2.12 Provisions

Provisions are recognised when the enterprise has a
present obligation (legal or constructive) as a result
of past events, and it is probable that an outflow of
resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.

When the effect of the time value of money is material,
the enterprise determines the level of provision by
discounting the expected cash flows at a pre-tax rate
reflecting the current rates specific to the liability. The
expense relating to any provision is presented in the
standalone statement of profit and loss net of any
reimbursement.

2.13 Contingent Liabilities

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Company or a present obligation that is not recognized
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there
is a liability that cannot be recognized because it cannot
be measured reliably. The Company does not recognize
a contingent liability but discloses its existence in the
financial statement.

2.14 Earnings Per Share

The Company reports basic and diluted earnings per
share in accordance with Ind AS 33 on Earnings per
share. Basic EPS is calculated by dividing the net profit
or loss for the year attributable to equity shareholders
by the weighted average number of equity shares
outstanding during the year.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number
of shares outstanding during the year are adjusted for
the effects of all dilutive potential equity shares including
the treasury shares held by the Company to satisfy the
exercise of the share options by the employees. Dilutive
potential equity shares are deemed converted as of the
beginning of the period, unless they have been issued
at a later date. In computing the dilutive earnings per
share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases
loss per share are included.

2.15 Segments

Based on “Management Approach” as defined by Ind
AS 108, The Chief Operating Decision Maker (CODM)
evaluates the “Operating Segments”. Operating
segments are reported in a manner consistent with
the internal reporting provided to the CODM. The
accounting policies adopted for segment reporting are
in conformity with the accounting policies adopted for
the Company.

2.16 Significant accounting judgements, estimates and
assumptions

The preparation of financial statement in conformity with
the Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities
and the accompanying disclosure and the disclosure of
contingent liabilities, at the end of the reporting period.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates
are revised, and future periods are affected. Although
these estimates are based on the management’s best
knowledge of current events and actions, uncertainty
about these assumptions and estimates could result
in the outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future periods.

In particular, information about significant areas of
estimation, uncertainty and critical judgments in applying
accounting policies that have the most significant effect
on the amounts recognized in the financial statement is
included in the following notes:

2.17.1 Impairment of loans portfolio

The measurement of impairment losses across all
categories of financial assets requires judgement, in
particular, the estimation of the amount and timing of
future cash flows and collateral values when determining
impairment losses and the assessment of a significant
increase in credit risk. These estimates are driven by
a number of factors, changes in which can result in
different levels of allowances.

It has been the Company’s policy to regularly review
its models in the context of actual loss experience and
adjust when necessary.

2.17.2 Share-Based Payments

Estimating fair value for share-based payment
transactions requires use of an appropriate valuation
model. The Company measures the cost of equity-
settled transactions with employees using Black-
Scholes Model to determine the fair value of the options
on the grant date.

Inputs into the valuation model, includes assumption
such as the expected life of the share option, volatility
and dividend yield.

Further details used for estimating fair value for share-
based payment transactions are disclosed in Note 41.

2.18 Operating Cycle

Based on the nature of products/ activities of the
Company and the normal time between acquisition of
assets and their realisation in cash or cash equivalents,
the Company has determined its operating cycle as 12
months.

2.19 Foreign Currency

Foreign currency transactions are recorded on initial
recognition in the functional currency using the
exchange rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at
the exchange rate at the reporting date.

Exchange differences arising on the settlement or
translation of monetary items are recognised in
Standalone Statement of profit or loss in the year in
which they arise.

2.20 Recent Accounting Pronouncements

Ministry of Corporate Affairs (‘MCA’) notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended March
31, 2025, MCA has not notified any new standards or
amendments to the existing standards applicable to the
Company.

6.1 The Company's business model is to collect contractual cash flows, being the payment of Principal and Interest and
accordingly, the loans are measured at amortized cost.

6.2 Loans granted by the Company are secured or partly secured by one or a combination of the following securities:-
Registered/ equitable mortgage of property, Hypothecation of assets including Gold.

