferor Company continue to enjoy the benefit of stock options upon becoming the employees of the Company and to restore the value of options post amalgamation in the manner provided in terms of Clause 3.35.17 of the Scheme. This SFL ESOS 2023 (No.1) plan has been adopted on March 15, 2023 by the Nomination and Remuneration Committee and Board of directors of the Company.

The options shall vest in the hands of the option holder after a minimum period of 12 months from the date of grant of option or such longer period as may be determined by the Committee subject to the condition that the option grantee continues to be an employee of the Company and the performance or other conditions as may be determined by the Committee. The maximum period of vesting shall be 5 years from the date of grant.

The period during which the options granted by the Transferor Company under SCUF ESOS 2013 plan were held by the eligible employee shall be adjusted against the minimum vesting period. That is, the date of vesting under the SCUF ESOS 2013 plan shall be considered as the vesting date under SFL ESOS 2023 (No.1) plan.

The exercise price shall be Rs.193.55 per fresh options under the SFL ESOS 2023 (No.1) plan.

The options vested shall be exercised within period of ten years from the vesting date. When exercisable, each option is convertible into one equity share. Any option granted shall be exercisable according to the terms and conditions as determined by the Scheme.

more volatile a stock is, the more is its potential to go up (or come down), and the more is the probability to gain from the movement in the price. Accordingly, an option to buy a highly volatile stock is more valuable than the one to buy a less volatile stock, since the probability of gaining is lesser in the latter case.

c) Risk-free interest rate

The risk-free interest rate being considered for the calculation is the interest rate applicable on government securities having 10 year maturity period.

d) Exercise price

Exercise price of the options granted is as per SCUF ESOS 2023 plan.

e) Time to maturity/ expected life of options

Time to maturity/ expected life of options is the period from the grant date to the date on which option is expected to be exercised. The minimum life of share option is the minimum period before which the options cannot be exercised and maximum life is the period after which the options cannot be exercised.

Considering the deep discount on the market price i.e. 55% to 70%, it is expected that the options will be exercised in 1 year from the vesting date. As such the average expected life of options is considered at 2 years.

50.01.04: Effect of the employee share-based payment plans on the statement of profit and loss and on its financial position

The Company has recorded employee share-based compensation cost of Rs. Nil in the statement of profit and loss for the financial year ended March 31, 2026 (March 31, 2025: Rs. Nil).

The share option outstanding in the balance sheet as at March 31, 2026 is Rs. 20.66 crores (March 31, 2025: Rs. 42.92 crores) [Refer note 29].

50.02: Share Appreciation Rights (SAR) (cash-settled)50.02.01: About the plan

Shriram Finance Limited Employees Phantom Stock Appreciation Rights Plan 2024 (hereinafter referred to as “Shriram Finance PSAR Plan 2024” or “the PSAR Plan”) was approved by the Nomination and Remuneration Committee and the Board of Directors in their respective meetings held on June 01, 2024 to grant share appreciation rights (SARs) to eligible employees of the Company. Subsequently, the SARs have been granted under this scheme. The contractual life (which is equivalent to the vesting and exercise period) of the SARs outstanding ranges from 2 to 5 years.

The objective of Shriram Finance PSAR Plan 2024 is to provide means to enable the Company to attract and retain appropriate human talent, to motivate the employees/ directors with incentives and reward opportunities, to achieve sustained growth of the Company and the creation of shareholders value by aligning the interests of the employees/ directors which will lead to long-term wealth creation, to create a sense of ownership and participation amongst the employees/ directors or otherwise increase their proprietary interest and to provide additional deferred rewards to the employees/ directors.

Shriram Finance PSAR Plan 2024 is a cash-settled incentive scheme. The incentive is linked to the appreciation in the market price of the equity shares of the Company over the tenure of the plan.

(II) Disclosures relating to investments

The Company holds 44.56% (March 31, 2025: 44.56%) of equity shares of its associate company. The Company has sold its entire stake in its subsidiary on December 11, 2024 [Refer note 41]. The Company acquired 100% stake in Shriram Overseas during the financial year 2025-26. Disclosure relating to transactions with these companies is given in note 49.

52 CAPITAL MANAGEMENT

The Company maintains an actively managed capital base to cover risks inherent in the business which includes issued equity capital, share premium and all other equity reserves attributable to equity holders of the Company.

As an NBFC, the RBI requires us to maintain a minimum capital to risk weighted assets ratio (CRAR) consisting of Tier I and Tier II capital of 15% of our aggregate risk weighted assets. Further, the total of our Tier II capital cannot exceed 100% of our Tier I capital at any point of time. The capital management process of the Company ensures to maintain a healthy CRAR at all the times. Refer note 65 and 83.02 for the Company’s capital ratios.

The primary objectives of the Company’s capital management policy are to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholder value.

