Note 12.1: Management had acquired possession of these properties in satisfaction of the debts and intends to dispose them in due course, subject to conducive market conditions. These properties have been valued taking into consideration various factors such as location, facilities & amenities, quality of construction, percentage of completion of construction (as for some properties the construction is currently on hold), residual life of building, business potential, supply & demand, local nearby enquiry, market feedback of investigation and ready recknor published by government. These valuations has been performed

by an independent registered valuer registered under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The fair values are based on market values, being the estimated amount for which a property could be exchanged in an arm's length transaction. These properties are not depreciated as they have not been ready to use.

Note 12.2: In respect of residential flats located in Mumbai, the Maharashtra Real Estate Regulatory Authority (MAHARERA) has passed an order directing the developer to hand over the possession of the flats along with compensation for the delay. The developer has preferred an appeal against this Order and the matter is pending before the Maharashtra Real Estate Regulatory Appellate Tribunal (MAHAREAT).

Note 12.3: Investment property under construction represent rights acquired by the Company in properties which are under construction. These rights are in respect of constructed area in the properties located in prime areas in Mumbai and are part of the projects of recognized real estate developers and not by the Company. Accordingly, disclosures in terms of paragraph WB(vi) of general instructions for preparation of Balance Sheet prescribed in Division III of Schedule III to the Companies Act, 2013 are not made. The Company and the concerned parties are in the process of registering the documents by which the Company has acquired the title over the Investment properties under construction. The acquisitions of these rights in the properties were in the normal course of the business and none of the promoters, directors or their relatives are associated with these transactions in any manner.

a) The aforementioned is based on the responses received by the Company to its inquiries with suppliers with regard to applicability under the MSMED Act.

b) Dues to micro and small enterprises which have not been discharged beyond the specified date under the MSMED Act, as such enterprises have not provided proof of payment of Goods and Services tax to the Company or dues have been held back under the defect / retention clause of the agreement are not reported in the above table as such dues are not considered as due for payment. In addition, no provision for interest is made on such dues.

(a) The Non Convertible Debentures are secured by way of first pari-passu charge on immovable property, current assets, book debts, loans and advances including receivables other than those specifically charged.

(b) Non Convertible Debentures - Includes redeemable non-convertible debenture which carries call and put option of '600 Crores (from December 04, 2025).

(c) During the year, the Company has borrowed ' 2,809.91 Crores (equivalent to US$ 325 million) under Global Medium Term Note Programme. These are secured by way of all rights, titles, interest, benefits, claims and demands, whatsoever of the Company in, to and in respect of, all present and future, receivables/assets, including Company's accounts, operating cash flows, current assets, book debts, stock in trade, loans and advances and receivables, both present and future to the extent of complying with the Security Coverage Ratio, but excluding the Ineligible Assets.

(d) During the year, the Company has borrowed ' 870.15 Crores (equivalent to US$ 100 million) under Global Medium Term Note Programme. These are secured by way of all rights, titles, interest, benefits, claims and demands, whatsoever of the Company in, to and in respect of, all present and future, receivables/assets, including Company's accounts, operating cash flows, current assets, book debts, stock in trade, loans and advances and receivables, both present and future to the extent of complying with the Security Coverage Ratio, but excluding the Ineligible Assets.

(a) These loans are secured by way of a first pari-passu charge over the current assets in the form of receivables, book debts, bills, outstanding monies receivables including future movable assets, other than those specifically/ exclusively charged.

(b) During the previous year, the Company borrowed ' 614.48 Crores (equivalent to US$ 75 Million) under External commercial borrowing. These are secured by way of a first ranking pari passu charge by way of hypothecation on all the borrower's charged asset in favour of the security holder in accordance with the Deed of Hypothecation.

(c) During the previous year, the Company borrowed ' 410.25 Crores (equivalent to US$ 50 Million) under External commercial borrowing. These are secured by way of first ranking pari passu against all receivables/current assets of the borrower including book debts/ receivables with both present and future but excluding book debt/receivables pertaining to capital market exposure and securitised asset .

