(i) During the year, there was no change in the business model under which the Company holds financial assets and therefore no reclassifications were made due to change in business model.

(ii) During the year, the Company has sold certain loans classified under amortised cost as part of Direct assignment classified under amortised cost for liquidity and recovery management strategy of the Company. Such sale of loans will not lead to change in business model as per the Company’s board approved policy and management’s evaluation of business model.

(iii) Loans or Advances in the nature of loans granted to promoters, directors, KMPs and related parties (other than as disclosed in note 45) as defined under Companies Act, 2013 either severally or jointly with any other person, that are:

(a) Repayable on demand - Nil (Previous year: Nil)

(b) Without specifying any terms or period of repayment - Nil (Previous year: Nil)

(iv) Refer note 45(3) for the receivables from Related Parties.

(v) Refer Note 49.3 for stage wise classification of loan assets and expected credit loss movement.

71 During the year, the Company disposed of its investments in certain wholly owned subsidiaries, namely Piramal Systems & Technologies Private Limited, Piramal Securities Limited, and PEL Finhold Private Limited, by way of sale to Piramal Investment Advisory Services Private Limited, wholly owned subsidiary, for an aggregate consideration of H19.11 crores. The transaction resulted in a net gain of H3.11 crores.

7.2 During the year ended March 31, 2024, Piramal Dutch IM Holdco BV (“PDIMBV”), a non-operative, non-material wholly owned subsidiary, had completed its liquidation, based upon the struck off confirmation received from Netherlands Chamber of Commerce on September 08, 2023. Accordingly, PDIMBV ceases to be a wholly-owned subsidiary of the Company.

7.3 During the year ended March 31, 2024, Piramal International (“PINT”), a non-operative, non-material wholly owned subsidiary, had completed its liquidation, based upon the struck off confirmation received from Director of Insolvency Service at Mauritius on September 21, 2023. Accordingly, PINT ceases to be a wholly-owned subsidiary of the Company.

7.4 Based on review of internal and external factors, the management has reassessed the assumptions, strategy and business model pertaining to its overall exposure in Real Estate fund management business. The recoverable amount of the Company’s investment in equity shares of Piramal Fund Management Private Limited of H63.61 crores as at March 31, 2024 has been determined based on a value in use calculation as per the requirements of Ind AS 36 determined by the Company. The projected cash flows used reflect the management’s assessment of the net cash flows available to the Company from the operations of the subsidiary. It was concluded that the fair value less costs of disposal did not exceed the value in use. As a result of this analysis, management had recognised an impairment charge of H44.65 crores towards investments in equity shares of the subsidiary (recorded under ‘Other expense’ in the statement of profit or loss); Fair value loss of H105 crores towards investments in preference shares of the said subsidiary (recorded under ‘Net gain on fair value changes’ in the statement of profit or loss) and expected credit loss allowance of H110.16 crores towards loans outstanding from the said subsidiary (recorded under ‘Impairment on financial instruments’ in the statement of profit or loss). Accordingly, the Company had recognised impairment loss / FVTPL loss / expected credit loss aggregating to H259.82 crores.

Further, during the year ended March 31, 2025, the Administrative Committee of the Board of Directors of the Company at its meeting held on March 26, 2025 approved conversion of i) Inter-Corporate Deposit (‘ICD’) having an outstanding amount of H115.87 crores provided to Piramal Fund Management Private

7 INVESTMENTS (Contd.)

Limited (‘PFMPL’), a wholly owned subsidiary of the Company and ii) 0.01% Cumulative Optionally Convertible Participative Preference Shares (‘OCRPS’) of H100/- each held by the Company in PFMPL of H115 crores, into equity shares of PFMPL.

Further, pursuant to the conversion of ICD and OCRPS as mentioned above, the FVTPL loss / expected credit loss aggregating to H226.98 crores have been reversed and reclassified as provision for impairment in subsidiary’s investment during the year ended March 31, 2025.

7.5 (i) Government securities of H8.00 crores (Previous Year: 5 crores) is pledge for triparty repo dealing

and settlement (TREPS).

(ii) During the current year, with effect from April 01, 2024, the Company changed its business model for managing its portfolio of government securities (G-Sec) Previously, the objective was to hold these loans to collect contractual cash flows. The new objective is to invest for the purpose of holding the securities to collect contractual cash flows and for selling on the basis of market conditions. This change reflects a strategic decision to enhance capital efficiency and liquidity. Consequently, the Company has re-classified these investments in portfolio of G-Sec of carrying amount of H446.16 crores on April 01, 2024 from amortised cost to FVTOCI measurement category. This reclassification did not result in any material fair value gain.