The Company manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes have been made to the objectives, policies and processes from the previous years except those incorporated on account of regulatory amendments. However, they are under constant review by the Board. The Company has complied with the RBI Direction - RBI/DOR/2025-26/359 DOR.ACC.REC.No.278/21.04.018/2025-26 Reserve Bank of India (Non-Banking Financial Companies - Financial Statements: Presentation and Disclosures) Directions, 2025 on disclosure requirements and RBI Direction - RBI/DOR/2025-26/345 DOR.CAP.REC.264/21-01-002/2025-26 Reserve Bank of India (Non-Banking Financial Companies - Prudential Norms on Capital Adequacy) Directions, 2025 dated November 28, 2025 as amended.

53 FAIR VALUE MEASUREMENT 53.01: Valuation principle

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price), regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as explained in material accounting policies of the year ended March 31, 2026.

53.05: Movements in Level-3 financial instruments measured at fair value

The following tables show a reconciliation of the opening and closing amounts of Level-3 financial assets and liabilities which are recorded at fair value. Transfers from Level-3 to Level-2 occur when the market for some securities became more liquid, which eliminates the need for the previously required significant unobservable valuation inputs. Since the transfer, these instruments have been valued using valuation models incorporating observable market inputs. Transfers into Level-3 reflect changes in market conditions as a result of which instruments become less liquid. Therefore, the Company requires significant unobservable inputs to calculate their fair value.

53.03: Valuation techniquesFair values of financial assets, other than those which are subsequently measured at amortised cost, have been arrived at as under:Derivative financial instruments

Foreign exchange contracts include foreign exchange forward and swap contracts, interest rate swaps and over-the-counter foreign exchange options. These instruments are valued by either observable foreign exchange rates, observable or calculated forward points and option valuation models. With the exception of contracts where a directly observable rate is available which are disclosed as Level-1, the Company classifies derivative financial instruments as Level-2 financial instruments when no unobservable inputs are used for their valuation or the unobservable inputs used are not significant to the measurement (as a whole).

Investments in mutual funds/ equity instruments

Investment in units of mutual funds are measured based on their published Net Asset Value (NAV), taking into account redemption and/ or other restrictions. Such instruments are generally Level 1. Equity instruments in non-listed entities are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case and classified as Level-3. Quoted equity instruments on recognised stock exchanges are valued at Level-1 hierarchy being the unadjusted quoted price as the reporting date.

Government securities

Investment in government securities held for trading are measured based on latest quoted price available at platform notified by the regulator.

Certificate of Deposits (CDs)

Certificate of deposits are short-term financial instruments issued by banks. Financial Benchmark India Private Limited (FBIL) has developed the FBIL-CD, a new benchmark for the money market based on traded CDs reported on the FIMMDA Trade Reporting and Confirmation System (FTRAC) platform of the Clearing Corporation of India Ltd (CCIL). FBIL-CD is announced for seven tenors of 14 days, 1 month, 2 months, 3 months, 6 months, 9 months and 12 months. For valuation, the Company uses FBIL-CD benchmark and based on that benchmark the Company interpolates and calculates CD prices corresponding to their residual maturities and such instruments are classified as Level 2.

Venture capital fund

Investment in venture capital fund are measured based on net asset value basis.

53.04: Transfer between fair value hierarchy levels

During the financial year there were no transfers between Level-1 and Level-2.

53.06: Impact of changes to key assumptions on fair value of Level-3 financial instruments measured at fair value

The table summarises the valuation techniques together with the significant unobservable inputs used to calculate the fair value of the Company’s Level-3 assets and liabilities. The range of values indicates the highest and lowest level input used in the valuation technique and, as such, only reflects the characteristics of the instruments as opposed to the level of uncertainty to their valuation. Relationships between unobservable inputs have not been incorporated in this summary.

53.07: Sensitivity of fair value measurements to changes in unobservable market data

The table below describes the effect of changing the significant unobservable inputs to reasonable possible alternatives. All changes would be reflected in the statement of profit and loss. Sensitivity data are calculated using a number of techniques, including analysing price dispersion of different price sources, adjusting model inputs to reasonable changes within the fair value methodology.

The ranges are not comparable or symmetrical as the model inputs are usually not in the middle of the favourable/ unfavourable range.

The table below shows data in relation to Level-3 inputs that are already aggregated on the underlying product levels without assuming any potential diversification effect, but including potential off-sets from economic or accounting hedge relationships in place. The Company is of the opinion that, whilst there may be some diversification benefits, incorporating these would not be significant to the analysis.

The management assessed that cash and cash equivalents, trade receivables, trade payables, other receivables, other payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

53.09: 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. The below methodologies and assumptions relate only to the instruments in the above tables. Instruments with no comparable instruments or valuation inputs are classified as Level-3.

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 trade receivables, other receivables, balances other than cash and cash equivalents (other than deposits with banks), trade payables, other payables and other financial liabilities without a specific maturity.

Bank deposits and receivable from trusts on account of securitisation

The fair value of bank deposits and receivable from trusts on account of securitisation has been determined using the discounted cash flow method. The discount rates used are based on the prevailing interest rates offered by the State Bank of India (SBI) for fixed deposits with comparable maturities as on the reporting date.