6.3 Loans where fraud has been committed and reported for the year is ' 3.51 million (March 31, 2024: ' Nil)

6.4 The Company has not provided any loans or advances to promoters, directors, KMPs and the related parties.

6.5 The Company has securitised certain term loans and managed servicing of such loan accounts. The carrying value of
these assets have not been de-recognised in the books. Refer Note 49 for securitised term loans not derecognised in
their entirety.

6.6 The Company has transferred certain stressed loans to Asset Reconstruction Company during the current year. Refer
Note 51 for Disclosure pursuant to RBI notification No. RBI/DOR/2021-22/86 DOR.STR.REC.51 /21.04.048/2021-22
dated September 24, 2021.

6.7 Unsecured Loans includes unsecured business loans which is guaranteed by Credit Guarantee Fund Trust for Micro and
Small Enterprises amounting to ' 0.32 Million (March 31, 2024: ' 2.27 Million).

14.4 8.57% Secured Rated Listed Redeemable Non-Convertible Debentures: Face value of Non Convertible Debentures
is ' 1.00 Million. These debentures are redeemable at the end of 36 months from the date of allotment. Payment of
Interest is yearly and principal repayment at maturity.

Secured Rated Listed Redeemable Non Convertible Debenture Series A1 Tranche 1 Date Of Maturity 27/05/2025
(9.00% - Mar' 25): Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are redeemable at the
end of 15 months from the date of allotment. Payment of Interest is Monthly and principal repayment at maturity.

Rate Reset Secured Rated Listed Redeemable Non Convertible Debenture Series A1 Tranche 2 Date Of Maturity
19/03/2025 (8.76% - 19 Mar' 25): Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are
redeemable at the end of 12 months 20 days from the date of allotment. Payment of Interest is Monthly and principal
repayment at maturity.

9.00% Rate Reset Secured Rated Listed Redeemable Non Convertible Debenture Series A2 Date Of Maturity
04/03/2027: Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are redeemable at the end
of 36 months from the date of allotment. Payment of Interest is Yearly and principal repayment at maturity.

9.00% Rate Reset Secured Rated Listed Redeemable Non Convertible Debenture Series A3 Date Of Maturity
13/05/2027: Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are redeemable at the end
of 36 months from the date of allotment. Payment of Interest is Yearly and principal repayment at maturity.

9.00% Rate Reset Secured Rated Listed Redeemable Non Convertible Debenture Series A4 Date Of Maturity
18/07/2027: Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are redeemable at the end
of 36 months from the date of allotment. Payment of Interest is Yearly and principal repayment at maturity.

9.00% Rate Reset Secured Rated Listed Redeemable Non Convertible Debenture Series A5 Date Of Maturity
04/02/2030: Face value of Non Convertible Debentures is ' 0.10 Million. These debentures are redeemable half yearly
in 4 tranches of 1000 Million each starting from August 2028. Payment of Interest is Yearly.

14.5 The debentures are secured by way of first pari passu charge against the book debts, Investment in PTC and
loan assets of the Company which are standard. Minimum security cover of 1.1 times is required to be maintained
throughout the year.

15.1 a) Term loan from banks: These are secured by First Pari Passu charge by way of hypothecation of standard loan
receivables of the Company, Investments in PTC and on all other book debts and current assets of the Company.
Minimum security cover of 1.1 times is required to be maintained throughout the year.

b) Term loan from financial institutions: These are secured by First Pari Passu charge by way of hypothecation of
standard loan receivables of the Company, Investments in PTC and on all other book debts and current assets of
the Company.Minimum security cover of 1.1 times is required to be maintained throughout the year.

c) Working capital demand loan from banks: These are secured by First Pari Passu charge by way of hypothecation
of standard loan receivables of the Company, Investments in PTC and on all other book debts and current assets
of the Company.Minimum security cover of 1.1 times is required to be maintained throughout the year.

d) Foreign Currency loan from banks: These are secured by First Pari Passu charge by way of hypothecation of
standard loan receivables of the Company, Investments in PTC and on all other book debts and current assets of
the Company. Minimum security cover of 1.1 times is required to be maintained throughout the year.

e) Collateralized borrowings are secured against pool of Loan Assets. Refer Note 49 for more details.