(d) During the previous year, the Company borrowed ' 410.11 Crores (equivalent to US$ 50 Million) under External commercial borrowing. These are secured by way of first ranking pari passu charge over all receivables/current assets of the borrower including book debts/ receivables both present and future and which are "standard assets" but excluding book debt/receivables pertaining to capital market exposure and securitised assets.

(e) During the previous year, the Company borrowed ' 416.68 Crores denominated in Japanese Yen (equivalent to US$ 50 Million) under External commercial borrowing. These are secured by way of first ranking pari passu charge on all present and future standard loan receivables (excluding the receivables given on exclusive charge, if any), book debts, loan and advances and current assets of the borrower.

(iii) Rights attached to equity shares

The Company has issued only one class of equity shares having a par value of ' 2.00/- per share. Each holder of the equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. During the year ended March 31,2025, equity shareholders were paid dividend of ' Nil per share (previous year ' 4.00/- per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

** The change in percentage is due to dilution of share capital due to allotment under ESOP scheme(s).

(vi) During the period of five years immediately preceding the balance sheet date, the Company has not issued any shares without payment being received in cash or by way of bonus shares or shares bought back.

(vii) Shares reserved for issue under options and contracts/ commitments for sale of shares/ disinvestments, including the terms and amount: Refer note 40 for details of shares reserved for issue under employee stock option plan of the Company.

(viii) Pursuant to the Board of Directors approval dated March 13, 2024, for issue of equity shares up to by way of rights issue ('Rights Issue") for an amount not exceeding ' 1,500.00 Crores, the Company had filed Letter of Offer on April 17, 2024. The issue opened for subscription on April 30, 2024, and closed on May 14, 2024. The SIC Committee on May 17, 2024, approved the allotment of 4,23,94,270 fully paid-up equity shares at a price of ' 300.00/- per equity share (including premium of ' 298.00/- per equity share) aggregating to ' 1,271.83 Crores to the eligible shareholders and the same was allotted on May 17, 2024.

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.

There is no change in the methods and assumptions used in preparing the sensitivity analysis from previous years.

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 & attrition rate are in line with the industry practice considering promotion and demand and supply of the employees.

Maturity analysis of benefit payments is undiscounted cashflows 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.

Expected Rate of Return taken same as discount rate as described in Indian Accounting Standard 19.

Expected Contribution in the next year is considered as the sum of net liability/assets at the end of the current year and current service cost for next year, subject to maximum allowable contribution to the Plan Assets over the next year as per the Income Tax Rules.

Value of asset is considered as fair value of plan asset for the period of reporting.

Qualitative disclosures Characteristics of defined benefit plan

During the year, there were no plan amendments, curtailments and settlements.

The entity has a defined benefit gratuity plan in India (funded). The entity’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 a trust 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.

A separate trust fund is created to manage the Gratuity plan and the contributions towards the trust fund is done as guided by rule 103 of Income Tax Rules, 1962.

Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the following risks:

Interest rate 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.

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.

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.

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.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance entity and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

** During the year the Company has paid ' 1.33 Crores (previous year ' 0.27 Crores) to the auditors towards certification required for Public Issue of Non Convertible Debentures & Secured Global Medium Term Notes Programme and the same has been amortized over the tenure of the borrowings.

NOTE 35. EXCEPTIONAL ITEMS

The Company had certain AIF investments that were due to mature in June 2024. In March 2024, the Company requested the AIF to do in-specie distribution of assets (i.e.: debentures of underlying SPV companies) in lieu of its investment in the AIF. Subsequently, these debentures were assigned to an ARC, and the book value of the resulting Security Receipts (SRs), based on the same underlying assets as of September 30, 2024, was ' 586.50 Crores. The RBI Circular dated December 19, 2023, on "Investments in Alternative Investment Funds (AIFs)" required a 100% provision of AIF investments if they were not liquidated within 30 days of the circular being applicable. To comply with the spirit of this circular, the management has decided to make a provision equivalent to 100% of the book value of these SRs, accordingly the same has been disclosed under exceptional items for year.