Loans and advances to customers

The fair values of loans and receivables are estimated by discounted cash flow models based on contractual cash flows using weighted average interest rates for the disbursements done during the last quarter of the financial year.

Pass through certificates

These instruments include asset backed securities. The market for these securities is not active. The fair values of pass through certificates are estimated by discounted cash flow models based on contractual cash flows using weighted average interest rates for the deals entered during the last quarter of the financial year.

Investment in associate at cost

As per Ind AS 28 - Investments in Associates and Joint Ventures, interest in associate are recognised at cost and not adjusted to fair value at the end of each reporting period. Cost represents amount paid for acquisition of the said investments. The Company assesses at the end of each reporting period, if there are any indications that the said investments may be impaired. If so, the Company estimates the recoverable value/ amount of the investment and provides for impairment, if any i.e. the deficit in the recoverable value over cost.

Investment in subsidiary

The Company had accounted for its investment in erstwhile subsidiary SHFL at fair value at the time of acquisition due to business combination. The investment is subsequently measured at cost till the date of sale (Refer note 41).

The Company has accounted for its investment in subsidiary Shriram Overseas at fair value at the time of acquisition. The investment is subsequently measured at cost(Refer note 44).

Investment in government securities at amortised cost

The fair values of held-to-maturity investments in government securities are measured based on latest quoted price available at platform notified by the regulator.

Issued debt and borrowings

The fair value of issued debt and borrowings is estimated by discounted cash flow models based on contractual cash flows using weighted average interest rates for the deals entered into during the last quarter of the financial year.

Deposits

The fair value of public deposits and deposit from corporates is estimated by discounted cash flow models based on contractual cash flows using weighted average interest rates for the deposits accepted during the last quarter of the financial year.

Other financial assets

The fair value of other financial assets (other than receivable from trusts on account of securitisation) from have been measured under Level-3 at fair value based on discounted cash flow model.

Off-balance sheet positions

Estimated fair values of off-balance sheet positions are based on the carrying amounts due to the short-term maturities of these positions.

Whilst risk is inherent in the Company’s activities, it is managed through an integrated risk management framework including ongoing identification, measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Company’s continuing profitability and each individual within the Company is accountable for the risk exposures relating to his or her responsibilities. The Company is exposed to credit risk, liquidity risk and market risk. It is also subject to various operating and business risks.

54.01: Introduction and risk profile54.01.01: Risk management structure

The Board of Directors are responsible for the overall risk management approach and for approving the risk management strategies and principles.

The Board has constituted the Risk Management Committee (RMC) which is responsible for monitoring the overall risk process within the Company. The RMC has the overall responsibility for the development of the risk strategy and implementing principles, frameworks, policies and limits. It is responsible for managing risk decisions and monitoring risk levels. The Chief Risk Officer is responsible for implementing and maintaining risk related procedures to ensure an independent control process is maintained. The risk owners within each department will report to the RMC.

The risk owners are responsible for monitoring compliance with risk principles, policies and limits across the Company. Each department has its risk owner who is responsible for the control of risks, including monitoring the actual risk of exposures against authorised limits and the assessment of risks. The Company’s treasury is responsible for managing its assets and liabilities and the overall financial structure. It is also primarily responsible for the funding and liquidity risks of the Company.

The Company’s policy is that risk management processes throughout the Company are audited annually by the internal audit function, which examines both the adequacy of the procedures and the Company’s compliance with the procedures. Internal audit discusses the results of all assessments with management, and reports its findings and recommendations to RMC.

54.01.02: Risk mitigation and risk culture

As part of its overall risk management, the Company can use derivatives and other instruments to manage exposures resulting from changes in interest rates and foreign currencies associated with foreign currency transactions.

54.01.03: Risk measurement and reporting systems

The Company’s risks are measured using a method that reflects both the expected loss likely to arise in normal circumstances and unexpected losses, which are an estimate of the ultimate actual loss. The models make use of probabilities derived from historical experience, adjusted to reflect the economic environment, as necessary.

The Company’s policy is to measure and monitor the overall risk-bearing capacity in relation to the aggregate risk exposure across all risk types and activities.

Information compiled from all the departments is examined and processed in order to analyse, control and identify risks on a timely basis. This information is presented and explained to the RMC and the head of each department.

The RMC receives a comprehensive risk report once a quarter which is designed to provide all the necessary information to assess and conclude on the risks of the Company.

It is the Company’s policy to ensure that a robust risk awareness is embedded in its organisational risk culture. Employees are expected to take ownership and be accountable for the risks the Company is exposed to that they decide to take on. The Company’s continuous training and development emphasises that employees are made aware of the Company’s risk appetite and they are supported in their roles and responsibilities to monitor and keep their exposure to risk within the

Company’s risk appetite limits. Compliance breaches and internal audit findings are important elements of employees annual ratings and remuneration reviews.

