Bajaj Housing Finance Ltd. के अकाउंट के लिये नोट

Mar 31, 2026

3.8 Provisions, contingent liabilities and commitments

The Company recognises a provision when there is present obligation as a result of a past event
that probably requires an outflow of resources and a reliable estimate can be made of the amount of
the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. The Company also discloses present obligations
for which a reliable estimate cannot be made as a contingent liability. When there is a possible obligation
or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made.

Commitments are future liabilities, which include undrawn loan commitments, estimated amount of
contracts remaining to be executed on capital account and not provided for.

3.9 Retirement and other employee benefits

(a) Short term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for
the services rendered by employees are recognised during the year when the employees render
the service. These benefits include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in which the employee renders the
related service.

(b) Employment benefit plans

The Company operates defined contribution, defined benefit and other long-term service benefits.

Payment to defined contribution plans i.e. provident fund and employees'' state insurance are charged
as an expenses as the employee render service.

Defined benefit plans for gratuity is funded by the Company. Payment for present liability of future
payment of gratuity is made to the approved gratuity fund viz. Bajaj Auto Limited Gratuity Fund Trust,
which covers the same under cash accumulation policy and debt fund of the Life Insurance Corporation
of India (LIC) and Bajaj Life Insurance Limited. However, any deficits in plan assets managed by LIC
and Bajaj Life Insurance as compared to actuarial liability determined by an appointed actuary are
recognised as a liability. Actuarial liability is computed using the projected unit credit method. The
calculation includes assumptions with regard to discount rate, salary escalation rate, attrition rate and
mortality rate. Management determines these assumptions in consultation with the plan''s actuaries
and past trend. Gains and losses through remeasurements of the net defined benefit liability/assets are
recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur. The effect of any planned amendments are recognised in
Statement of Profit and Loss. Remeasurements are not reclassified to profit or loss in subsequent periods.

(c) Compensated absences

The Company treats its liability for compensated absences based on actuarial valuation as at the
Balance Sheet date, determined by an independent actuary using the Projected Unit Credit method.

(d) Share based payments

The Company enters into equity settled share-based payment arrangement with its employees
as compensation for the provision of their services. The cost is determined basis the fair value of
the employee stock options on the grant date using the Black Scholes model. The total cost of the
share option is accounted for on a straight-line basis over the vesting period of the grant. The cost
attributable to the services rendered by the employees of the Company is recognised as employee
benefits expenses in the Statement of Profit and Loss, together with a corresponding increase in Share
Options Outstanding Account in other equity.

The Holding Company and Ultimate Holding Company had granted stock options to our employees in
earlier financial years for provision of services to our Company. The total cost determined basis fair
value using Black Scholes model is charged on a straight-line basis over the vesting period of the grant
and is recognised as employee benefits expenses in the Statement of Profit and Loss.

3.10 Fair value measurement

The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

In case financial instruments are classified on the basis of valuation techniques that features one or
more significant market inputs that are unobservable, then measurement of fair value becomes more
judgemental. Details on level 3 financial instruments along with sensitivity and assumptions are set out in
note no. 52.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input
that is significant to the fair value measurement as a whole. For a detailed information on the fair value
hierarchy, refer note no. 51 and 52.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy.

3.11 Collateral repossession

The nature of products across these broad product categories are either unsecured or secured by
collateral. Although collateral is an important risk mitigant of credit risk, the Company''s practice is to
lend on the basis of assessment of the customer''s ability to repay rather than placing primary reliance
on collateral. Based on the nature of product and the Company''s assessment of the customer''s credit
risk, a loan may be offered with suitable collateral. Depending on its form, collateral can have a significant
financial effect in mitigating the Company''s credit risk.

The Company periodically monitors the market value of collateral and evaluates its exposure and loan to
value metrics for high risk customers. The Company exercises its rights of repossession across all secured
products. It also resorts to invoking its right under the Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest (SARFAES) Act, 2002 and other judicial remedies available
against its mortgages and commercial lending business. The repossessed assets are either sold through
auction or released to delinquent customers in case they come forward to settle their dues.

4. Recent accounting pronouncements

Ministry of Corporate Affairs (''MCA) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time.

In May 2025, MCA notified amendments to Ind AS 21 ''The Effects of Changes in Foreign Exchange Rates'',
applicable w.e.f. 1 April 2025. The Company has no impact of these amendments.

In August 2025, MCA notified the following amendments to:

• Ind AS 1 ''Presentation of Financial Statements'', applicable w.e.f. 1 April 2025 - The amendment relates
to classification of liabilities as current or non-current and non-current liabilities with covenants. In
the context of classifying a liability as current, it removes the requirement of existence of a right to
defer settlement for at least 12 months after the reporting date and instead requires that the said right
should exist on the reporting date and have substance. The amendment also introduces guidance on
classification of liabilities with covenants. This amendment is not applicable to the Company.

• Ind AS 7 ''Statement of Cash Flows'' and Ind AS 107 ''Financial Instruments: Disclosures'', applicable
w.e.f. 1 April 2025 - The amendment in Ind AS 7 requires to inform users of financial statements of the
existence of supplier finance arrangements and explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment due dates. Ind AS 107 has been amended to add supplier
finance arrangements as a factor that may cause concentration of liquidity risk. The Company has no
impact of these amendments.

• Ind AS 12 ''International Tax Reform'' - Pillar Two Model Rules applicable with immediate effect- The
amendments provide a temporary mandatory relief from deferred tax accounting for top-up tax and
disclose that they have applied the relief. This amendement is not applicable to the Company.

Loans including instalment and interest outstanding amounting H 47.06 crore (Previous year H 59.07 crore)
in respect of properties held for disposal under Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 [SARFAESI].