7.6 Mutual funds of H9.35 crores (Previous Year: Nil) are lien marked against securitised borrowings

7.7 During the year ending March 31, 2025, the Company has invested in 1,60,00,00,000 equity shares through a right issue at a face value of H10 each, aggregating to H1,600 crores into its wholly owned subsidiary, its wholly owned subsidiary, Piramal Finance Limited (Formerly known as “Piramal Capital & Housing Finance Limited”)

7.8 Viridis Infrastructure Investment Managers Private Limited has been strucked off March 19, 2025.

7.9 During the year ended March 31, 2024, the Company had sold its entire stake in Shriram Finance Limited for a net consideration of H4,788.58 crores resulting in profit of H854.68 crores which had been recorded under "Net gain on fair value changes.”

During the current year there was increase in scope/design of the Projects in progress pertaining to "Project - Right to Name” on account of which there has been change in timelines and project cost. Further, there are no intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan during the previous year.

Refer Note 41B for the contractual capital commitments for purchase of Property, plant & equipment. & Intangible assets

There has been no revaluation of property, plant and equipment and intangible assets during the year ended March 31, 2025 and March 31, 2024.

The Company holds the title deeds of all the immovable properties in its name.

The coupon rates for the above loans are 7.50% -10.70% p.a (Previous Year:7.99% - 10.40 % p.a))

The Company has utilised funds borrowed from banks and financial institutions for the purpose for which it was taken.

Refer Note 60 for assets hypothecated/mortgaged as securities against the Secured Borrowings

*“Movable* Assets" shall mean all standard Receivables of the Borrower (both present and future), including without limitation;

(a) Receivables arising out of lending loans and advances; and

(b) Receivables arising out of its investments (including non-convertible debenture excluding investments made in the nature of equity investments), inter-corporate deposits; and

(c) current assets and/or financial assets; save and except any Receivables arising out of its investments made or loan extended by the Borrower to its subsidiaries or Affiliates;

(b) The company has not allotted any equity shares as bonus shares.

(c) Shares bought back:

During the financial year ended March 31, 2024, the Board of Directors at its meeting held on July 28, 2023, approved buyback of equity shares of the company of up to 1,40,00,000 number of Equity Shares of face value of H2/- each representing 5.87% of the pre-buyback fully paid up equity shares at a price of H1,250 per share aggregating to H1,750 crores, through the tender offer route. Company extinguished those shares on September 18, 2023, and accordingly, the issued and paid up capital stands reduced by H2.80 Crores and Securities Premium by H1,747.20, respectively. Further, the Company has incurred buy back expenses of H12.91 crores, tax on buy-back of H405.22 crores and created Capital Redemption Reserve of H2.80 crores, which have been adjusted from Securities Premium.

(v) Terms and Rights attached to equity shares

The Company has one class of equity shares having a par value of H2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company uses hedging instruments as part of its management of interest rate risk associated with investment in floating rate bonds. For hedging interest rate risk, the Company uses interest rate swaps which is also designated as cash flow hedges. To the extent these hedges are effective; the changes in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amount recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects Statement of profit or loss (e.g. interest payments).

Share options outstanding account is created as required by Ind AS 102 ‘Share Based Payments’ on the Employee Stock Option Scheme. 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 group in pursuance of the Employee Stock Option Plan.

During the year ended March 31, 2024, to cover for any possible uncertainties in the near future, the Company had created additional management overlay provision on certain real estate wholesale portfolio aggregating to H300 crores. This had been duly approved by the Sustainability and Risk Management Committee and the Board of Directors of the company. The total management overlay as on March 31, 2024 stood at H323 crores (including continuing provisions of H23 crores created in FY 2022-23)

Further, during year ended March 31, 2025, H213.95 crores has been released as per the policy laid down. Accordingly, as of March 31, 2025, the management overlay stood at H109.05 crores.

The amount of long term capital loss on which DTA is not created is H81.63 crores. This loss is allowable to be carried forward till AY 2033-34

The amount of remaining business loss on which DTA is not created is H496.71 crores. This loss is allowable to be carried forward till AY 2031-32

The tax rate used for the reconciliations above is the corporate tax rate of 25.17% for the financial year 2024-25 and 2023-24

In assessing the realizability of deferred tax assets, the Company considers the extent to which it is probable that the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry-forwards become deductible. The Company considers the expected reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this, the Company believes that it is probable that the Company will realize the benefits of these deductible differences.

39 EARNINGS PER SHARE (EPS)

In accordance with Ind AS 33 ‘Earnings per share’, Basic EPS is calculated by dividing the profit / loss 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 profit / (loss) 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.

Notes:

1 Vide Demand dated June 05, 1984, the Government has asked for payment to the credit of the Drugs Prices Equalisation Account, the difference between the common sale price and the retention price on production of Vitamin ‘A’ Palmitate (Oily Form) from January 28, 1981 to March 31, 1985 which was not accepted by the Company. The Company was legally advised that the demand is untenable.