54.01.04: Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on spreading its lending portfolio across all the states with a cap on maximum limit of exposure for a state and also for an individual/ group.

54.02: Credit risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for geographical concentrations, and by monitoring exposures in relation to such limits.

Credit risk is monitored by the credit department of the Company. It is their responsibility to review and manage credit risk, including environmental and social risk for all types of counterparties. Credit risk consists of line credit managers who are responsible for their business lines and manage specific portfolios and experts who support both the line credit manager, as well as the business with tools like credit risk systems, policies, models and reporting.

The Company has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties. The credit quality review process aims to allow the Company to assess the potential loss as a result of the risks to which it is exposed and take corrective actions.

54.02.01: Derivative financial instruments

Credit risk arising from derivative financial instruments is, at any time, limited to those with positive fair values, as recorded on the balance sheet. With gross-settled derivatives, the Company is also exposed to a settlement risk, being the risk that the Company honours its obligation, but the counterparty fails to deliver the counter value.

54.02.02: Impairment assessment

The references below show where the Company’s impairment assessment and measurement approach is set out in this report. It should be read in conjunction with the summary of material accounting policies.

The Company’s definition and assessment of default (Refer note 54.02.02.01).

- How the Company defines, calculates and monitors the probability of default, exposure at default and loss given default (Refer notes 54.02.02.02 to 54.02.02.04)

- When the Company considers there has been a significant increase in credit risk of an exposure (Refer note 54.02.02.05).

- The Company’s policy of segmenting financial assets where ECL is assessed on a collective basis (Refer note 54.02.02.07).

Kfl RISK MANAGEMENT (Contd.)

- The details of the ECL calculations and categorisation of loans for stage 1, stage 2 and stage 3 assets (Refer note 6.1(VI)).

54.02.02.01: Definition of default

The Company considers a financial instrument defaulted and therefore stage 3 (credit-impaired) for ECL calculations in all cases when the borrower becomes 90 days past due on its contractual payments.

As a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of instances that may indicate unlikeliness to pay. When such events occur, the Company carefully considers whether the event should result in treating the customer as defaulted and therefore assessed as stage 3 for ECL calculations or whether stage 2 is appropriate. Such events include:

- The borrower requesting emergency funding from the Company.

- A material decrease in the underlying collateral value where the recovery of the loan is expected from the sale of the collateral.

- A covenant breach not waived by the Company.

- The debtor (or any legal entity within the debtor’s Company) filing for bankruptcy application/ protection.

- Repossession of security

- All the facilities of a borrower are treated as stage 3 when one of his facility becomes 90 days past due i.e. credit impaired.

- The restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise. 54.02.02.02: Probability of Default (PD) estimation process

It is an estimate of the likelihood of default over a given time horizon. PD estimation process is done based on historical internal data available with the Company. While arriving at the PD, the Company also ensures that the factors that affects the macro economic trends are considered to a reasonable extent, wherever necessary. The Company calculates the 12 month PD by taking into account the past historical trends of the portfolio and its credit performance. In case of assets where there is a significant increase in credit risk, lifetime PD has been applied which is computed based on survival analysis. For credit impaired assets, a PD of 100% has been applied.

54.02.02.03: Exposure at Default (EAD)

The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the impairment calculation, addressing both the ability to increase its exposure while approaching default and potential early repayments too.

To calculate the EAD for a stage 1 loan, the Company assesses the possible default events within 12 months for the calculation of the 12 months ECL.

For stage 2 and stage 3 financial assets, the exposure at default is considered for events over the lifetime of the instruments.

In case of undrawn loan commitments, a credit conversion factor of 100% is applied for expected drawdown.

54.02.02.04: Loss Given Default (LGD)

LGD is an estimate of the loss arising in case where a default occurs. It is based on the difference between the contractual cash flows due and those that the Company would expect to receive, including from the realisation of any security. 54.02.02.05: Significant Increase in Credit Risk (SICR)

The Company continuously monitors all assets subject to ECLs in order to determine whether an instrument or a portfolio of instruments is subject to 12 month ECL or lifetime ECL. The Company assesses whether there has been an event which could cause a significant increase in the credit risk of the underlying asset or the customers ability to pay and accordingly change the 12 month ECL to a lifetime ECL.

In certain cases, the Company may also consider that events explained in note 54.02.02.01 are a significant increase in credit risk as opposed to a default. Regardless of the above, if contractual payments are more than 30 days past due, the credit risk is deemed to have increased significantly since initial recognition.

RISK MANAGEMENT (Contd.)

When estimating ECLs on a collective basis for a Company of similar assets (as set out in note 54.02.02.07), the Company applies the same principles for assessing whether there has been a significant increase in credit risk since initial recognition. 54.02.02.06: Forward looking information

As explained in note 6.1(VI), the Company has incorporated forward looking information and macro-economic factors while calculating PD and LGD rate.