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

Change in Business Model

The Company used to assign home loans to external partners as part of its treasury strategy. Considering the
change in regulatory requirement relating to Principal Business Criteria (PBC), the Company reassessed the
need for a change in the business model for its home loan portfolio. In order to retain higher proportion of home
loan portfolio as part of total assets, the Company had done insignificant amount of assignment transactions
for its home loan portfolio. This was necessitated due to the change in regulatory landscape applicable for the
Company to continue to be classified as a Housing Finance Company. Accordingly, the Company reassessed its
business model of collecting cash flows for home loan portfolio from ''Hold to collect and sell'' to ''Hold to collect''
and consequently, with effect from 1 April 2025, has reclassified such loan balances amounting to H 54,128.76
crore from FVOCI category to Amortised Cost category.

Principal Business Criteria (PBC)

As per the Reserve Bank of India (Housing Finance Companies) Directions, 2025, HFCs are required to maintain
minimum 60% of total assets (netted off by intangible assets) towards housing finance and 50% of total assets
(netted off by intangible assets) for individual housing finance. As at 31 March 2026, BHFL has 60.88% of total
assets (netted off by intangible assets) towards housing finance (As at 31 March 2025: 63.28%) and 50.45% of
total assets (netted off by intangible assets) towards individual housing finance (As at 31 March 2025: 51.72%).

‘Nature of security for term loans taken from Banks

Secured against hypothecation of book debts, loan receivables and other receivables.

$Nature of security for term loans taken from NHB

(i) All the outstanding refinancing from NHB are secured by hypothecation of specific loans/ book debts to the extent of 1.05 and 1.10
times of outstanding amount as per respective sanctioned terms.

(ii) The Company has availed refinance facility from NHB of H 3,789.34 crore during the year ended 31 March 2026 (Previous year
H 2,893.75 crore) against eligible individual Housing loans under various refinance schemes.

•Represents associated liabilities in respect of securitisation transactions, the net outstanding value (Net of Investment in Pass-through
Certificates) of the proceeds received by the Company from the Trust. The Company has provided additional external credit enhancement
to the Trust by way of cash collateral.

The Company has no pending charges or satisfaction which are required to be registered with ROC.

The Company has not been declared a wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or
consortium thereof in accordance with the guidelines on wilful defaulters issued by the RBI.

The quarterly statements or returns of assets filed by the Company with banks, financials institutions and debenture trustees are in
agreement with books of accounts. The amount reported in quarterly statements is adjusted for net stage 3 loan balances, interest accrued
but not due and loans to related parties as required by banks, financial institutions and debenture trustees.

The Allotment Committee allotted 41,87,918 equity shares on 11 April 2025, having face value of H 10 each
at applicable grant price to the Bajaj Housing Finance ESOP Trust under Employee Stock Option Scheme,

2024. Pursuant to the aforesaid allotment of equity shares, the issued, subscribed and paid-up capital of the
Company stands increased to H 83,28,66,20,060 (8,32,86,62,006 equity shares of H 10 each).

During the financial year ended 31 March 2025, the Company allotted 1,10,74,19,709 equity shares having
face value of H 10 each under right issue to its Holding Company (Bajaj Finance Limited) on 3 April 2024 at a
premium of H 8.06 per share involving aggregate amount of H 19,99,99,99,944.54. The Company made an Initial
Public Offer (IPO) for 93,71,42,856 equity shares of H 10 each, comprising a fresh issue of 50,85,71,428 equity
shares of the Company and 42,85,71,428 equity shares offered for sale by selling shareholders. The equity
shares were issued at a price of H 70 per equity share (including a Share Premium of H 60 per equity share).
The Company''s equity shares got listed on National Stock Exchange of India Limited and on BSE Limited on
16 September 2024.

b. Terms/rights/restrictions attached to equity shares

The Company has only one class of equity shares having a face value of H 10 per share. All these
equity shares have the same rights and preferences with respect to payment of dividend, repayment
of capital and voting. Repayment of capital will be in proportion to the number of equity shares held by
the shareholders.

i. Securities premium

Securities premium is used to record the premium on issue of shares. The premium received during the
year represents the premium received towards allotment of shares. It can be utilised only for limited
purposes in accordance with the provisions of the Companies Act, 2013.

ii. Statutory reserve in terms of Section 29C of the National Housing Bank Act, 1987

Reserve fund is created as per the Section 29C of the National Housing Bank Act, 1987, which requires every
housing finance company to create a reserve fund and transfer therein a sum not less than twenty percent
of its net profit every year as disclosed in the profit and loss account and before any dividend is declared. The
Company has transferred twenty percent of it''s net profit during the previous year to the reserve fund. This
includes Special Reserve created to avail the deduction as per the provisions of Section 36(1) (viii) of the
Income Tax Act, 1961 on profits derived from the business of providing long-term finance for construction or
purchase of houses in India for residential purposes.

iii. Retained earnings

Retained earnings represents the surplus in Profit and Loss account after appropriation.

The Company recognises change on account of remeasurement of the net defined benefit liability (asset)
as part of retained earnings with separate disclosure, which comprises of:

(a) actuarial gains and losses and

(b) return on plan assets, excluding amounts included in net interest on the net defined benefit liability/
(asset).

iv. Other comprehensive income

(a) On loans

The Company recognises changes in the fair value of debt instruments held with a dual business
objective of collect and sell in other comprehensive income. These changes are accumulated in the
FVOCI debt instrument reserve. The Company transfers amounts from this reserve to profit or loss
when the debt instrument is sold. Any impairment loss on such instruments is reclassified immediately
to the Statement of Profit and Loss.