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

3 During the year, the Company received demand order of H1,502 crores relating to Slump Sale ‘Business Undertaking’of Pharma business by the Company to Piramal Pharma Limited in Financial Year 2021. The Company reasonably expects to have a favourable outcome of getting the Order set aside.

4 The Company’s pending cases are primarily proceedings pending with Income Tax, Goods & Services Tax & Central / State Excise / Service Tax / Customs authorities. The Company has also 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 Company is not in a position to ascertain the timing of possible cash outflow, however the outcome of these proceedings is not expected to have a materially adverse effect on its Standalone Financial Statements.

42 SEGMENT REPORTING

In accordance with Ind AS 108 ‘Operating Segments’, the Company is primarily engaged in the business of lending and investing. Also, based on the geographic information analysis, the Company’s revenues and assets by the country of domicile, all the Company’s revenues and assets are based in India. Accordingly, there are no separate reportable segmental information in accordance with Ind AS 108 - Operating Segments as notified u/s 133 of the Companies Act, 2013.

Further, no single customer represents 10% or more of the Company’s total revenue for the year ended March 31, 2025 and March 31, 2024.

43 INVESTMENT PROPERTY

Investment property, recorded at a carrying value of H675 crores (Previous Year: H675 crores), consists of land development rights for real estate property located in suburban in Mumbai, without any restriction on its realisability and is being held for capital appreciation and eventual monetization by exploring various options.

In accordance with Ind AS 113, the fair value of investment property is determined by the Company at H675 crores (Previous Year: H675 crores) following the risk-adjusted discounted cash flow method and based on Level 3 inputs from an independent accredited valuation expert, as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 with relevant valuation experience for similar properties/ rights. The main inputs used in determining fair valuation are area available for development, location, construction cost, demand, weighted-average cost of capital and current real estate prices of real estate market at the location. Refer note 47 for Fair valuation approach and methodology.

As at March 31, 2024, the Company had reviewed the saleable area and other underlying assumptions based on current market conditions and discussions with the authorities. Resultantly, impairment loss of H660.31 crores had been recognised. Based upon the current market conditions considered in the valuation report obtained by the Company as at March 31, 2025, no further impairment was required to be recognised.

Direct operating expenses (including repairs and maintenance) arising from investment property that did not generate rental income during the year is Nil (Previous Year: H26.85 crores)

44 DISCLOSURE PURSUANT TO IND AS 116

The Company’s significant operating lease arrangements are mainly in respect of office premises. These lease arrangements are for a period range 3 to 5 years and are in most cases renewable by mutual consent, on mutually agreeable terms.

II. Disclosures for defined benefit plans based on actuarial valuation reports:

The Company has scheme for gratuity as part of post retirement plan. The Company has a defined benefit gratuity plan in India which is funded. The Company’s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund.

The fund is managed by Employees Group Gratuity Trusts which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy.

Gratuity is payable as per company’ scheme as detailed in the report.

Actuarial gains/losses are recognized in the period of occurrence under Other Comprehensive Income (OCI). All above reported figures of OCI are gross of taxation.

Salary escalation and attrition rate are considered as advised by the company; they appear to be in line with the industry practice considering promotion and demand and supply of the employees.

Maturity Analysis of Benefit Payments is undiscounted cash flows considering future salary, attrition & death in respective year for members as mentioned above

Average Expected Future Service represents Estimated Term of Post - Employment Benefit Obligation.

Weighted Average Duration of the Defined Benefit Obligation is the weighted average of cash flow timing, where weights are derived from the present value of each cash flow to the total present value.

Any benefit payment and contribution to plan assets is considered to occur end of the year to depict liability and fund movement in the disclosures.

These plans typically expose the Company to the following actuarial risks:

Investment risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Interest risk

A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

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 generally reduces ALM risk

Mortality Risk

Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

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 will increase the plan’s liability.

47 FAIR VALUE DISCLOSURES

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.

The Company determines fair values of its financial instruments according to the fair value hierarchy as explained in Note 2(A)(iv).

This note describes the fair value measurement of financial instruments.

The Company’s valuation framework includes:

• Benchmarking prices against observable market prices or other independent sources;

• Development and validation of fair valuation models using model logic, inputs, outputs and adjustments.

• Use of fair values as determined by the derivative counter parties.