54.02.02.07: Grouping financial assets measured on a collective basis

As explained in note 6.1(VI), the Company calculates ECLs only on a collective basis. The Company segments the exposure into smaller homogeneous portfolios, based on a combination of internal and external characteristics of the loans as given below.

1) Commercial vehicles

2) Construction equipments

3) Farm equipments

4) Passenger vehicles

5) Gold loans

6) Personal loans

7) MSME secured

8) MSME unsecured

9) Loans to NBFC

10) Two wheelers

54.03: Liquidity risk and funding management

In assessing the Company’s liquidity position, consideration shall be given to:

1) Present and anticipated asset quality

2) Present and future earnings capacity

3) Historical funding requirements

4) Current liquidity position

5) Anticipated future funding needs, and

6) Sources of funds.

The Company maintains a portfolio of marketable assets that are assumed to be easily liquidated and undrawn cash credit limits which can be used in the event of an unforeseen interruption in cash flow. The Company also enters into securitisation deals (direct assignment as well as pass through certificates) of their loan portfolio, the funding from which can be accessed to meet liquidity needs. In accordance with the Company’s policy, the liquidity position is assessed under a variety of scenarios, giving due consideration to stress factors relating to both the market in general and specifically to the Company. Net liquid assets consist of cash, short-term bank deposits and investments in mutual fund available for immediate sale, less issued securities and borrowings due to mature within the next month. Borrowings from banks and financial institutions, issue of debentures and bonds and acceptance of public deposits are considered as important sources

of funds to finance lending to customers. They are monitored using the advances to borrowings ratio, which compares loans and advances to customers as a percentage of secured and unsecured borrowings.

The Board of Directors approves constitution of Asset Liability Management Committee (ALCO). It reviews or monitors Asset Liability Management (ALM) mismatch. It conducts periodic reviews relating to the liquidity position and stress test assuming various what if scenarios. The ALCO is responsible for ensuring adherence to the limits set by the Board as well as for deciding the business strategy of the Company in line with the Company’s budget and decided risk management objectives. It is a decision-making unit responsible for balance sheet planning from risk-return perspective including strategic management of interest rate and liquidity risks. It also evaluates the borrowing plan of subsequent quarters on the basis of previous borrowings of the Company. It will be responsible for ensuring the adherence to the target set by the Board of Directors. The meetings of ALCO are held at quarterly intervals. The ALM support groups, consisting of operating staff are responsible for analysing, monitoring and reporting the risk profiles to the ALCO. The ALCO support group meets every fortnight. The minutes of ALCO meetings are placed before the RMC and the Board of Directors in its next meeting for its ratification.

Market risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and equity prices. The Company classifies exposures to market risk into either trading or non-trading portfolios and manages each of those portfolios separately.

54.04.01: Interest rate risk

The Company’s exposure to changes in interest rates relates to the Company’s outstanding floating rate liabilities. Most of the Company’s outstanding liability is on fixed rate basis and hence not subject to interest rate risk. Some of the borrowings of the Company are linked to rate benchmarks such as Bank Marginal Cost of Funds based Lending Rate (MCLR) or Secured Overnight Financing Rate (SOFR), RBI Repo Rate, Treasury Bill Linked Lending Rate (TBLR) and Mumbai InterBank Overnight Indexed Swap (MIOIS) and hence subject to interest rate risk. The Company hedges interest rate risks of foreign currency borrowings through derivative transactions. The sensitivity of the Company’s floating rate borrowings to change in interest rate (assuming all other variables constant) is given below:

Fair value sensitivity analysis for fixed rate instruments

The Company’s fixed rate instruments are carried at amortised cost and are not measured for interest rate risk, as neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates.

Inter-Bank Offered Rate (IBOR) reform

The U.S. Dollar LIBOR bank panel ended on June 30, 2023, and therefore the exposure with the Company was transitioned from LIBOR to SOFR. There was no exposure to IBOR risk as at March 31, 2026 and March 31, 2025.

54.04.02: Foreign currency risk

Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency fluctuation risk for its foreign currency borrowing. The Company’s borrowings in foreign currency are governed by RBI Direction External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019 (as and when updated) which requires entities raising External Commercial Borrowings (ECB) for an average maturity of less than 5 years to hedge minimum 70% of the its ECB exposure. The Company hedges its entire ECB and external commercial bond exposure as per Board approved hedging policy and resource mobilisation policy. The Company manages foreign currency risk by entering in to cross currency swaps and forward contract. When a derivative is entered in to for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match with the terms of the hedge exposure. The Company holds derivative financial instruments such as cross currency interest rate swap to mitigate risk of changes in exchange rate in foreign currency and floating interest rate. The Counterparty for these contracts is generally a bank. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in market place. Refer note 21 and 22 for terms and conditions of foreign currency borrowings.

The Company’s hedging policy only allows for effective hedge relationships to be established. 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 exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness.

Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the designated component value of the hedging instrument exceeds on an absolute basis the change in value of the hedged item attributable to the hedged risk. In such cases, ineffectiveness may arise if:

(a) The critical terms of the hedging instrument and the hedged item differ (i.e. nominal amounts, timing of the forecast transaction, interest resets changes from what was originally estimated), or

(b) Differences arise between the credit risk inherent within the hedged item and the hedging instrument.

There were no ineffectiveness recognised in the statement of profit and loss.

There were no other sources of ineffectiveness in these hedge relationships.

Ý5« REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES (ROC)

All charges or satisfaction are registered with ROC within the statutory period for the financial years ended March 31, 2026 and March 31, 2025. No charges or satisfactions are yet to be registered with ROC beyond the statutory period.

Ý5^ COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31, 2026 and March 31, 2025.

COMPLIANCE WITH APPROVED SCHEME(S) OF ARRANGEMENTS

The Company has not entered into any new scheme of arrangements during the financial years ended March 31, 2026 and March 31, 2025.

KM UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM

The Company as part of its normal business, grants loans and advances, makes investment, provides guarantees to and accept deposits and borrowings from its customers, other entities and persons. These transactions are part of Company’s normal non-banking finance business, which is conducted ensuring adherence to all regulatory requirements.

Other than the transactions described above, no funds have been 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 persons or entities, 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 also not received any fund from any parties (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 funding party (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

Ý5» UNDISCLOSED INCOME

There are no transactions that are not recorded in the books of accounts for the financial years ended March 31, 2026 and March 31, 2025.

ITEMS OF INCOME AND EXPENDITURE OF EXCEPTIONAL NATURE

There are no items of income and expenditure of exceptional nature for the financial years ended March 31, 2026 and March 31, 2025 other than those disclosed in note 41.

DISCLOSURE ON MODIFIED OPINION, IF ANY, EXPRESSED BY AUDITORS, ITS IMPACT ON VARIOUS

⁶¹ FINANCIAL ITEMS AND VIEWS OF MANAGEMENT ON AUDIT QUALIFICATIONS

The auditors have expressed an unmodified opinion on the standalone financial statements of the Company for the financial years ended March 31, 2026 and March 31, 2025.

CORPORATE GOVERNANCE REPORT CONTAINING COMPOSITION AND CATEGORY OF

⁶² DIRECTORS, SHAREHOLDING OF NON-EXECUTIVE DIRECTORS, ETC.

The corporate governance report containing composition and category of directors, shareholding of non-executive directors is part of the annual report for the financial years ended March 31, 2026 and March 31, 2025.

KM DSA COMMISSION

Transaction Costs in the nature of Direct Selling Agent commission mainly pertaining to the Two-Wheeler loans were treated as upfront expenditure, considering the relatively shorter tenure and the overall materiality involved.

Consequent to the increase in the estimated Two-Wheeler portfolio, these transaction costs have been considered as a part of cash flows for estimation of effective interest rate (EIR) for loans granted from January 01, 2026. Accordingly, the transaction costs are not treated as an upfront expenditure and have been amortised at EIR over the loan tenure. Consequently, fees and commission expenses and interest income is lower by Rs. 51.50 crores and Rs. 2.52 crores respectively for the year ended on March 31, 2026. The impact of changes in estimates is not material in the opinion of the management.

DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in crypto currency or virtual currency during the financial years ended Mari 31, 2026 and March 31, 2025.

|67| DETAILS OF BENAMI PROPERTY HELD

No proceedings have been initiated or pending against the Company for holding any benami property under the Benai Transactions (Prohibition) Act, 1988 (45 of 1988) as amended in 2016 and rules made thereunder; in the financial yea ended March 31, 2026 and March 31, 2025.

Km WILFUL DEFAULTER

The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in t] financial years ended March 31, 2026 and March 31, 2025.

₇₀ DISCLOSURE REGARDING AUDITOR’S REMUNERATION DISCLOSED UNDER LEGAL AND PROFESSIONAL FEES

In addition to the auditor’s remuneration shown in note 40 - Other expenses, the Company has also incurred auditor’s remuneration in connection with audit and related statutory services to be performed by auditors in connection with issue of senior secured notes of Rs. Nil (March 31, 2025: Rs. 0.60 crores) shown under legal and professional charges in the same note referred above.

|7^ SEGMENT REPORTING

The Company is primarily engaged in the business of financing and there are no separate reportable segments identified as per the Ind AS 108 - Operating segments.

i) Information about geographical areas

The Company operates within India. Therefore it neither generates any revenue from outside India (except dividend) nor have any non-current asset located outside India (except investments in shares held at FVTOCI) for the financial years ended March 31, 2026 and March 31, 2025.

ii) Information about major customers

No single external customer contributes 10% or more to the revenues of the Company for the financial years ended March 31, 2026 and March 31, 2025.

|7^ TRANSFER OF FINANCIAL ASSETS

72.01: Transferred financial assets that are not derecognised in their entirety

The following table provides a summary of financial assets that have been transferred in such a way that part or all of the transferred financial assets do not qualify for derecognition, together with the associated liabilities.