(b) Investment measured at FVOCI

The Company recognises changes in the fair value of debt instruments held with a dual business
objective of collect and sell in other comprehensive income. These changes are accumulated in the
FVOCI debt investments reserve. The Company transfers amounts from this reserve to profit or loss
when the debt instrument is sold. Any impairment loss on such instruments is reclassified immediately
to the Statement of Profit and Loss.

v. Share options outstanding account

Share options outstanding account is created as required by Ind AS 102 ''Share Based Payments'' on the
Employee Stock Option Scheme operated by the Company for employees of the Company.

36. Exceptional Item (Contd.)

On 21 November 2025, the Government of India consolidated 29 existing labour legislations into a unified
framework comprising 4 Labour codes. In accordance with the requirements of Ind AS 19 ''Employee Benefits'',
these changes have resulted in an increase in the past service cost of gratuity by H13.14 crore. Considering
that the enactment of the new legislation is a non-recurring event, the Company has presented this one¬
time charge under ''Exceptional Item''. The Company continues to monitor the finalisation of the Central and
State Rules and clarifications from the Government on the New Labour Codes and shall provide appropriate
accounting effect based on such developments, as necessary.

37. Earnings per share (EPS)

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

38. Segment information

The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments
as per Ind AS 108 dealing with Operating Segment. The Company operates in a single geographical segment i.e. domestic.
No single customer represents 10% or more of the total revenue for the year ended 31 March 2026 and 31 March 2025.

39. Penalties imposed by NHB/RBI and other regulators

No penalty was imposed by NHB/RBI and any other regulators in the current year and previous year.

40(a). Transfer of financial assets that are derecognised in their entirety but where the
Company has continuing involvement

The Company has not transferred any assets that are derecognised in their entirety where the Company
continues to have continuing involvement.

43. Employee benefits plan (Contd.)

Gratuity

With the introduction of the Code on Social Security (CoSS), 2020 w.e.f. 21 November 2025, the
Payment of Gratuity Act, 1972 is repealed. While the Act has been repealed, its core provisions have been
incorporated into the new Code.

The Company has a gratuity plan for its employees which is higher of:

• Gratuity computed on the basis of wages (as defined in CoSS) or H 20 Lakh, whichever is lower; and

• Gratuity computed on the basis of Company''s gratuity scheme.

Employees other than fixed term employees, who are in continuous service for a period of 5 years; and
fixed-term employees who are in continuous service for a period of one year, are eligible for gratuity. The
level of benefits provided depends on the employee''s length of service and salary at retirement age.
Gratuity plan is funded by the Company. Payment for present liability of future payment of gratuity is made
to the approved gratuity fund under cash accumulation policy and debt fund. Any deficits/ surplus in plan
assets as compared to actuarial liability determined by an actuary are recognised as a liability/ asset.

Actuarial liability is computed using the projected unit credit method. The calculation includes assumptions
with regard to discount rate, salary escalation rate, attrition rate and mortality rate. Management
determines these assumptions in consultation with an actuary and past trend. Gains and losses through
remeasurements of the net defined benefit liability/assets are recognised immediately in the Balance Sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. The
effect of any planned amendments is recognised in Statement of Profit and Loss. Remeasurements are not
reclassified to profit or loss in subsequent periods.

Notes:

• Transactions values (TV) are excluding taxes and duties.

• Amount in bracket denotes credit balance.

• Transactions where Company act as intermediary and passed through Company''s books of accounts are not in the nature of related
party transaction and hence are not disclosed.

• Insurance claims received by the Company on insurance cover taken by it on its assets are not in the nature of related party transaction,
hence not disclosed.

• The above disclosures have been made for related parties identified as such only to be in conformity with the Ind AS 24 ''Related Party
Disclosures''.

• Name of the related parties and nature of their relationships where control exists have been disclosed irrespective of whether or
not there have been transactions between the related parties. In other cases, disclosure has been made only when there have been
transactions with those parties.

• Related parties as defined under clause 9 of the Indian Accounting Standard - 24 ''Related Party Disclosures'' have been identified based
on representations made by key managerial personnel and information available with the Company. All above transactions are in the
ordinary course of business and on arms'' length basis. All outstanding balances are to be settled in cash and are unsecured except
secured non-convertible debentures issued to related parties which are disclosed appropriately.

• Provisions for gratuity, compensated absences and other long-term service benefits are made for the Company as a whole and the
amounts pertaining to the key management personnel are not specifically identified and hence are not included above.

• As on 31 March 2026, 19 non-corporate related parties held Company''s equity shares amounting to H 0.05 crore (47,384 shares of H 10
each) (Previous Year 58,290 shares of H 10 each).

• Non convertible debentures (NCDs) transaction includes only issuance from primary market, and outstanding balance is balances of
NCDs held by related parties as on reporting dates. Interest accrued on NCDs is identified based on beneficiary holder at the time of
payment to whom the interest is credited.

• The Company has a committed line of credit of H 2,500 crore from Bajaj Finance Limited (Holding Company)

48. Capital

The Company actively manages its capital base to cover risks inherent to its business and meets the capital
adequacy requirements of the regulator, the Reserve Bank of India. The adequacy of the Company''s capital is
monitored using, among other measures, the regulations issued by the RBI.

(i) Capital management
Objective

The Company''s objective is to maintain appropriate levels of capital to support its business strategy taking
into account the regulatory, economic and commercial environment. The Company aims to maintain a strong
capital base to support its growth strategy and the risks inherent to its business. The Company endeavours to
maintain a higher capital base than the mandated regulatory capital at all times.