These valuation models are subject to a validation before they become operational and are continuously calibrated. The Company ensures that the fair values are in compliance with the requirements of Indian Accounting Standards.

i . Investments in quoted instruments are fair valued using quoted prices or closing Net Asset Value

(NAV), with the appropriate adjustments as required by Ind AS 113.

ii. Investments in Alternative Investment Funds (including those covered in RBI Circular as explained in Note 51) and Security Receipts is valued basis the Net Asset Value (NAV), with appropriate adjustments as required by Ind AS 113. The Company obtains valuation of the Security Receipts on a 6-monthly basis as permitted under regulatory requirements.

iii. Valuation has been determined by using discounted cash flow method on the basis of the contractual cash flows. The discounting factor used has been arrived at after adjusting the rate of interest for the financial assets by the difference in the government securities rates from date of initial recognition to the reporting dates.

iv. Fair values of borrowings are based on discounted cash flow using a current borrowing rate. They are classified as Level 3 values hierarchy due to the use of unobservable inputs, including own credit risk. The discounting factor used has been arrived at after adjusting the rate of interest for the financial liabilities by the difference in the government securities rates from date of initial recognition to the reporting dates.

v. Fair value of Government Securities, T-Bills, and CROMS has been determined based on market quotes or prices published by FBIL/CCIL

i nvestments in subsidiaries and joint venture companies are measured at cost less provision for impairment, if any and therefore the above disclosure is not applicable for the same.

*The fair value of investment and loans at amortised cost is gross of impairment/ECL provisions, excluding stage 3 which are shown are presented as net of impairment /ECL provision

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

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 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% 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. Refer Note 54 for capital adequacy and debt equity ratio. Refer Note 23.9 for dividend paid and proposed by the Company.

49 RISK MANAGEMENT

Risk Management is an integral part of the Company’s business strategy. The Risk Management oversight structure includes Committees of the Board and Management Committees. Company’s risk philosophy is to develop and maintain a healthy portfolio which is within its risk appetite and the regulatory framework. While the Company is exposed to various types of risks, the most important among them are liquidity risk, interest rate risk, credit risk, regulatory risk and fraud and operational risk. The measurement, monitoring and management of risks remain a key focus area for the Company.

The Audit Committee of the Board provides direction to and monitors the quality of the internal audit function and also monitors compliance with RBI and other regulators.

The Company’s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with market best practices.

The Sustainability & Risk Management Committee of the Board (“SRMC”) reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyse risk exposure and provides oversight of risk across the organization. The SRMC nurtures a healthy and independent risk management function to inculcate a strong risk management culture in the Company and broadly perceives the risk arising from (i) credit risk, (ii) liquidity risk, (iii) interest rate risk and (iv) fraud risk and operational risk (v) regulatory risk

49.1 Liquidity risk

Liquidity Risk refers to insufficiency of funds to meet the financial obligations. Liquidity Risk Management implies maintenance of sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit lines to meet obligations when due.

The Company has formulated an Asset Liability Management Policy in line with RBI guidelines for NonBanking Financial Company. The Asset Liability Management Committee (ALCO) is responsible for the management of the companies funding and liquidity requirements. The company manages liquidity risk by maintaining sufficient cash and marketable securities, unutilised banking facilities, credit lines and by continuously monitoring forecast and actual cash flows, and by assessing the maturity profiles of financial assets and liabilities. The liquidity risk and funding function are managed by the Company’s treasury team under liquidity risk management framework through various means like HQLA, liquidity buffers, sourcing of long-term funds, positive asset liability mismatch, keeping strong pipeline of sanctions from banks and assignment of loans to counter liquidity situation under the guidance of ALCO and Board.

The following tables detail the Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the rate applicable as of March 31, 2025 and March 31, 2024 respectively has been considered.

RBI vide circular No. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 has issued guidelines on liquidity risk framework for NBFCs. It covers various aspects of Liquidity risk management such as granular level classification of buckets in structural liquidity statement, tolerance limits thereupon, and liquidity risk management principles. The Company has a Asset Liabilities Management Guidelines which covers liquidity risk management policy, strategies and practices, liquidity coverage ratio (LCR), stress testing, maturity profiling, liquidity risk measurement, interest rate risk and liquidity risk monitoring framework.

The Company exceeds the regulatory requirement of LCR which mandate maintaining prescribed coverage of expected net cash outflows for a stressed scenario in the form of high quality liquid assets (HQLA). Refer note 62 (xxix) for LCR disclosures. LCR requirement have moved to 100% from December 01, 2024.

The Company has the undrawn credit lines available as at the end of the year (refer note 3)

The following tables details the Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the rate applicable as of March 31, 2025 and March 31, 2024 respectively has been considered. The contractual maturity is based on the earliest date on which the Company may be required to pay.

49.2 Interest rate risk and sensitivity analysis

The Company is exposed to interest rate risk as it has assets and liabilities based on both fixed and floating interest rates. The Company has an approved Asset and Liability Management Policy which empowers the Asset and Liability Management Committee (ALCO) to assess the interest rate risk run by it and provide appropriate guidelines to the Treasury to manage the risk. The ALCO reviews the interest rate risk on periodic basis and decides on the asset profile and the appropriate funding mix. The ALCO reviews the interest rate gap statement and the interest rate sensitivity analysis.

The sensitivity analysis below have been determined based on the exposure to interest rates for assets and liabilities at the end of the reporting period. For floating rate assets and liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year and the rates are reset as per the applicable reset dates. The basis risk between various benchmarks used to reset the floating rate assets and liabilities has been considered to be insignificant.