Financial Statements

NOTES FORMING PART OF THE STANDALONE FINANCIAL STATEMENTS

AS AT AND FOR THE YEAR ENDED MARCH 31,2025

(' in Crores)

(' in Crores)

NOTE 37. EARNINGS PER SHARE

Basic and diluted Earnings per share ("EPS") computed in accordance with Ind AS 33 “Earnings per share"

* Due to anti-dilutive effect, basic and diluted EPS are same for the year ended March 31,2025.

IIFL FINANCE LIMITED

NOTE 38. RISK MANAGEMENT

The Company’s activities expose it to market risk, liquidity risk and credit risk.

Risk management is integral to Company's strategy. The comprehensive understanding of risk management throughout the various levels of an organization aids in driving key decisions related to risk-return balance, capital allocation and product pricing. The Company operates under the guidance of the Board approved risk appetite statement that covers business composition, guidance around gross stage 3 assets and net stage 3 assets, leverage, funding and liquidity, etc.

Additionally, it is also ensured that appropriate focus is on managing risk proactively by ensuring business operations are in accordance with laid-down risk. A strong risk management team and an effective credit operations structure ensures that risks are properly identified and timely addressed, to ensure minimal impact on the Company’s growth and performance.

Risk Management Structure

The Company has established multi-level risk governance for monitoring and control of product and entity level risks. 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 is empowered to develop an independent risk strategy comprising of principles, frameworks, policies and limits and ensuring its effective implementation. Independent function of Risk management is in place headed by the Chief Risk Officer (""CRO"") who reports to the Managing Director and independently to RMC of the Board. The Risk department primarily operationalises risk management framework approved by RMC.

The Company has a well defined risk framework constituting various lines of defence - the first line of defence, consisting of Business Functions who own and manage risk. They ensures adequate managerial and supervisory controls to ensure compliance and highlight inadequate processes and unexpected events. The Company has well-defined internal control measures in every process.

Independent risk and policy team, Compliance and other control functions constitutes second line of defence which is responsible for identification and assessment of entity-wide risks. Post its identification, it aims to mitigate risks either through portfolio trigger and caps (Credit risk) or through ongoing risk control and self assessment (Operational risk).

Internal Audit function is the third line of defence that independently reviews activities of the first two lines of defence and reports to the Audit Committee of the Board.

Risk Management Practices

The Company has developed the necessary competency to identify early stress signals and has also defined processes, including corrective and remedial actions as regards people and processes, for mitigation to ensure minimum damage. A stress testing mechanism is put in place to carry out the event based sensitivity analysis and identify the accounts under stress due to expected market movement. In event of susceptibility to external triggers, appropriate risk mitigation would be undertaken and thereby minimize the losses to the Company.

It has initiated a detailed portfolio quality review mechanism which enables analysis of portfolio along various behavioural, demographic and financial parameters. Additionally, through tie-ups with external bureaus, an analysis of collection performance coupled with continuous credit assessment for various key segments is undertaken. The practices aid in proactive course correction thereby modifying credit or sourcing mechanisms, if required. Additionally, application scorecard has been developed enabling the Company to standardise credit underwriting and improve sourcing quality in the long run.

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 pertaining to different type of risks are identified, analysed and tested on timely basis. The same is presented to RMC at periodic intervals.

In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as cross currency interest rate swaps are entered to hedge certain foreign currency risk exposures and variable interest rate exposures.

The Company’s central Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as policies covering

specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and nonderivative financial instruments and investment of excess liquidity. 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.

NOTE: 38A.1. CREDIT RISK

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

Credit risk arises primarily from financial assets such as loans, trade receivables, investments, derivative financial instruments, and other receivables.

Credit Quality Analysis

The following tables sets out information about the credit quality of financial assets measured at amortized cost. Unless specifically indicated, for financial assets, the amounts in the table represent gross carrying amounts.

Financial assets measured using simplified approach

The Company follows 'simplified approach’ for recognition of impairment loss allowance on cash and cash equivalents, bank balances, trade receivables, other receivables and other financial assets. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

38A.2. COLLATERAL HELD

The Company holds collateral and other credit enhancements against certain of its credit exposures. The loans are collateralised against equitable mortgage of property, pledge of shares, hypothecation of assets, company personal guarantees, physical gold, undertaking to create security.