Planning

The Company''s assessment of capital requirement is aligned to its planned growth which forms part of an
annual operating plan which is approved by the Board and also a long range strategy. These growth plans are
aligned to assessment of risks- which include credit, liquidity and interest rate.

The Company monitors its capital adequacy ratio (CRAR) on a monthly basis through its assets liability
management committee (ALCO).

The Company endeavours to maintain its CRAR higher than the minimum regulatory requirement of 15%.
Accordingly, increase in capital is planned well in advance to ensure adequate funding for its growth.

51. Fair values

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.

This note describes the fair value measurement of both financial and non-financial instruments.

Valuation framework

The Company has an internal fair value assessment team which assesses the fair values for assets qualifying
for fair valuation.

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.

These valuation models are subject to a process of due diligence and validation before they become operational
and are continuously calibrated. These models are subject to approvals by various functions including risk,
treasury and finance functions. Finance function is responsible for establishing procedures, governing valuation
and ensuring fair values are in compliance with accounting standards.

Valuation methodologies adopted

Fair values of financial instruments, other than those which are subsequently measured at amortised cost, have
been arrived at as under:

• Fair values of investments held for trading under FVTPL and investments held under FVOCI have been
determined under level 1 (Refer note 52) using quoted market prices of the underlying instruments;

• Fair value of loans held for a business model that is achieved by both collecting contractual cash flows and
partially selling the loans through partial assignment to willing buyers and which contain contractual terms
that give rise on specified dates to cash flows that are solely payments of principal and interest are measured
at FVOCI. The fair value of these loans have been determined under level 3.

The Company has determined that the carrying values of cash and cash equivalents, trade receivables, short
term loans, floating rate loans, trade payables, short term debts, borrowings, bank overdrafts and other current
liabilities are a reasonable approximation of their fair value and hence their carrying values are deemed to be fair
value.

52. Fair value hierarchy

The Company determines fair values of financial instruments according to the following hierarchy:

Level 1- valuation based on quoted market price: financial instruments with quoted prices for identical
instruments in active markets that the Company can access at the measurement date.

Level 2- valuation using observable inputs: financial instruments with quoted prices for similar instruments
in active markets or quoted prices for identical or similar instruments in active markets and financial
instruments valued using models where all significant inputs are observable.

Level 3- valuation technique with significant unobservable inputs: financial instruments valued using valuation
techniques where one or more significant inputs are unobservable.

53. Risk management objectives and policies (Contd.)

(a) Liquidity risk

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive
concentrations on either side of the Balance Sheet.

The Company maintains a judicious mix of borrowings from banks, money markets and continues to diversify
its sources of borrowings with an emphasis on longer tenor borrowings. The Company for the first time raised
funds by way of securitisation of loans receivables in FY 2026. This strategy of balancing varied sources of funds
and long tenor borrowings along with liquidity buffer has helped the Company maintain a healthy asset liability
position. The overall borrowings including debt securities stood at H 1,03,703.99 crore as of 31 March 2026
(Previous year H 82,071.92 crore).

The Company continuously monitors liquidity in the market; and as a part of its ALM strategy maintains a
liquidity buffer through an active investment desk to reduce this risk. The Company endeavours to maintain
liquidity buffer in the range of 3% to 5% of its overall borrowings in normal market scenario. The average
investments for the financial year 2025-26 was H 3,979 crore. Liquidity buffer was at H 2,662 crore as on
31 March 2026.

RBI has issued guidelines on liquidity risk framework for NBFCs, covering various aspects of liquidity risk
management such as granular level classification of buckets in structural liquidity statement, tolerance limits
thereupon, and liquidity risk management tools and principles. The Company has a Board approved Liquidity
Risk Management Framework which covers liquidity risk management policy, strategies and practices, liquidity
coverage ratio (LCR), stress testing, contingency funding plan, maturity profiling, liquidity risk measurement -
stock approach, currency risk, 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). As of
31 March 2026, the Company maintained a LCR of 152.52%, well in excess of the RBI''s stipulated norm of 100%.

The Company has a Board approved Contingency Funding Plan (CFP) to respond quickly to any anticipated
or actual stressed market conditions. The primary goal of the Contingency Funding Plan (CFP) is to provide a
framework of action plan for contingency funding when the Company experiences a reduction to its liquidity
position, either from causes unique to the Company or systemic events limiting its ability to maintain normal
operations and service to customers. The CFP defines the framework to assess, measure, monitor, and respond
to potential contingency funding needs. CFP also clearly lays down the specific contingency funding sources,
conditions related to the use of these sources and when they would be used. Roles and responsibilities of the
Crisis Management Group constituted under the CFP have been identified to facilitate the effective execution of
CFP in a contingency event.

The table below summarises the maturity profile of the undiscounted cashflow of the Company''s
financial liabilities:

(b) Market risk

Market risk is the risk that the fair value of future cash flow of financial instruments will fluctuate due to changes
in the market variables such as interest rates, foreign exchange rates and security prices.

Interest rate risk
On assets and liabilities

For floating rate asset and liabilities sensitivity analysis is prepared assuming the amount outstanding at the
end of the reporting period was outstanding for the whole year. The following table demonstrate the sensitivity
to a reasonably possible change in interest rate on that portion of loans and borrowings affected. With all other
variable held constant, the Company''s profit before tax is affected through the impact on floating rate financial
asset and liabilities, as follows:

(c) Credit risk

Credit risk is the risk of financial loss arising out of customers or counterparties failing to meet their repayment
obligations to the Company. The Company has a diversified lending model and focuses on five broad categories
viz: (i) home loans, (ii) loan against property (iii) lease rental discounting, (iv) developer loans, and (v) unsecured
loans. The Company assesses the credit quality of all financial instruments that are subject to credit risk.