39.2 Valuation technique used to determine fair value

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value, grouped into Level 1 to Level 3, as described below.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by
reference to quoted prices (adjusted/unadjusted) for identical assets. This category consists of quoted mutual fund units
and government securities.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets, measured
using inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (i.e.; as
prices) or indirectly (i.e.; derived from prices). This category includes derivative financial instruments.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial
assets measured using inputs that are not based on observable market data. Fair values are determined in whole or in
part, using a valuation model based on assumptions that are neither supported by prices from observable current market
transactions in the same instrument nor are they based on available market data. This category includes investment in
Pass-through Certificates.

There has been no transfer between level 1, level 2 and level 3 for the year ended March 31, 2025 and March 31, 2024.

The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the
same as their fair values, due to their short-term nature.

The fair value of Loan approximates the carrying amount.

For financial assets and liabilities measured at fair value, the carrying amounts approximates the fair values.

40 Employee Benefits

(a) Defined Contribution plans
Provident Fund

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for eligible employees.
Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The contributions as specified under the law are paid to the Employee Provident Fund Organization (Government).

The Company recognized expense as contribution to provident fund amounting to ' 119.30 Million (March 31, 2024:
' 95.78 Million) in the statement of profit and loss. The contributions payable to these plans by the Company are at rates
specified in the rules of the schemes.

(b) Defined benefit plans
Gratuity Fund

Characteristics of defined benefit plan

The Company has a defined benefit gratuity plan in India (funded). The Company’s defined benefit gratuity plan is a final
salary plan for employees, which requires contributions to be made to SBFC Finance Limited employees group gratuity
cash accumulation scheme."

Risks associated with defined benefit plan

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

A. Actuarial Risk: It is the risk that benefits will cost more than expected. This can arise due to one of the following
reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result
into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the
Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the
acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary
growth and discount rate.

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

B. Investment Risk: For funded plans that rely on insurers for managing the assets, the value of assets certified by
the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the
assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded
status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk: Employees with high salaries and long durations or those higher in hierarchy, accumulate significant
level of benefits. If some of such employees resign/ retire from the Company there can be strain on the cashflows.

D. Market Risk: Market risk is a collective term for risks that are related to the changes and fluctuations of the financial
markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time
value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits &
vice versa. This assumption depends on the yields on the corporate/ government bonds and hence the valuation of
liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk: Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to
change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the
companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit
Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

During the year ended March 31, 2025 and March 31, 2024, there were no plan amendments, curtailments and
settlements.

The Life Insurance Corporation is managing the Gratuity Plan and the contributions to it is done as guided by rule 103
of Income Tax Rules, 1962.

Other Post Retirement Benefit Plan

The details of the Company’s post-retirement benefit plans for its employees including whole-time directors are given
below which is as certified by the actuary and relied upon by the auditors.

(c) Code on Social Security

The Indian parliament has approved Code on Social Security, 2020 ("the Code") which would impact the contributions
by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules
for the Code on Social Security, 2020 on November 13, 2020 and has invited suggestions from stakeholders which are
under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules
are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective
and the related rules to determine the financial impact are published.

47.1 The Company’s pending litigations comprise of claims against the Company by the customers and proceedings pending
with other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately
provided for where provisions are required and disclosed the contingent liabilities where applicable, in the financial
statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its
financial statements.

48 Risk Disclosures

The Company’s risk is managed through an integrated risk management framework, including ongoing identification,
measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to
the Company’s continuing profitability and each individual within the Company is accountable for the risk exposures
relating to his or her responsibilities. The Company is exposed to credit risk, liquidity risk, interest rate risk and price risk.
It is the Company’s policy to ensure that a robust risk awareness is embedded in its organizational risk culture.