38A.3. LOSS ALLOWANCE AND EXPOSURE AT DEFAULT

The following table shows movement of the loss allowance on loans and advances:

Contractual amount outstanding on financial assets that were written off (net of recovery) during the reporting period is '604.34 Crores (previous year ' 279.32 Crores)

38A.5. MODIFIED FINANCIAL INSTRUMENTS

For financial assets, such as a loan to a customer, when the terms and conditions have been renegotiated to the extent that the modification does not result in cash flows that are substantially different (thereby not resulting into derecognition), the Company has disclosed carrying amount of modification gain/ loss based on discounted cash flow basis in the below table:

38A.6. CREDIT RISK GRADING OF LOANS

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.

The Company ensures effective monitoring of credit facilities through a portfolio quality review framework. As per this process, an asset is reviewed at a frequency determined based on the risk it carries at the review date. For effective risk management, the Company monitors its portfolio, based on product, underlying security and credit risk characteristics.

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. An independent risk and policy team reviews adherence to policies and processes on a periodic basis.

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 various products/states/customer base with a cap on maximum limit of exposure for an individual/Group. Accordingly, the Company does not have concentration risk.

38B LIQUIDITY RISK

Liquidity risk refers to the risk that the Company may not be able to meet its short-term financial obligations. The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of credit lines. Further, the Company has well defined Asset Liability Management (ALM) framework with an appropriate organizational structure to regularly monitor and manage maturity profiles of financial assets and financial liabilities including debt financing plans, cash and cash equivalent instruments to ensure liquidity. The Company seeks to maintain flexibility in funding mix by way of sourcing the funds through money markets, debt markets and banks to meet its business and liquidity requirements.

(ii) The Company does not have any outstanding variable rate loans given and hence there is no impact on Profit & loss account due to any such change.

38C.2. EXPOSURE TO CURRENCY RISKS

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign currency borrowings taken from Financial Institutions, External Commercial Borrowings (ECB) and foreign bond markets.

(i) The Company has hedged its foreign currency exposure through Forwards/ Future and / or Cross Currency Interest Rate Swaps in such a manner that it has fixed determinate outflows in its functional currency and as such there would be no significant impact of movement in foreign currency rates on the Company's profitability. However for the unhedged foreign currency exposure(s) there would be an impact on Company's profitability.

* Holding all other variables constant,the sensitivity on profit and loss is due to the timing & cahflow differences between the hedged financial instrument and hedging financial instrument. On the date of maturity of the forward exchange contract & foreign currency borrowings, the sensitivity of profit and loss to changes in the exchange rates will be nil, hence for these contracts - impact is presented under other comprehensive income.

The following table analyses financial instruments measured at fair value at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorized. The amounts are based on the values recognized in the statement of financial position.

38E.2. VALUATION METHODOLOGIES OF FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

I Quoted equity/ debt instruments are measured based on the closing price in the recognised stock exchange and are classified as level 1.

I Quoted mutual funds are measured based on the published net asset value (NAV) by AMFI and are classified as level 1.

I Government Securities are valued based on the closing price in the recognized stock exchange and are classified as level 1.

I Unquoted debt securities are measured based on average of security level prices received from AMFI appointed/ designated agencies viz: CRISIL and ICRA and are classified as level 2.

I Fair value of forward foreign exchange contracts is determined by computing present value of payoff between contractual rate (strike) and forward exchange rates at the testing date and are classified as Level 2.

I Alternate investment funds and unquoted mutual funds are measured based on the latest NAV provided by the fund house and are classified as level 3.

I Equity instruments in non-listed entities are initially recognized at transaction price and re-measured (to the extent information is available) and valued by external independent valuer and classified as Level 3.

I Fair value of loans measured at FVOCI approximates its carrying value and are classified as level 3.