Classification of financial assets under various stages

The Company classifies its financial assets in three stages having the following characteristics:

• Stage 1: unimpaired and without significant increase in credit risk since initial recognition on which a
12-month allowance for ECL is recognised;

• Stage 2: a significant increase in credit risk since initial recognition on which a lifetime ECL is recognised; and

• Stage 3: objective evidence of impairment, and are therefore considered to be in default or otherwise credit
impaired on which a lifetime ECL is recognised.

Treatment and classification methodology of different stages of financial assets is detailed in note no. 3.3 (i)
Computation of impairment on financial instruments

The Company calculates impairment on financial instruments as per ECL approach prescribed under Ind AS 109
''Financial instrument''. ECL uses three main components: PD (probability of default), LGD (loss given default)
and EAD (exposure at default) along with an adjustment considering forward macro economic conditions. For
further details of computation of ECL please refer to significant accounting policies note no 3.3 (i).

The Company recalibrates components of its ECL model periodically by; (1) using the available incremental and
recent information, except where such information do not represent the future outcome, and (2) assessing
changes to its statistical techniques for a granular estimation of ECL. Accordingly, during the year, the Company
has redeveloped its ECL model and implemented the same with the approval of Audit Committee and the Board.

The Company follows simplified ECL approach under Ind AS 109 ''Financial Instruments'' for trade receivables,
and other financial assets.

The table below summarises the approach adopted by the Company for various components of ECL viz. PD,

EAD and LGD across product lines using empirical data where relevant:

Collateral valuation

The Company offers loans to customers across various lending verticals as articulated above. These loans
includes both unsecured loans and loans secured by collateral. Although collateral is an important risk
mitigant of credit risk, the Company''s practice is to lend on the basis of assessment of the customer''s ability
to repay rather than placing primary reliance on collateral. Based on the nature of product and the Company''s
assessment of the customer''s credit risk, a loan may be offered with suitable collateral. Depending on its form,
collateral can have a significant financial effect in mitigating the Company''s credit risk.

The Company periodically monitors the market value of collateral and evaluates its exposure and loan to value
metrics for high risk customers. The Company exercises its right of repossession across all secured products.

It also resorts to invoking its right under the SARFAESI Act and other judicial remedies available against its
mortgages and commercial lending business. The repossessed assets are either sold through auction or
released to delinquent customers in case they come forward to settle their dues. The Company does not record
repossessed assets on its Balance Sheet as non-current assets held for sale.

Guarantee cover taken on loans

The Company takes guarantee cover for certain qualifying portfolios under Credit Risk Guarantee Fund Trust for
Low Income Housing (CRGFTLIH) governed by National Credit Guarantee Trustee Company Limited (NCGTC).

Analysis of concentration risk

The Company focuses on granulisation of loans portfolios by expanding its geographic reach to reduce geographic
concentrations while continually calibrating its product mix across its five categories of lending mentioned above.

ECL sensitivity analysis to forward economic conditions and management overlay

Allowance for impairment on financial instruments recognised in the financial statements reflect the effect of
a range of possible economic outcomes, calculated on a probability-weighted basis, based on the economic
scenarios described below. The recognition and measurement of expected credit losses (''ECL'') involves the use
of estimation. It is necessary to formulate multiple forward-looking economic forecasts and its impact as an
integral part of ECL model.

The ECL model and its input variables are recalibrated periodically using available incremental and recent
information. It is possible that internal estimates of PD and LGD rates used in the ECL model may not always
capture all the characteristics of the market and the external environment as at the reporting date. To reflect this,
qualitative adjustments or overlays are made as temporary adjustments to reflect the emerging risks reasonably.

Methodology

The Company has adopted the use of three scenarios, representative of its view of forecast economic
conditions, required to calculate unbiased estimation of forward looking economic adjustment to its ECL. They
represent a most likely outcome i.e. central scenario and two less likely outer scenarios referred to as the upside
and downside scenarios. The Company has assigned a 10% probability to the two outer scenarios, while the
central scenario has been assigned an 80% probability. These weights are deemed appropriate for the unbiased
estimation of impact of macro factors on ECL. The key scenario assumptions are used keeping in mind external
forecasts and Management estimates which ensure that the scenarios are unbiased.

The Company uses multiple economic factors and test their correlations with past loss trends witnessed for
building its forward economic guidance (FEG) model. During the current year, the Company evaluated various
macro factors GDP growth rates, growth of bank credit, wholesale price index (WPI), consumer price index
(CPI), core inflation, industrial production index, unemployment rate, crude oil prices and policy interest rates.

Based on past correlation trends, inflation and GDP growth rates reflected acceptable correlation with past loss
trends and were considered appropriate by the Management. GDP has a direct relation with the income levels
whereas inflation and inflationary expectations affect the disposable income of people. Accordingly, both these
macro-variables directly and indirectly impact the economy. These factors were assigned appropriate weights
to measure ECL in forecast economic conditions.

For GDP growth rate data, the Company has considered RBI projections and data published by Ministry of
Statistics and Programme Implementation, Government of India.

- While formulating the central scenario, the Company has considered average growth rate of 7% for next year.

- In the downside scenario, factoring in heightened geopolitical risks and a potential war-related disruption,

GDP growth is assumed to decline to -2%. However, consistent with a mean reversion approach, this
contraction is considered temporary. The scenario assumes that growth gradually rebounds from the trough
and normalizes to approximately 8% , reflecting economic stabilization and recovery following the shock.