The exposure of the Company’s borrowings to the interest rate risk at the end of the year for variable rate borrowing is of H5,148.51 crores (Previous Year: H4,512.88 crores) and fixed rate borrowings are H3,302.35 crores (Previous Year: H3,358.16 crores)

49.3 Credit risk

The Company is exposed to credit risk through its lending activity. Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

For both Wholesale & Retail business, a ‘Risk Management Policy’ is in place which oversees credit risk. The Company’s Risk management team has developed proprietary internal risk rating models to evaluate the credit risk for the loans and investments made by the Company. The output of traditional credit rating model is an estimate of probability of default. For wholesale business, the Company’s proprietary risk rating models are different from the traditional credit rating models as they integrate both probability of default and loss given default into a single model.

Credit risk management

Credit risk for retail is managed through models and credit policies for various products. Credit risk management for wholesale is achieved by considering various factors like:

• Promoter strength - This is an assessment of the promoter from financial, management and performance perspective.

• Industry & micro-market risk - This is an assessment of the riskiness of the industry and/or micro-market to which the borrower/project belongs

• Project risk - This is an assessment of the standalone project from which interest servicing and principal repayment is expected to be done.

• Structure risk - This is an assessment of the loan structure which is characterized by its repayment tenor, moratorium, covenants, etc.

• Security cover - This is an assessment of the value of the security under stress scenario which is further adjusted for factors like liquidity, enforceability, transparency in valuation etc. of the collateral.

• Micro Market- This is an assessment of the micro-market in which the underlying project is located

Each of the above components of the risk analysis are assigned a specific weight which differ based on type of loan. The weights are then used with the scores of individual components for conversion to a risk rating.

Further, a periodic review of the performance of the portfolio is also carried out by the risk team. The risk team adjusts the stress case considered during the initial approval based on actual performance of the deal, developments in the sector, regulatory changes etc. The deal level output is combined to form a portfolio snapshot. The trends from portfolio are used to provide strategic inputs to the management.

The credit risk on liquid funds and other financial instruments is limited because the counterparties are banks with high credit-ratings assigned credit-rating agencies or mutual funds.

Provision for expected credit loss

The Company has assessed the credit risk associated with its financial assets for provision of Expected Credit Loss (ECL) as at the reporting dates. The Company makes use of various reasonable supportive forward looking parameters which are both qualitative as well as quantitative while determining the change in credit risk and the probability of default. These parameters have been detailed out in Note No. iii of Material Accounting Policies. Based on the result yielded by the above assessment the Financial assets are classified into (1) Standard (Performing) Asset, (2) Significant Credit Deteriorated (Under-Performing) Asset (3) Default (Non-Performing) Asset (Credit Impaired).

For the purpose of expected credit loss analysis the Company defines default as any asset with more than 90 days overdues. This is also as per the rebuttable presumption provided by the standard.

The Company has developed a PD Matrix after considering some parameters which have been stated below:

For provisioning on the wholesale financial assets, the key parameters for various scorecards are highlighted as follows -Real Estate products (Construction Finance, Structured Debt, LRD) - (1) Developer Grade (2) Past Overdue History (3) Remaining Tenure (4) Sales and collection deviations (5) Stage of the project (6) Geography etc. Some of the Parameters for Non Real Estate products (Senior lending, mezzanine, project finance etc) - (1) Sponsor strength (2) Overdues (3) Average debt service coverage ratio (4) Regulatory Risk (5) Stability of EBITDA (6) Quality of underlying assets etc. Based on these parameters the Company has computed the PD. The Company has also built in model scorecards to determine the internal LGD. However, due to lack of default history to statistically substantiate the internal LGD, the Company has made use of a combination of both internal as well as external LGD.

The Company uses ECL allowance for retail financial assets measured at amortised cost, which are not individually significant, and comprise of a large number of homogeneous loans that have similar characteristics. The expected credit loss is a product of exposure at default, probability of default (PD) and loss given default. Due to lack of sufficient internal data, the Company uses a mix of internal and external PD data from credit bureau agency (TransUnion for last 7 years) for potential credit losses. Further, the estimates from the above sources have been adjusted with forward looking inputs from anticipated change in future macro-economic conditions to comply with IndAS 109.

49.4 Regulatory risk:

The Company requires certain statutory and regulatory approvals for conducting business and failure to obtain retain or renew these approvals in a timely manner, may adversely affect operations. Any change in laws or regulations made by the government or a regulatory body that governs the business of the Company may increase the costs of operating the business, reduce the attractiveness of investment and/ or change the competitive landscape.

49.5 Fraud risk and operational risk:

Operational risk refers to the potential loss or disruption resulting from inadequate or failed internal processes, people, systems, or external events. It encompasses risks related to human error, technology failures, legal and compliance issues, and business continuity disruptions that can impact the operations of a finance company.