48.1 Credit risk

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

48.1.1 Impairment assessment

During the current year, the Company has made refinement in the ECL model and said changes have been updated
in the ECL policy which is duly approved by the audit committee. However, there is no material impact on the financial
statements of the Company.

Exposure at Default

EAD is taken as the gross exposure under a facility upon default of an obligor. The amortized principal and the interest
accrued is considered as EAD for the purpose of ECL computation

The advances have been bifurcated into following three stages:

Stage 1

All exposures where there has not been a significant increase in credit risk since initial recognition or that has low credit
risk at the reporting date and that are not credit impaired upon origination are classified under this stage. The Company
classifies all standard advances and advances up to 0-30 days default under this category. Stage 1 loans also include
facilities where the credit risk has improved, and the loan has been reclassified from Stage 2.

Stage 2

All exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired
are classified under this stage. Financial assets past due for 31-90 days are classified under this stage. The Company
uses the below criteria for assessing movement to Stage 2:

a) Financial assets past due between 31-90

b) The Company becomes aware about any deterioration in the financial condition and reputation of the obligor which
the management believes may lead to significant deterioration in credit risk

Stage 3

All exposures assessed as credit impaired when one or more events that have a detrimental impact on the estimated
future cash flows of that asset have occurred are classified in this stage. For exposures that have become credit impaired,
a lifetime ECL is recognised and interest revenue is calculated by applying the effective interest rate to the amortised
cost (net of provision) rather than the gross carrying amount. Stage 3 is considered where “Contractual payments of
principal and/or interest are past due for more than 90 days.

Non performing Asset classification is done in line with Reserve Bank of India Master Circular on Prudential norms on
Income Recognition, Asset Classification and Provisioning pertaining to Advances and Clarifications dated November
12, 2021 and dated February 15, 2022.”

Significant increase in credit risk

The ECL allowance is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit
loss), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based
on the 12 months’ expected credit loss.

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a
financial instrument’s credit risk has increased significantly since initial recognition, by considering the change in the risk
of default occurring over the remaining life of the financial instrument. The Company does the assessment of significant
increase in credit risk at a borrower level. If a borrower has various facilities having different past due status, then the
highest days past due (DPD) is considered to be applicable for all the facilities of that borrower.”

PD estimation process

Probability of default (“PD”) is defined as the likelihood of default over a particular time horizon. The PD of an obligor is a
fundamental risk parameter in credit risk analysis and depends on obligor specific as well as macroeconomic risk factors.
The impact of macroeconomic criteria on the PD results in two different PD estimates, through-the-cycle (“TTC”) and the
point-in-time (“PIT”) PD. A TTC PD estimate remains largely unaffected by the economic cycle, while a PIT PD estimate
varies with the economic cycle.

Loss given default

The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based
on the difference between the contractual cash flows due and those that the lender would expect to receive, including
from the realisation of any collateral. It is usually expressed as a percentage of the EAD.

48.1.2 Analysis of risk concentration - Refer Note 54.16.3

48.1.3 Collateral and other credit enhancements

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Company
has Guidelines in place covering the acceptability and valuation of each type of collateral. The Company also adheres
to the RBI guidelines in respect of maintenance of adequate Loan to Value Ratios.

The main types of collateral for loans are Registered / equitable mortgage of property, Hypothecation of assets including Gold.
Management monitors the market value of collateral and requests additional collateral in accordance with the underlying
agreement.

In case of defaults by customers, where the Company is unable to recover the dues, the Company through a legal
process enforces the security and recover the dues.

48.2 Liquidity risk and funding management

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that
the Company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing
of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for
illiquid asset positions is not available to the Company on acceptable terms. To limit this risk, management has arranged
for diversified funding sources and adopted a policy of managing assets with liquidity in mind and monitoring future cash
flows and liquidity on a daily basis.