I Security Receipts (SR) are measured as Level 3 basis rating given by independent rating agencies to the asset reconstruction companies (ARC) on the NAV declared by the ARC of these security receipts or based on a fair value report of a registered valuer registered under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017.

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

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term nature, the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and bank balances, Trade receivables, other receivables, balances other than cash and cash equivalents, other financial assets and trade payables, other payables and other financial liabilities.

Loans, debts, borrowings and subordinated debts

The fair values of these instruments are estimated by determining the price of the instrument taking into consideration the origination date, maturity date, coupon rate, actual or approximation of frequency of interest payments and incorporating the actual or estimated/proxy yields of identitical or similar instruments through the discounting factor. For instruments, having contractual residual maturity or original maturity less than one year, the carrying value has been considered as fair value. Fair values of Loans and advances are presented net of provisions for impairment.

38G. TRANSFERRED FINANCIAL ASSETS THAT ARE RECOGNIZED IN THEIR ENTIRETY:

The Company uses securitization as a source of finance. Such transaction resulted in the transfer of contractual cash flows from portfolios of financial assets to holders of issued debt securities. Such deals resulted in continued recognition of the securitized assets since the Company retains substantial risks and rewards. The table below outlines the carrying amounts and fair values of all financial assets transferred that are not derecognized in their entirety and associated liabilities.

(a) The Company has filed appeal against the said demands raised by the Income Tax Department.

(b) Amount paid under protest with respect to income tax demand is ' 76.32 Crores (previous year ' 76.32 Crores).

(c) Amount paid under protest with respect to service tax demand ' 1.55 Crores (previous year ' 1.55 Crores) and with respect to GST demand ' 2.03 Crores (previous year ' 2.03 Crores).

(d) Amount paid under protest with respect to profession tax demand ' 0.05 Crores (previous year ' 0.05 Crores).

(e) Guarantees has been given on behalf of a subsidiary.

(f) The Company had received demand towards stamp duty on account of the Composite Scheme of Arrangement.The demand had been raised for a sum of ' 75.00 Crores. As per the scheme document any incidental expenses will be borne by the resulting companies i.e IIFL Finance Limited, IIFL Securities Limited and 360 ONE WAM Limited (formerly known as IIFL Wealth Management Limited) equally. The Company has appealed against the same and paid ' 8.34 Crores under protest towards its share of the liability and shown ' 16.66 Crores as Contingent.The matter is pending before the court.

(g) Apart from the above, Company is subject to legal proceedings and claims which have arisen in the ordinary course of the business. The Company's management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have material and adverse effect on the Company's financial position.

NOTE 40. EMPLOYEE STOCK OPTION

The Company has implemented Employee Stock Option Scheme 2008 (ESOP Schemes) and has outstanding options granted under the said Schemes. The options vest in graded manner and must be exercised within a specified period as per the terms of the grants made by the Nomination and Remuneration Committee and ESOP Schemes.

Stock price: The closing market price on NSE one day prior to the date of grant has been considered for the purpose of option valuation.

Volatility: The daily volatility of the stock prices on BSE, over a period prior to the date of grant, corresponding with the expected life of the Options has been considered to calculate the fair value.

Risk-free rate of return: The risk-free rate being considered for the calculation is the India Government Bond Generic Bid Yield with a maturity about equal to the expected life of the options.

Exercise price: Price of each specific grant has been considered.

Time to maturity: Time to Maturity / Expected Life of Options is the period for which the Company expects the Options to be live. The minimum life of a stock option is the minimum period before which the Options cannot be exercised and the maximum life is the period after which the Options cannot be exercised.

Expected dividend yield: Expected dividend yield has been calculated as an average of dividend yields for the three financial years preceding the date of the grant. The dividend yield for the year is derived by dividing the dividend per share by the average price per share of the respective period.

The Company has granted Employee Stock Options under IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme pursuant to aforesaid Composite Scheme of Arrangement.

Fair value methodology:

The fair value of the shares are measured using Black scholes formulae. Measurement inputs include share price on measurement date, exercise date of the instrument, exercise price, expected life, risk free interest rate, dividend yield, expected volatility .