Operational Risk Management policy provides the structure and techniques that will facilitate consistent functioning of Operational Risk Management (ORM) framework. This Policy is focused on Operational Risk arising on account of People, Process, Systems, and external events. Company has Operational Risk Management Committee (ORMC) consisting of senior executives which monitors the ORM framework.

Fraud Risk Management policy focuses on prevention, detection, investigation of fraud and actions that Company should take in the event of fraud. Company has formulated Fraud Risk Management Committee (FRMC) consisting of senior executives. Company has also established a channel for employees to report frauds and related concern in timely manner.

The Company has a robust Risk Management framework to identify, measure and mitigate business risks and opportunities. This framework seeks to creates transparency, minimize adverse impact on the business strategy and enhance the Company’s competitive advantage. This risk framework thus helps in managing market, credit, operational and fraud risks and quantifies potential impact at a Company level.

The Company has an elaborate system of internal audit commensurate with the size, scale and complexity of its operations and covers funding operations, financial reporting, fraud control and compliance with laws and regulations.

49.6 Accounting for cash flow hedge

As at March 31, 2025, the Company has invested in floating rate government securities/bonds which are linked to treasury bill rate. For managing the interest rate risk arising from changes in treasury bill rate on such investments, the Company has entered into an interest rate swaps (IRS) for the investments. The Company has designated the IRS (hedging instrument) and the investment (hedged item) into a hedging relationship and applied hedge accounting.

Under the terms of the IRS, the Company receives interest at fixed rate and pays interest at the floating rate based on daily compounded overnight FBIL MIBOR. As the critical terms of the hedged item and the hedging instrument (notional, interest periods, underlying fixed rates) are not exactly matched, the Company uses the hypothetical derivative method to assess effectiveness. The interest cash flows of the hypothetical derivative and interest rate swap are off-setting, an economic relationship exists between the two. This ensures that the hedging instrument (interest rate swap) and hedged item (hypothetical derivative) have values that generally move in the opposite direction. The mismatch between the hedged item and the hedging instrument is a key source of ineffectiveness.

Hedge Effectiveness Testing is assessed at designation date of the hedging relationship, and on an ongoing basis. The ongoing assessment is performed at a minimum at each reporting date or upon a significant change in circumstances affecting the hedge effectiveness requirements, whichever comes first.

50 ASSETS HELD FOR SALE

(a) During the year ended March 31, 2023, on conclusion of a strategic review of its investments, the Company initiated identification and evaluation of potential buyers for its associate investments, Shriram Ll Holdings Private Limited, Shriram GI Holdings Private Limited and Shriram Investment Holdings Limited. The Company anticipated completion of the sale in foreseeable future and accordingly, investments amounting to H2,27754 crores in respect of these associates had been reclassified under ‘assets held for sale’

On reclassification, these investments have been measured at the lower of carrying amount and fair value less cost to sell.

(b) Shriram Investment Holdings Private Limited

In addition to point (a) above, during the year ended March 31, 2024, the Company has entered into share purchase agreement to sell its entire direct investment of 20% equity held in Shriram Investment Holdings Private Limited (formerly known as Shriram Investment Holdings Limited), classified as assets held for sale, to Shriram Ownership Trust, for a cash consideration of H1,439.89 crores. Accordingly, a gain of H870.69 crores is accounted in the books of the Company on completion of the transaction and classified under other operating income.

(c) Shriram Life Insurance Company Limited ('SLI') and Shriram General Insurance Company Limited ('SGI')

(i) Pursuant to the restructuring of Shriram Group in November 2022, the Company had received shares in multiple Shriram Group companies. It included Company's ownership of 20% in both Shriram GI Holdings Private Limited and Shriram LI Holdings Private Limited (Holding Companies). On receipt of these shares, the Company's intention was to dispose them off and hence were classified as ‘assets held for sale’. These Holding Companies own stakes in Shriram General Insurance Company Limited and Shriram Life Insurance Company Limited (Operating Companies) respectively. Further, during the year ended March 31, 2025, Shriram Group merged its Holding Companies into the respective Operating Companies, which has resulted in the Company's holding direct stakes in these Operating Companies.

Investment in SLI and SGI continue to meet the conditions to be classified as "Assets held for Sale” as the management remains committed to its active plan and pursuit to monetise these investments in near future. During the current year, owing to certain corporate events in Shriram group and regulatory approvals, which were beyond the control of the Company, caused delay in the monetisation.

(ii) The Company received dividend of H12.68 crores (Previous Year:H9.88 crores) and H44.77 crores (Previous Year: H39.70 crores) from Shriram Life Insurance Company Limited and Shriram General Insurance Company Limited respectively during the year ended March 31, 2025.

(iii) Based on valuation reports of independent external valuer, no impairment provision was required for the year ended March 31, 2025 on these investments.