- For the upside scenario, the Company acknowledges various surveys and studies indicating improving
economic situation and estimates GDP growth rate might reach to 14%. Subsequently, as per mean
reversion approach, the upside scenario assumes it to normalise from the peak and normalise to around 8%
within next three years.

For Inflation data, the Company has considered RBI reports and data published by Ministry of Statistics &
Programme Implementation, Government of India.

- The central scenario assumed by the Company considered peak inflation of 4.2% basis average trendlines
of last 3 years.

- For the downside scenario, the Company considers that the inflation risk may continue due to various
uncertainties (geopolitical conflict, tariffs etc), and therefore assumes the inflation to touch a peak of
around 8% and subsequently normalise to around 3.4%.

- For the upside scenario, we believe that there would be certain factors which might come into play viz, base
effect, continuously falling WPI, better supply chain management etc, and, as a result, inflation is assumed to
well-anchored, stabilising in range of 3.3% to 3.4%. This range represents the lowest inflation rate considered
under the upside scenario, and no further downward deviation has been assumed, given structural and
policy-related constraints that are likely to prevent inflation from falling meaningfully below this level.

Additionally, the ECL model and its input variables are recalibrated periodically using available incremental and
up to date information. However, it is recognised that internal estimates of PD and LGD rates used in the ECL
framework may not, at all times, fully capture the rapidly evolving market conditions or external environmental
factors prevailing at the reporting date. Accordingly, Management applies qualitative overlays and post model
adjustments, where necessary, as temporary measures to appropriately reflect emerging and non linear risks
that are not adequately incorporated in the model based estimates.

53. Risk management objectives and policies (Contd.)

(d) Operational risk

Operational risk is the risk arising from inadequate or failed internal processes, people or systems, or from
external events. Operational risk is inherent in the Company''s business activities, as well as in the related
support functions. BHFL has in place an internal Operational Risk Management (ORM) Framework to manage
operational risk in an effective and efficient manner. The key objective is to enable the Company to ascertain
an increased likelihood of an operational risk event occurring in a timely manner to take steps to mitigate the
same. This is achieved through determining key process areas, converting these to measurable and quantifiable
metrics (KRIs), setting thresholds for KRIs, monitoring and reporting on breaches of the tolerance levels.
Corrective actions are initiated to bring back the breached metrics within their acceptable thresholds by
conducting the root cause analysis to identify the failure of underlying process, people, systems, or external
events, if any.

Further, the Company has comprehensive procedures and controls laid down by respective businesses around
various key activities viz. loan acquisition, customer service, IT operations, finance function etc. Company also
has a dedicated ORM unit to review and monitor operational risk in coordination with respective business/
functions along with ORM SPOCs identified within each business unit. Internal Audit also conducts a detailed
review of all the functions at least once a year which helps to identify process gaps on timely basis. Information
technology and operations functions have a dedicated compliance and control units who on continuous basis
review internal processes. This enables the Management to evaluate key areas of operational risks and the
process to adequately mitigate them on an ongoing basis.

The Company has a robust Disaster recovery (DR) plan and Business continuity plan (BCP) to ensure
continuity of its operations including services to customers in situations such as natural disasters, technological
outage, etc. Robust periodic testing is carried, and results are analysed to address any gaps in the framework.
DR and BCP audits are conducted on a periodical basis to provide assurance regarding its effectiveness.

54. Employee stock option plan

(A) Employee stock option plan of Bajaj Housing Finance Limited

The Board of Directors at its meeting held on 24 April 2024, approved an issue of stock options up to a
maximum of 5% of the then issued equity capital of the Company aggregating to 39,09,78,763 equity shares
of the face value of H 10 each in a manner provided in the Companies Act, 2013 subject to the approval of the
shareholders. The shareholders of the Company vide their special resolution passed at Extraordinary General
Meeting on 24 April 2024 approved the issue of equity shares of the Company under Employee Stock Option
Scheme. Subsequently, it was ratified by shareholders vide special resolution passed through postal ballot
on 21 December 2024 in line with the requirements of Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021. The options issued under the ESOP Scheme vest over
a period of not less than 1 year and not later than 5 years from the date of grant with the vesting condition of
continuous employment with the Company or the Group except in case of death or permanent incapacity of an
Option Grantee where the minimum vesting period of 1 year from the date of grant shall not apply and settled
by issue of shares at exercise price.

The Nomination and Remuneration Committee of the Company has approved the following grants to tenured
employees in managerial and leadership positions upon achieving defined thresholds of performance and
leadership behaviour in accordance with the Stock Option Scheme. Details of grants given up to the reporting
date under the scheme are given as under:

Determination of expected volatility

Expected volatility has been calculated based on the daily closing market price of the comparable entities.

For the year ended 31 March 2026, the Company has accounted expense of H 32.06 crore as employee benefit
expenses (note no.34) on the aforesaid employee stock option plan (Previous year H 16.97 crore). The balance in
employee stock option outstanding account is H 48.01 crore as of 31 March 2026 (Previous year H 16.97 crore).

(B) Employee stock option plan of Bajaj Finance Limited

The Nomination and Remuneration Committee of the Bajaj Finance Limited (Holding Company) has approved
grants to select senior level executives of the Company in accordance with the Stock Option Scheme. Details
of grants given upto the reporting date under the scheme, duly adjusted for sub-division of shares and issue of
bonus shares thereon, are given as under:

The Nomination and Remuneration Committee of the Bajaj Finserv Limited (Ultimate Holding Company) has
approved grant of 47,340 stock options at an exercise price of H 1,482.64, adjusted for split and bonus, having
a bullet vesting of 5 years to select employees of the Company in accordance with the Stock Option Scheme of
the Ultimate Holding Company. Of the options granted, no option has vested, cancelled or exercised during the
year. The weighted average fair value of the option granted is H 689.20. The Ultimate Holding Company has used
the fair value method to account for the compensation cost of stock options to employees. The fair value of
options used are estimated on the date of grant using the Black - Scholes Model. The key assumptions used in
Black - Scholes Model for calculating fair value as on the date of respective grants are

55. Utilisation of borrowed funds

Details of transaction where the Company has received fund from entities (Funding party) with the
understanding that the Company shall directly or indirectly lend or invest in other entities.