Liquidity risk is managed in accordance with our Asset Liability Management Policy. This policy is framed as per the
current regulatory guidelines and is approved by the Board of Directors. The Asset Liability Management Policy is
reviewed periodically to incorporate changes as required by regulatory stipulation or to realign the policy with changes
in the economic landscape. The Company also maintains LCR in accordance with RBI guidelines and board approved
Liquidity risk framework. The Asset Liability Committee (ALCO) of the Company formulates and reviews strategies, LCR
and provides guidance for management of liquidity risk within the framework laid out in the Asset Liability Management
Policy.

Analysis of financial assets and liabilities by remaining contractual maturities is provided in Note 38

52.4 The Company has taken borrowings from banks and financial institutions and utilised them for the specific purpose for
which they were taken as at the Balance sheet date. Unutilised funds as at March 31, 2025 are held by the Company
in the form of bank balances, debt mutual funds and short term fixed deposits till the time the utilisation is made
subsequently.

52.5 Details of Benami Property held:

No proceedings have been initiated or pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 and rules made thereunder, as at March 31, 2025 and March 31, 2024.

52.6 Wilful Defaulter:

The Company is not a declared wilful defaulter by any bank or financial Institution or other lender, in accordance with the
guidelines on wilful defaulters issued by the Reserve Bank of India, during the year ended March 31, 2025 and March
31, 2024.

52.7 Compliance with number of layers of companies:

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

52.8 Undisclosed Income:

There have been no transactions which have not been recorded in the books of accounts, that have been surrendered
or disclosed as income during the year ended March 31, 2025 and March 31, 2024, in the tax assessments under the
Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly
recorded in the books of account during the year ended March 31, 2025 and March 31, 2024.

52.9 Details of Crypto Currency or Virtual Currency:

The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March, 31 2025
and March 31, 2024.

52.10 Title Deeds of Immovable Properties not held in the name of the Company:

The Company does not hold any immovable property as on March 31, 2025 and March 31, 2024. All the lease agreements
are duly executed in favour of the Company for properties where the Company is the lessee.

52.11 Revaluation of Property, plant and equipment and Intangible assets

There is no revaluation of Property, plant and equipment and other intangible assets during the year ended March 31,
2025 and March 31, 2024.

52.12 Utilisation of Borrowed funds and share premium:

As a part of normal lending business, the Company grants loans and advances on the basis of security/ guarantee
provided by the Borrower/ co-borrower and makes investments. These transactions are part of Company’s normal non¬
banking finance business, which is conducted ensuring adherence to all regulatory requirements.

52.13 (a) Other than the transactions described above, no funds have been advanced or loaned or invested (either from

borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other
persons or entities, including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate
Beneficiaries).

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

54.4.3 Disclosures on Risk Exposure in Derivatives
Qualitative Disclosures

The Company has a Board approved policy in dealing with derivative transactions. Derivative transaction consists
of hedging of foreign exchange transactions, which includes forward contracts. The Company undertakes derivative
transactions for hedging on-balance sheet assets and liabilities. Such outstanding derivative transactions are
accounted on accrual basis over the life of the underlying instrument. The Asset Liability Management Committee and
Risk Management Committee closely monitors such transactions and reviews the risks involved.

The Company has entered into derivative agreement to mitigate the foreign exchange risk pertaining to foreign
currency borrowing. The description of risk policies and risk mitigation strategies are disclosed in note 48.4 of the
financial statements.

i Maturity pattern of assets and liability has been compiled by management on contractual payment basis and relied
upon by the auditors.

ii Amount shown in the tables are after netting off the provision.

iii Amount disclosed represents the amortised cost of the borrowings and foreign currency liabilities as per Ind AS as
given in Note 2.4 of the standalone financial statement.

iv Amount disclosed represents the amortised cost of loans and advances and Investments and fair value in case of
FVTPL instruments as per Ind AS as given in Note 2.4 of the standalone financial statements.

v Assets and liabilities bifurcation into various buckets is based on RBI guidelines.

vi Foreign Currency Liability (borrowing in foreign currency) will get converted into Rupee term loan in the month
of June 2025 as per agreement with the bank and therefore, Foreign Currency Liability shown as paid and
corresponding liabilities towards payment of term loan has been created and shown under Borrowings in same
period. External Commercial Borrowing is considerd Fully Hedge in reference to the Swap transaction entered with
RBL Bank Ltd.