51 REGULATORY AIF PROVISIONS

During the year ended March 31, 2024, the Company made regulatory provision of H365.00 crores in respect of investments in Alternative Investment Funds (AIFs) pursuant to the RBI circular dated December 19, 2023 and further clarifications vide RBI circular dated March 27, 2024. The same was disclosed under 'exceptional items' due to the nature and amount of provision. The Management remains confident of full recovery of the balance AIF investment.

During the year ended March 31, 2025, the Company has received H187.24 crores from AIF's redemptions which has been disclosed under "Other Operating Income" as a reversal of regulatory provisions. As a result, the outstanding regulatory provisions stood at H177.76 crores as of March 31, 2025. Prior to the adoption of the financial statements, the Company sought and obtained an opinion from the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI). Based on the recovery pattern, the EAC has opined that gain from such recoveries from AIFs should not be presented as exceptional items, in the Statement of Profit and Loss.

53 ADDITIONAL REGULATORY INFORMATION

i) Quarterly Asset cover statements submitted to Debenture and Security Trustee’s are in agreement with the books of accounts.

ii) There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the current year & previous year.

iii) No proceeding has been initiated during the year or pending against the Company for holding any Benami property.

iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

v) During the current year the Company has not traded or invested in Crypto currency or Virtual Currency.

vi) The Company have not been declared as a wilful defaulter by any bank or financial institution (as defined under Companies Act, 2013) or consortium thereof, in accordance with the guidance on wilful defaulters issued by Reserve Bank of India.

vii) 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.

viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

ix) The Company, has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

x) 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:

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

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

xi) The Company has advanced loans/ ICDs to its subsidiary companies. The disclosures pursuant to Regulation 53(f) and (Regulation 34(3) read with para A of Schedule V to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Refer note 45(4))

xii) The Company has not granted loan or advance in nature of loans to Related parties which are repayable on demand or without specifying terms/period of repayment

xiii) There have been no delays in transferring amounts required do be transferred to the Investor Education and Protection Fund by the Company. In one instance, transfer of unpaid dividend for financial year 2016-17 aggregating to H2.75 crores which was due on October 01, 2024, was paid on November 04, 2024. The delay was on account of persistent technical issues on the MCA portal.

During the year ended March 31, 2024, the security receipts issued to the Company by the Asset Reconstruction Company (ARC) towards consideration for transfer of stressed loans have not been rated by the ARC since the prescribed time period of six months in accordance to Reserve Bank of India circular RBI/2021-22/154 DOR.SIG.FIN.REC 84/26.03.001/2021-22 dated February 10, 2022 has not elapsed from the date of acquisition of loans by the ARC.

56 COMPOSITE SCHEME OF ARRANGEMENT FOR MERGER

The Board of Directors of the Company, in its meeting dated May 08, 2024, approved the Composite Scheme of Arrangement amongst the Company, PFL (the wholly owned subsidiary of the Company) and their respective shareholders and creditors under Sections 230 to 232 read with Section 52 and Section 66 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder (‘Scheme’). The Scheme was modified by the Administrative Committee of the Board of Directors of the Company at its meetings held on October 26, 2024 and April 09, 2025. The appointed date of the Scheme is April 01, 2024. The proposed accounting of the Scheme is in compliance with the requirements of the applicable Indian Accounting Standards.

RBI approval on Scheme was received on April 08, 2025 and the Company on April 10, 2025 has filed Application with the National Company Law Tribunal, Mumbai Bench (‘NCLT’). The Scheme will be given effect to once the same is approved by the NCLT and filed with the regulatory authorities.

58 FOREIGN CURRENCY RISK MANAGEMENT

The Company is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the Functional Currency. The Company has a detailed policy which includes setting of the recognition parameters, benchmark targets, the boundaries within which the treasury has to perform and also lays down the checks and controls to ensure the effectiveness of the treasury function, as applicable.

The Company has defined strategies for addressing the risks for each category of exposures. The centralised treasury function aggregates the foreign exchange exposure and takes prudent measures to hedge the exposure based on prevalent macro-economic conditions.

59 EMPLOYEE STOCK OPTION PLAN

The Company had formulated Employees’ Stock Ownership Plan - 2015 ("ESOP Scheme 2015”), under which, such eligible employees of the Company and its subsidiaries can exercise Stock Options that were vested in them under such ESOP Scheme 2015

The ESOP Scheme 2015 was approved by the Nomination and Remuneration Committee and the effective date of the same is March 31, 2023.

Under the ESOP Scheme 2015, 32,46,826 (Previous year: 18,21,487) stock options are granted on various grant dates, of which 17,61,032 (Previous Year: 14,04,690) stock options were granted to employees of group companies.