There were no transaction where the Company had received fund from entities (Funding party) with the
understanding that the Company shall directly or indirectly lend or invest in other entity during the financial
year ended 31 March 2026 and 31 March 2025.

56. Disclosures pursuant to RBI Direction - RBI/DOS/2024-25/120 D0S.C0.FMG.SEC.No.7/23.04.001/2024-25,
''Reserve Bank of India Master Directions (MD) on Fraud Risk Management in Non-Banking Financial Companies
(NBFCs) (including Housing Finance Companies)'' dated 15 July 2024, as amended from time to time.

The Company has reported fraud amounting to H 0.85 crore during the year ended 31 March 2026
(Previous year Nil).

57. Disclosures pursuant to RBI Direction - RBI/DoR/2025-26/365 DoR.FIN.REC.284/03-10-119/2025-26, ’Reserve
Bank of India (Housing Finance Companies) Directions’ dated 28 November 2025, as amended from time to time.

59.1 Loans against gold and silver collateral

The Company has not granted any loans against collateral of gold and silver in current year and previous year.

59.2 Project finance

In accordance with the Reserve Bank of India (Non-Banking Financial Companies - Resolution of Stressed
Assets) Directions 28 November 2025, no resolution plans have been implemented during the period ended
31 March 2026 in projects financed on or after 1 October 2025.

59.3 Details of Co-lending arrangements (CLAs)

In accordance with the Reserve Bank of India (Non-Banking Financial Companies - Transfer and Distribution of
Credit Risk) Directions dated 28 November 2025, the relevant provisions of Co-lending arrangements are effective
from 1 January 2026. The Company has not entered into new Co-lending arrangements on/ after 1 January 2026.

(vi) Institutional set-up for liquidity risk management

The Company manages its liquidity risk management framework through various means like liquidity
buffers, sourcing of long-term funds, positive asset liability mismatch, keeping strong pipeline of sanctions
and approvals from banks and assignment of loans under the guidance of ALCO and Board. For qualitative
disclosure on liquidity risk management, refer note no. 53.

59.13 Credit default swaps

The Company has not entered into any credit default swap during the current and previous year.

Exchange Traded Interest Rate (IR) Derivative

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

Disclosures on Risk Exposure in Derivatives
A. Qualitative disclosure
Financial Risk Management

The Company has to manage various risks associated with the lending business. These risks include liquidity
risk, interest rate risk and counterparty risk.

The Investment and market risk policy, ALM Policy and currency and interest rate risk hedging policy as
approved by the Board sets limits for exposures on various parameters. The Company manages its interest rate
risk in accordance with the guidelines prescribed therein.

Liquidity risk and interest rate risks, arising out of maturity mismatch of assets and liabilities, are managed
through regular monitoring of maturity profiles. As a part of Asset Liability Management, the Company has also
entered into interest rate swaps wherein it has converted a portion of its fixed rate rupee liabilities into floating
rate liability. Counter party risk is reviewed periodically to ensure that exposure to various counter parties is well
diversified and is within the limits specified by policy.

Constituents of Hedge Management Framework

Financial Risk Management of the Company constitutes the Audit and Governance Committee, Asset Liability
Committee (ALCO), Investment Committee and the Risk Management Committee.

The Company periodically monitors various counter party risk and market risk limits, within the risk architecture
and processes of the Company.

Hedging policy

The Company has a Interest rate risk and currency risk hedging approved by the Board of Directors. For
derivative contracts designated as hedges, the Company documents at inception, the relationship between
the hedging instrument and hedged item. Hedged book is reviewed periodically by the Investment Committee/
ALCO at each reporting period. Hedge effectiveness is measured by the degree to which changes in the fair
value or cashflows of the hedged item that are attributed to the hedged risk are offset by changes in the fair
value or cashflows of the hedging instrument.

Measurement and accounting

All derivative contracts are recognised on the Balance Sheet and measured at fair value. Hedge accounting
is applied to all the derivative instruments as per IND AS 109. Gains/ losses, arising on account of fair value
changes in hedged item and hedging instrument, are recognised in the Statement of Profit and Loss.

The Company has entered into fair value hedges like interest rate swaps on fixed rate rupee liabilities as a part
of the Interest rate risk management whereby fixed rate liabilities are converted to floating rate liabilities. The
Company has a net mark to market loss of H 61.58 crore on outstanding interest rate swap book.

59.20 Exposure

(i) Details of financing of Parent Company products

The Company does not have any financing of Parent Company products during the current and previous year.

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

The Company has not exceeded the prudential exposure limits during the current and previous year.

(iii) Unsecured Advances

The Company has unsecured advances net of ECL of H 2,249.35 crore (Previous year H 1,982.14 crore)
which includes advances net of ECL of H 546.33 crore (Previous year H 266.84 crore) secured against
intangible assets.

59.21 Breach of covenants

There were no breach of covenants of loans availed or debt securities issued in current year and previous year.

59.22 Divergence in asset classification and provisioning

No disclosure on divergence in asset classification and provisioning for NPAs is required with respect to NHB''s
supervisory inspection for the year ended 31 March 2025 and for the year ended 31 March 2024.