54.8 Disclosure of Penalties imposed by RBI and other regulators

There is no other instance of penalty or stricture imposed on the Company by RBI or any other regulatory on matter
during the current year.

The Company had, suo moto, filed a compounding application dated January 25, 2021 with the Registrar of Companies
("RoC") under the Companies Act. The Compounding Application pertained to compounding the offence committed under
Section 179(3)(d) and Section 179(3)(f) of the Companies Act, 2013 read with Secretarial Standards 1 on “Meetings of
the Board of Directors” with respect to items of business which should not have been passed by a circular resolution.
In accordance with the second explanation to paragraph 1.3.8 and the explanation to paragraph 6.1.1 of the Secretarial
Standards 1, items of business in relation to borrowing money other than by issue of debentures and providing security
in respect of loans should be placed in a board meeting of a company and shall not be passed by a circular resolution.
In contravention of the above, our Company had passed certain circular resolutions to avail credit and loan facilities.
By way of order signed on May 31, 2023, the RoC has disposed off the Compounding Applications and the offences
thereunder have been compounded, after payment of fees of ' 0.97 million by the Company and the KMP's.

There is no other instance of penalty or stricture imposed on the Company by RBI or any other regulatory during the
previous year.

54.13 Net profit or loss for the period, prior period items and changes in accounting policies

There are no prior period items that have impact on the current year's or previous year's profit and loss.

54.14 Revenue Recognition

There is no transaction in which the Revenue recognition has been postponed or pending the resolution of significant
uncertainty.

54.15 Indian Accounting Standard 110 -Consolidated Financial Statements (CFS)

SBFC Home Finance, a wholly-owned subsidiary of the company is in the process of voluntary liquidation, and the
official liquidator had been appointed on January 27, 2025 for this process. The liquidator has completed the process
of realization of assets and liabilities. Consequently, the net proceeds of the realization have been distributed to the
Company on March 27, 2025. Accordingly, the Company has derecognised the investment and the resultant surplus has
been recorded as gain on voluntary liquidation of subsidiary.

Notes:

In respect of loans granted by the Company:

- the schedule of repayment of principal and payment of interest has been duly stipulated and the repayments of principal
amounts and receipts of interest have generally been regular as per repayment schedules except for 16,552 cases
having loan outstanding balance at year end aggregating to ' 5,944.67 Million wherein the repayments of principal and
interest are not regular; and

- the total amount overdue for more than 90 days as at the balance sheet date are ' 2,422.77 Million (Principal amount
' 2,110.38 Million and Interest amount ' 312.39 Million) for 4,576 cases. Interest income ' 312.39 Million which overdue
for more than 90 days are not recognised as income as a matter of prudence as per accounting policies and practices
of the Company.

Necessary steps are being taken by the Company for recovery thereof.

In respect of loans granted by the Company:

- the schedule of repayment of principal and payment of interest has been duly stipulated and the repayments of principal
amounts and receipts of interest have generally been regular as per repayment schedules except for 24,721 cases
having loan outstanding balance at year end aggregating to ' 5,204.16 Million wherein the repayments of principal and
interest are not regular; and

- the total amount overdue for more than 90 days as at the balance sheet date are ' 1,721.16 Million (Principal amount
' 1,456.59 Million and Interest amount ' 264.57 Million) for 2,680 cases. Interest income ' 264.57 Million which overdue
for more than 90 days are not recognised as income as a matter of prudence as per accounting policies and practices of
the Company.