WHISTLE- BLOWER COMPLAINTS

There were no whistle blower complaints received by the Company during the financial years ended March 31, 2026 and March 31, 2025.

Disclosure pursuant to SEBI circular SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023 on framework for fund raising by issuance of fund raising by large corporates (LCs)

|79B shortfall in fund raising by issuance of debt securities

During the financial year ended March 31, 2026, there was a shortfall in meeting the prescribed requirement under the framework for fund raising through issuance of debt securities by large borrowers. The shortfall was primarily due to the Company’s strategy of utilising surplus liquidity carried as of March 31, 2025, thereby reducing incremental borrowings from the domestic debt capital markets.

Market conditions, including interest rate volatility and limited depth for non-AAA rated issuers during major part of the year, also impacted issuances. Subsequent to the year-end, the Company has received credit rating upgrade to AAA and expects to progressively align with the prescribed requirements during the current financial year.

EVENTS AFTER REPORTING DATE

The Board of Directors at its meeting held on December 19, 2025 approved the issuance of 471,121,055 fully paid-up equity shares of face value of Rs. 2/- each fully paid-up on a preferential basis to MUFG Bank Ltd. (“MUFG”), a company incorporated under the laws of Japan at a price of Rs. 840.93 per share (including a premium of Rs. 838.93 per share) (“Issue Price”) for an amount aggregating to Rs. 39,617.98 crores representing 20% of the post equity share capital on a fully diluted basis (“Preferential Issue”). An ‘Investment Agreement’ in this regard was executed between, among others, the Company and MUFG on the same date. The requisite resolutions were approved by the shareholders at the extraordinary general meeting on January 14, 2026.

Upon receipt of necessary statutory and regulatory approvals, on April 08, 2026, the Board of Directors of the Company approved the allotment of 471,121,055 fully paid-up equity shares of face value of Rs. 2/- each fully paid-up at an issue price on a preferential basis to MUFG on receipt of the subscription amount of Rs. 39,617.98 crores in terms of the Investment Agreement dated December 19, 2025. Pursuant to the allotment of equity shares, MUFG has become a minority public shareholder of the Company representing 20% equity stake on a fully diluted basis and the paid-up equity share capital of the Company stood increased on April 08, 2026 from Rs. 376.31 crores comprising of 1,881,565,371 equity shares of Rs. 2/- each fully paid to Rs. 470.54 crores comprising of 2,352,686,426 equity shares of Rs. 2/- each fully paid up. The proceeds are being utilised as per the objects of the preferential issue.

DISCONTINUED OPERATIONS

The Company had no discontinuing operations during the financial years ended March 31, 2026 and March 31, 2025.

Disclosures pursuant to RBI Direction - RBI/DOR/2025-26/359 DOR.ACC.REC.No.278/21.04.018/2025-26 Reserve Bank of India (Non-Banking Financial Companies - Financial Statements: Presentation and Disclosures) Directions, 2025 dated November 28, 2025 as amended.

Note: These disclosures are guided by the RBI Direction - RBI/DOR/2025-26/347DOR.CRE.REC.No.266/07-01-008/2025-26 - Reserve Bank of India (Non-Banking Financial Companies- Credit Facilities) Directions, 2025 dated November 28, 2025, as amended from time to time. Revised framework relating to lending against gold and silver collateral has been adopted from April 01, 2026.

82.02: Disclosure related to project finance

The Company has not lent any funds for project finance activities during the financial years ended March 31, 2026 and March 31, 2025 nor has any recoverable balance as at the same dates.

Note: The above disclosure is guided by the RBI Directions RBI/DOR/2025-26/357 DOR.STR.REC.276/21.04.048/2025-26 Reserve Bank of India (Non-Banking Financial Companies - Resolution of Stressed Assets) Directions, 2025 and RBI/ DOR/2025-26/347 DOR.CRE.REC.266/07-01-008/2025-26 - Reserve Bank of India (Non-Banking Financial Companies-Credit Facilities) Directions, 2025 both dated November 28, 2025, as amended from time to time.

(vi) Institutional set-up for liquidity risk management

Refer note 54.01.01: Risk management structure and 54.03: Liquidity risk and funding management for institutional set-up for liquidity risk management.

Notes:

1) Significant counterparty is defined as a single counterparty or group of connected or affiliated counterparties accounting in aggregate for more than 1% of the total liabilities.

2) 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 total liabilities.

3) Total liabilities has been computed as sum of all liabilities (Total of balance sheet less total equity).

4) 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 five years from the date of issue.

5) Other short-term liabilities include all short-term borrowings other than commercial papers and nonconvertible debentures with original maturity less than one year.

6) The amount stated in this disclosure is based on the audited financial statements for the financial year ended March 31, 2026 and March 31, 2025.

(ii) Exchange traded interest rate (IR) derivatives:

The Company has not entered into any exchange traded Interest Rate (IR) derivatives.