Stock price: The fair value of stock as on Appointed Date, i.e., April 1,2018 ("the Effective date" or the "Date of Modification") has been used to value the outstanding grants based on Merchant Banker's Report.

Volatility: The daily volatility of the stock prices on BSE, based on post demerger traded prices, has been considered to calculate the fair value.

Risk-free rate of return: The risk-free rate being considered for the calculation is the India Government Bond Generic Bid Yield with a maturity about equal to the expected life of the options.

Exercise price: Price of each specific grant has been considered based on equity swap ratio of the Composite Scheme of Arrangement.

Time to maturity: Time to Maturity / Expected Life of Options is the period for which the Company expects the Options to be live. The minimum life of a stock option is the minimum period before which the Options cannot be exercised and the maximum life is the period after which the Options cannot be exercised.

Expected dividend yield: Expected dividend yield has been calculated as an average of dividend yields for the three financial years preceding the date of the grant. The dividend yield for the year is derived by dividing the dividend per share by the average price per share of the respective period.

NOTE 41. ADDITIONAL DISLCOURES:

(ii) Registration of charges or satisfaction with registrar of companies (ROC)

There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

(iii) Compliance with number of layers of companies:

The clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to the Company.

(iv) Utilization of borrowed funds and share premium

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

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

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

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

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

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

(v) Undisclosed income

The Company has disclosed all its Income appropriately and in the ongoing Tax Assessments as well there has not been any such undisclosed income recognised by the relavant tax authorities.

(vi) Details of crypto currency or virtual currency

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

(vii) Disclosure of benami property

The Company does not possess any benami property under the Benami Transactions (Prohibition) Act, 1985 and rules made thereunder.

(viii) Disclosure of borrowings

(a) The quarterly returns and statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

(b) The Company has utilized the borrowings from banks and financial institutions for the specific purpose for which it was taken as at March 31,2025.

(ix) Wilful defaulter

The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

(x) Title deeds of immovable properties not held in name of the Company

Title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

(xi) Disclosure on loans and advances

The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment, to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person.

NOTE 42: On March 04, 2024, the Reserve Bank of India (RBI), under Section 45L(1)(b) of the Reserve Bank of India Act, 1934, directed the Company to cease the sanctioning or disbursing of new gold loans and the assignment, securitization, or sale of existing gold loans with immediate effect.

As part of their process RBI initiated a Special Audit by an Independent Professional agency & concluded the same. The Company has taken necessary measures to address the identified concerns and prevent their recurrence. Subsequent to this RBI on September 19, 2024 after a careful examination of the submissions made and the remedial actions taken by the Company, conveyed its decision to lift the said restrictions with immediate effect. The Company has since then commenced its normal business operations.

NOTE 43: During January 2025, the Income Tax Department conducted a search under the provisions of the Income Tax Act, 1961, at the registered office and other premises of the Company. The Company has extended full cooperation to the authorities and continues to provide all information, documents, and clarifications as requested. As of the date of these financial statements, the Company has not received any communication from the Department regarding the outcome of the search. Accordingly, the potential financial impact, if any, arising from the search proceedings cannot be ascertained at this stage.

NOTE 44.3 During the year, the Company paid remuneration to the Managing Director in accordance with the terms duly approved by the Board of Directors and the Shareholders, subject to the limits prescribed under Schedule V to the Companies Act, 2013. The Company has inadequate profits for the FY 2024-2025. Consequently, the remuneration paid to the Managing Director exceeded the limits specified under Schedule V, by ' 9.88 crores. The Board of Directors has ratified the payment at its meeting and has proposed the matter for Shareholders’ approval by way of a special resolution at the forthcoming Annual General Meeting. Pending such approvals, the remuneration paid has been accounted as expense for the year. In accordance with provision contained in section 197(9) of the Act, the excess remuneration is held by the Managing Director in trust for the Company pending such approval.

NOTE 45.1. REASON FOR SHORTFALL: The Company had contributed towards the ongoing projects to IIFL Foundation Limited and which remained unspent as on March 31,2025 and March 31,2024. The unspent amount has been transferred to a separate Bank account.