Method used to account for the Scheme

The Company recognises compensation expense relating to share based payments in accordance with Ind AS 102 Share-based Payment. Stock options granted by the Company are accounted as equity settled options. Accordingly, the estimated fair value of options granted that is determined on the date of grant, is charged to statement of Profit and Loss over the vesting period of options which is the requisite service period, with corresponding increase in the equity.

For Balance Sheet Reconciliation, refer note 23.8 of the financial statements

60 Loans, investments, cash & bank balances and investment property are mortgaged / hypothecated to the extent of H13,826.92 crores (Previous Year: H14,847.20 crores) as a security against secured borrowings as at March 31, 2025.

61 EVENTS AFTER REPORTING PERIOD

There have been no events other then referred in note 56 after the reporting date that require adjustment in these financial statements.

62 DISCLOSURES IN TERMS OF RBI/DOR/2023-24/106 DOR.FIN.REC.NO.45/03.10.119 /2023-24 - MASTER DIRECTION - RESERVE BANK OF INDIA (NON-BANKING FINANCIAL COMPANY - SCALE BASED REGULATION) DIRECTIONS, 2023 DATED OCTOBER 19, 2023 (AS UPDATED). (Contd.)

Qualitative disclosures

1 The Company has implemented the guidelines on Liquidity Risk Management Framework prescribed by the Reserve Bank of India requiring maintenance of Liquidity Coverage Ratio (LCR), which aim to ensure that an NBFC maintains an adequate level of unencumbered HQLAs that can used to meet its liquidity needs for the next 30 days under a significantly severe liquidity stress scenario.

2 LCR = Stock of High-Quality Liquid Assets (HQLAs)/Total Net Cash Outflows over the next 30 calendar days

3 For the purpose of HQLA, the company considers: (1) Unencumbered government securities (2) Cash and Bank Balances, (3) Floating rate bonds, (4) CROMS, (5) TREPS and (6) Treasury Bills

4 The cash inflows includes amount based on contractual basis for Loans & Advances that are standard in nature.

5 Other Contingent Funding Obligations includes the undisbursed loan amount only of those loans which have non-cancellable clauses.

6 The Liquidity Risk Management framework of the Company is governed by its Asset Liability Management Policy approved by the Board. The Asset Liability Management Committee (ALCO) oversee the implementation of liquidity risk management framework of the Company and ensure adherence to the risk tolerance / limits set by the Board.

7 As prescribed by the RBI Guidelines, Total net cash outflows are arrived after taking into consideration total expected cash outflows minus total expected cash inflows for the subsequent month

8 Total net cash outflows over the next 30 days = Stressed Outflows - [Min (stressed inflows; 75% of stressed outflows)].

9 Total expected cash outflows (stressed outflows) are calculated by multiplying the outstanding balances of various categories or types of liabilities by 115% (15% being the rate at which they are expected to run off further or be drawn down)

10 Total expected cash inflows (stressed inflows) are calculated by multiplying the outstanding balances of various categories of contractual receivables by 75% (25% being the rate at which they are expected to under-flow)

11 The Company has maintained healthy Liquidity Coverage Ratio (LCR) for the time period under consideration. The Company had LCR of 323.47% as of March 31, 2025, 247.42% as of December 31, 2024, 620.83% as of September 30, 2024 and 550.91.% as of June 30, 2024 which is higher than LCR mandated by RBI. The Company regularly reviews the maturity position of assets and liabilities and liquidity buffers, and ensures maintenance of sufficient quantum of High Quality Liquid Assets.

(c) Disclosures on Risk Exposure in Derivatives

Qualitative Disclosures

As at March 31, 2025, the Company has invested in floating rate government securities/bonds which are linked to treasury bill rate. For managing the interest rate risk arising from changes in treasury bill rate on such investments, the Company has entered into an interest rate swaps (IRS) for the investments. The Company has designated the IRS (hedging instrument) and the investment (hedged item) into a hedging relationship and applied hedge accounting.

Under the terms of the IRS, the Company receives interest at fixed rate and pays interest at the floating rate based on daily compounded overnight FBIL MIBOR. As the critical terms of the hedged item and the hedging instrument (notional, interest periods, underlying fixed rates) are not exactly matched, the Company uses the hypothetical derivative method to assess effectiveness. The interest cash flows of the hypothetical derivative and interest rate swap are off-setting, an economic relationship exists between the two. This ensures that the hedging instrument (interest rate swap) and hedged item (hypothetical derivative) have values that generally move in the opposite direction.

Hedge Effectiveness Testing is assessed at designation date of the hedging relationship, and on an ongoing basis. The ongoing assessment is performed at a minimum at each reporting date or upon a significant change in circumstances affecting the hedge effectiveness requirements, whichever comes first.

69 The Standalone financial statements have been approved for issue by Company’s Board of Directors on May 06, 2025.

70 The previous year’s figures have been regrouped / reclassified wherever necessary, to conform to the current year’s classification / presentation.