(iii) Disclosures on risk exposure in derivatives Qualitative disclosures

The Company has a Board approved policy in dealing with derivative transactions. Derivative transaction consists of hedging of foreign exchange transactions which includes interest rate and currency swaps, interest rate options and forwards. The Company undertakes derivative transactions for hedging on-balance sheet assets and liabilities. Such outstanding derivative transactions are accounted on accrual basis over the life of the underlying instrument. The ALCO and RMC closely monitors such transactions and reviews the risks involved.

The Company has entered into derivative agreement to mitigate the foreign exchange risk and interest rate risk pertaining to external commercial borrowings, term loans from banks and institutions and bonds borrowed in foreign currency. The description of risk policies and risk mitigation strategies are disclosed in note 54.

DISCLOSURE REQUIREMENTS FOR NBFCs- MIDDLE LAYER (NBFCs-ML) AND UPPER LAYER ⁸³ NBFCs-UL) (Contd.)83.06: Exposures

(i) Details of financing of parent company products

The Company does not have any parent company, hence not applicable.

(ii) Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the Company

The Company has not exceeded the prudential exposure limits for Single Borrower Limit (SGL)/ Group Borrower Limit (GBL) during the financial years ended March 31, 2026 and March 31, 2025.

(iii) Unsecured advances

The Company has not granted unsecured advances against collateral of intangible securities such as charge over the rights, licenses or authority during the financial years ended March 31, 2026 and March 31, 2025.

83.07: Details of penalties and strictures imposed by RBI and other regulatorsYear ended March 31, 2026

The Company has received an order on July 11, 2025 from RBI imposing a penalty of Rs. 270,000/- for non-compliance with certain provisions of RBI Digital Lending Directions which were observed during statutory inspection with reference to its financial position as on March 31, 2024. The penalty was paid on July 16, 2025.

The total penalties paid for the financial year 2025-26 is Rs. 270,000/-.

Year ended March 31, 2025

The Company had received an order on February 14, 2025 from RBI imposing a penalty of Rs. 580,000/- for noncompliance of certain RBI directions which were observed during statutory inspection with reference to its financial position as on March 31, 2023. The penalty was paid on February 25, 2025.

The Company had paid fine of Rs. 23,600/- on August 30, 2024 in connection with delay in submission of notice of record date under Regulation 60(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for purpose of payment of principal with interest on certain privately placed non-convertible debentures of erstwhile SCUF (amalgamated with the Company w.e.f. April 01, 2022).

The Company had paid a fine of Rs. 2,360/- on August 30, 2024 in connection with delay in intimation of payment of interest under Regulation 57(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for purpose of payment of interest on privately placed non-convertible debentures of erstwhile SCUF (amalgamated with the Company w.e.f. April 01, 2022).

The total penalties paid for the financial year 2024-25 was Rs. 605,960/-.

These penalties have no material impact on financial, operation or other activities of the Company. The Company has already taken corrective measures, as necessary, to align its operations/ procedures with the applicable regulations.

83.08: Breach of covenant

There were no instances of default or breaches of covenants in respect of loans availed or debt securities issued during the financial years ended March 31, 2026 and March 31, 2025.

83.09: Divergence in Asset Classification and Provisioning

The RBI has neither assessed any additional provisioning requirements in excess of 5% of the reported profits before tax and impairment loss on financial instruments for the financial year ended March 31, 2025, nor identified any additional Gross NPAs in excess of 5% of the reported gross NPAs for the said period.

DISCLOSURE REQUIREMENTS FOR NBFCs- MIDDLE LAYER (NBFCs-ML) AND UPPER LAYER ⁸³ NBFCs-UL) (Contd.)

83.23: Currency Options

The Company does not have any transactions in the designated currency options on the exchanges recognised by SEBI. Kfl CONSOLIDATED FINANCIAL STATEMENTS

Investment in subsidiary company is carried at cost as per Ind AS 27- Separate Financial Statements and have been consolidated as per Ind AS 110- Consolidated Financial Statements. Refer Consolidated Financial Statements (CFS).

Disclosures pursuant to Master Direction RBI/DOS/2024-25/120 DOS.CO.FMG.SEC.No.7/23.04.001/2024-25 on Fraud Risk Management in Non-Banking Financial Companies (NBFCs) dated July 15, 2024

Disclosures pursuant to RBI notification no. RBI/DOR/2025-26/364 DOR.SFG.REC.No.283/30.01.021/2025-26 on Reserve Bank of India (Non-Banking Financial Companies - Climate Finance and Management of Climate Change Risks) Directions, 2025 dated November 28, 2025 as amended

₈₆ DISCLOSURE OF PORTFOLIO LEVEL INFORMATION ON THE USE OF FUNDS RAISED FROM GREEN

⁸⁶ DEPOSITS

The Company has not raised any funds from green deposits during the financial years ended March 31, 2026 and March 31, 2025. |87| PREVIOUS YEAR COMPARATIVES

The figures for the previous year have been regrouped/ rearranged wherever necessary to conform to the current year presentation. There are no significant regroupings/ reclassification for the year under report.