NOTE 45.2. In respect of other than ongoing projects, for the financial year 2023-24, the Company had transferred unspent amount of ' 0.01 Crore to the PM Cares Fund, a fund specified in Schedule VII to the Companies Act, on June 04, 2024 i.e. within a period of six months of the expiry of the financial year 2024.

NOTE 45.3. The Company contributes its CSR requirement to India Infoline Foundation Limited, a group Company.

(c) Disclosures on Risk Exposure in Derivatives:

(I) Qualitative disclosure:

The Company’s activities expose it to the financial risks of changes in foreign exchange rates and interest rates. The Company uses derivative contracts such as foreign exchange forward, cross currency contracts, interest rate swaps, foreign currency futures, options and swaps to hedge its exposure to movements in foreign exchange and interest rates. The use of these derivative contracts reduces the risk or cost to the Company and the Company does not use those for trading or speculation purposes.

The Company uses hedging instruments that are governed by the policies of the Company which are approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the risk management strategy of the Company. The Finance Committee and Asset Liability Management Committee (ALCO) of the Board is entrusted with the management and monitoring of risks in derivatives.

To hedge its risks on the principal and/ or interest amount for foreign currency borrowings on its balance sheet, the Company has currently used cross currency derivatives, forwards and principal only swaps. Additionally, the Company has entered into Interest Rate Swaps (IRS) to hedge its interest rate risk on the floating rate foreign currency borrowings.

Derivative financial instruments are initially measured at fair value on the contract date and are subsequently re-measured to fair value at each reporting date. Derivatives are classified as assets when the fair value is positive (positive marked to market value) or as liabilities when the fair value is negative (negative marked to market value). Fair value of derivatives is ascertained from the mark to market and accrual values received from the counterparty banks. Changes in the fair value of future cash flows of these contracts that are designated and effective as hedges are recognized directly in "Cash Flow Hedge Reserve" under Other Equity and the ineffective portion is recognized immediately in the Statement of Profit and Loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, no longer qualifies for hedge accounting or the Company chooses to end the hedging relationship.

(a) The above excludes direct equity and debt investment in own subsidiary companies.

(viii) Pursuant to Regulation 30 and 51 of the Listing Regulations (as amended from time to time) read with Para A of Part A of Schedule III of the Listing Regulations,the Company paid a penalty of ' 0.01 Crores each to both the Stock Exchanges on which the Company is listed, i.e. BSE and NSE, regarding penal action for non-submission of the financial results for FY 2023-2024 within the stipulated timelines of sixty days from the year end prescribed under Listing Regulations.The Company due to operational issues had to delay the Board meeting and had well in advance intimated the same to stock exchanges for an extension. Apart from this no penalty has been imposed during the year by RBI or other regulators.

(x) No registration has been obtained from other financial regulators.

(xi) The disclosures as required by the Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation)

Directions, 2023 dated February 27, 2025 as may be amended from time to time and Disclosures in Financial statement-

Notes to Accounts as issued by RBI

a. No draw down from reserves have been done during the year.

b. The Company does not have any overseas assets.

c. The Company does not have any off balancesheet SPV sponsored .

d. The Company does not have any parent company hence details of Financing of parent company is not applicable.

e. No revenue recognition has been postponed.

f. Auditors have not expressed modified opinion on the audited financial statements.

g. The Company had certain AIF investments that were due to mature in June 2024. In March 2024, the Company requested the AIF to do in-specie distribution of assets (i.e.: debentures of underlying SPV companies) in lieu of its investment in the AIF. Subsequently, these debentures were assigned to an ARC, and the book value of the resulting Security Receipts (SRs), based on the same underlying assets as of September 30, 2024, was ' 586.50 Crores. The RBI Circular dated December 19, 2023, on "Investments in Alternative Investment Funds (AIFs)" required a 100% provision of AIF investments if they were not liquidated within 30 days of the circular being applicable. To comply with the spirit of this circular, the management has decided to make a provision equivalent to 100% of the book value of these SRs, accordingly the same has been disclosed under exceptional items for the year ended March 31,2025.

h. There has been no breach in terms of covenants in respect of loans availed by the Company or debt securities issued by the Company including incidence of default.

i. There is no divergence in asset classification and provisioning norms.

j. The Company has not financed any advances for which intangible securities such as charges over rights, Licences, authorities etc. has been taken.

k. The Company has not given loans to Entities associated with directors and their relatives and Senior Officers and their relatives, however Details of loan given to director and their relative is disclosed in Note no. 44 of the Financial statement.

l. There are no prior period items which are impacting company’s current year profit and loss.