Necessary steps are being taken by the Company for recovery thereof

57 Disclosure on Liquidity Coverage Ratio

As per RBI guidelines no DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 Dated November 04, 2019, NBFCs assets
with more than ' 5,000 crores, required to maintain Liquidity Coverage Ratio (LCR) as mentioned therein.

As on October 31, 2022 the Company has crossed ' 5,000 crores assets mark and adopted to start complying with
the monitoring and tracking of Liquidity Coverage Ratio (LCR) as part of Liquidity Risk Management framework from
November 25, 2022 onwards as per RBI guidelines.

The objective of this policy is to create an institutional mechanism to compute, review and monitor periodically all the
elements of the liquidity, develop suitable Liquidity Risk Management Framework, identify potential risks, take suitable
decisions and mitigate such risks.

As per RBI guidelines to ensure strong liquidity, NBFCs shall maintain an adequate level of unencumbered High Quality
Liquid Assets (HQLA) that can be converted into cash to meet its liquidity needs for a 30-day calendar time horizon under
a significantly severe liquidity stress scenario.

The Company follows the criteria laid down by RBI for calculation of Liquidity coverage Ratio (LCR) which is represented
by the ratio “Stock of HQLA” divided by “Total Net Cash Outflows over the next 30 calendar days”. Total expected cash
outflows (stressed outflows) are calculated by multiplying the outstanding balances of various categories or types of
liabilities and off-balance sheet commitments by 115% (15% being the rate at which they are expected to run off further
or be drawn down). 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).
However, total cash inflows will be subjected to an aggregate cap of 75% of total expected cash outflows. In other words,
total net cash outflows over the next 30 days = Stressed Outflows - Min (stressed inflows; 75% of stressed outflows).

The Company for purpose of computing cash outflows, have considered:

1. Secured wholesale funding i.e., all the contractual debt repayments,

2. Liquidity needs (e.g., collateral calls) related to financing transactions, derivatives and other contracts where
‘downgrade triggers’ up to and including a 3-notch downgrade,

3. Currently undrawn committed credit and liquidity facilities,

4. Any other contractual outflows not captured elsewhere in the template i.e., operational expenditure
Cash Inflows comprises of:

1. All other assets i.e., expected receipt from all performing loans,

2. Lines of credit - Credit or liquidity facilities or other contingent funding facilities that the NBFC holds at other
institutions for its own purpose (Facilities which are sanctioned but not yet disbursed)

3. Other contractual cash inflows (Includes fixed deposits and mutual funds)

HQLA is considered as per RBI guidelines.

The Company exceeds the regulatory requirement of LCR which mandated maintaining 60% of expected net cash
outflows for next 30 days in a stressed scenario in high quality liquid assets (HQLA) by December 2022; which has
to be increased to 100% by December 2024 in a phased manner. During the quarter ended June 24, September 24,
December 24 and March 25, the Company maintained a LCR of 335.24%, 395.33%, 285.14% & 261.09% respectively,
well in excess of the RBI’s stipulated norm of 85%.

61 Balances of certain trade receivables, advances given and trade payables are subject to confirmation / reconciliation, if
any. The management does not expect any material difference affecting the financial statements on such reconciliation
/ adjustments.

62 Previous Year Figures

Previous year's figures have been regrouped and reclassified wherever necessary to conform to current year classification/
presentation.

For M M Nissim & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants SBFC Finance Limited

Firm's Registration No. 107122W / W100672 CIN: L67190MH2008PLC178270

Hiren P Muni Mr. Neeraj Swaroop Mr. Aseem Dhru

Partner Chairperson & Independent Director Managing Director & CEO

Membership No: 142067 DIN: 00061170 DIN: 01761455

Mr. Narayan Barasia Ms. Namrata Sajnani

Chief Financial Officer Company Secretary &

Chief Compliance Officer
F10030

Place: Mumbai Place: Mumbai

Date: April 26, 2025 Date: April 26, 2025