(xii) The Company during the year ended has not exceeded single borrower limit (SGL)/ group borrower limit (GBL) while

performing its lending operations.

49. UNHEDGED FOREIGN CURRENCY EXPOSURE:

The unhedged foreign currency exposure as on March 31,2025 is ' 2.66 Crores (previous year ' 1.87 Crores).

50. GOLD LOAN PORTFOLIO

As on March 31,2025 the gold loan portfolio comprises 43.60 % (previous year 34.92 %) of the total assets of the Company.

51. SEGMENT REPORTING

The Company’s primary business segments are reflected based on the principal business carried out, i.e. financing. All other activities of the Company revolve around the main business. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment. As such, there are no separate reportable segments as per the IND AS 108 on 'Segment Reporting’.

52.SHARED SERVICES

The Company operates from and uses the premises, infrastructure and other facilities and services as provided to it by its group companies, which are termed as 'Shared Services’. Hitherto, such shared services consisting of administrative and other revenue expenses paid for by the Company were identified and recovered/recoverable from them based on reasonable management estimates, which are constantly refined in the light of additional knowledge gained relevant to such estimation. These expenses are recovered on an actual basis and the estimates are used only where actual were difficult to determine.

53.FRAUD

During the year under review, the Company had come across frauds totaling to ' 2.55 Crores (previous year ' 6.66 Crores) in respect of its lending operations. Out of the above, frauds amounting to ' 0.06 Crores (previous year ' 0.20 Crores) has already been recovered. Suitable action has been taken by the Company to recover the balance amounts.

(vi) Institutional set-up for Liquidity Risk Management

The Board of Directors of the Company has an overall responsibility and oversight for the management of all the risks, including liquidity risk, to which the Company is exposed to in the course of conducting its business. The Board approves the governance structure, policies, strategy and the risk limits for the management of liquidity risk.

The Board of Directors approves the constitution of the Risk Management Committee (RMC) for the effective supervision, evaluation, monitoring and review of various aspects and types of risks, including liquidity risk, faced by the Company.

Further, the Board of Directors also approves constitution of Asset Liability Committee (ALCO), which functions as the strategic decision-making body for the asset-liability management of the Company from risk return perspective and within the risk appetite and guard-rails approved by the Board.

The main objective of ALCO is to assist the Board and RMC in effective discharge of the responsibilities of asset-liability management, market risk management, liquidity and interest rate risk management and also to ensure adherence to risk tolerance/limits set up by the Board.

ALCO provides guidance and directions in terms of interest rate, liquidity, funding sources, and investment of surplus funds. ALCO board meetings are held once in a quarter or more frequently as warranted from time to time.

Qualitative Disclosure

Liquidity Coverage Ratio (LCR) aims to ensure that NBFC’s maintains an adequate level of unencumbered High Quality Liquidity Asset (HQLAs) that can be converted into cash to meet liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario.

The Company has robust liquidity risk management framework in place that ensures sufficient liquidity including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events,including those involving the loss or impairment of both unsecured and secured funding sources. The Company has implemented the LCR framework and has maintained LCR well above the regulatory threshold.

HQLA comprises of unencumbered Bank Balances, Cash in Hand and Liquid Investments after appropriate haircut. The Company maintains sufficient balance of Cash and Bank Balance and liquid Investments which can be easily liquidated in times of stress.

Liquidity Coverage Ratio results drive by inflow of next 30 days receivable on loans and advances and corresponding outflow over the next 30 days towards borrowings and other liabilities.