59.23 Registration from other financial sector regulators

The Company has obtained registration from Financial Intelligence Units, India vide Registration No. FI00030844.
The Company has obtained registration from Insurance Regulatory and Development Authority vide Registration
No. CA0885.

59.24 Area of operation

The Company is do

---

Mar 31, 2025

4.8 Provisions, contingent liabilities and Commitment

The Company recognises a provision when there is present obligation as a result of a past event
that probably requires an outflow of resources and a reliable estimate can be made of the amount of
the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. The Company also discloses present obligations
for which a reliable estimate cannot be made as a contingent liability. When there is a possible obligation
or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made.

Commitments are future liabilities, which include undrawn loan commitments, estimated amount of
contracts remaining to be executed on capital account and not provided for.

4.9 Retirement and other employee benefits

(a) Short term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for
the services rendered by employees are recognised during the year when the employees render
the service. These benefits include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in which the employee renders the
related service. The liability for accumulated leaves which is eligible for encashment within the same
calendar year is provided for at prevailing salary rate for the entire unavailed leave balance as at the
Balance Sheet date.

(b) Employment benefit plans

The Company operates defined contribution, defined benefit and other long term service benefits.

Payment to defined contribution plans i.e. provident fund and employees'' state insurance are charged
as an expenses as the employee render service.

Defined benefit plans for gratuity is funded by the Company. Payment for present liability of future
payment of gratuity is made to the approved gratuity fund viz. Bajaj Auto Limited Gratuity Fund
Trust, which covers the same under cash accumulation policy and debt fund of the Life Insurance
Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). However, any
deficits in plan assets managed by LIC and BALIC as compared to actuarial liability determined by an
appointed actuary are recognised as a liability. Actuarial liability is computed using the projected unit
credit method. The calculation includes assumptions with regard to discount rate, salary escalation
rate, attrition rate and mortality rate. Management determines these assumptions in consultation
with the plan''s actuaries and past trend. Gains and losses through remeasurements of the net defined

benefit liability/assets are recognised immediately in the Balance Sheet with a corresponding debit or
credit to retained earnings through OCI in the period in which they occur. The effect of any planned
amendments are recognised in Statement of Profit and Loss. Remeasurements are not reclassified to
profit or loss in subsequent periods.

(c) Share based payments

The Company enters into equity settled share-based payment arrangement with its employees
as compensation for the provision of their services. The cost is determined basis the fair value of
the employee stock options on the grant date using the Black Scholes model. The total cost of the
share option is accounted for on a straight-line basis over the vesting period of the grant. The cost
attributable to the services rendered by the employees of the Company is recognised as employee
benefits expenses in the Statement of Profit or Loss, together with a corresponding increase in Share
Options Outstanding Account in other equity.

The Holding Company and Ultimate Holding Company had granted stock options to our employees in
earlier financial years for provision of services to our Company. The total cost determined basis fair
value using Black Scholes model is charged on a straight-line basis over the vesting period of the grant
and is recognised as employee benefits expenses in the Statement of Profit or Loss.

4.10 Fair value measurement

The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

In case financial instruments are classified on the basis of valuation techniques that features one or more
significant market inputs that are unobservable, then measurement of fair value becomes more judgemental.
Details on level 3 financial instruments along with sensitivity and assumptions are set out in note no. 49.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input
that is significant to the fair value measurement as a whole. For a detailed information on the fair value
hierarchy, refer note no. 48 and 49.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.

4.11 Collateral repossession

The nature of products across these broad product categories are either unsecured or secured by
collateral. Although collateral is an important risk mitigant of credit risk, the Company''s practice is to
lend on the basis of assessment of the customer''s ability to repay rather than placing primary reliance
on collateral. Based on the nature of product and the Company''s assessment of the customer''s credit
risk, a loan may be offered with suitable collateral. Depending on its form, collateral can have a significant
financial effect in mitigating the Company''s credit risk.

The Company periodically monitors the market value of collateral and evaluates its exposure and loan to
value metrics for high risk customers. The Company exercises its rights of repossession across all secured
products. It also resorts to invoking its right under the Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and other judicial remedies available
against its mortgages and commercial lending business. The repossessed assets are either sold through
auction or released to delinquent customers in case they come forward to settle their dues.

4.12 Recent accounting pronouncements

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

*All the Privately placed secured redeemable non-convertible debentures of the Company including those issued during the year ended 31 March 2025
are fully secured by hypothecation of book debts/loan receivables to the extent as stated in the respective information memorandum. Further, the
Company has, at all times, for the non-convertible debentures, maintained asset cover as stated in the respective information memorandum which is
sufficient to discharge the principal amount, interest accrued thereon and such other sums as mentioned therein.

The quarterly statements or returns of assets filed by the Company with banks, financials institutions and debenture trustees are in agreement
with books of accounts. The amount reported in quarterly statements is adjusted for net stage 3 loan balances, interest accrued but not due and
loans to related parties as required by banks, financial institutions and debenture trustees.

The Company has no pending charges or satisfaction which are required to be registered with ROC.

As a part of Interest rate risk management, the Company has entered into INR interest rate swaps of a notional amount of H 500 crore during the
year ended 31 March 2025 (Previous year H 1,750 crore). The total outstanding as on 31 March 2025 is H 2,350 crore (Previous year H 1,850 crore).

The Company has not been declared a wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or
consortium thereof in accordance with the guidelines on wilful defaulters issued by the RBI.

‘Nature of security for term loans taken from Banks

Secured against hypothecation of book debts, loan receivables and other receivables.

The quarterly statements or returns of assets filed by the Company with banks, financials institutions and debenture trustees are in
agreement with books of accounts. The amount reported in quarterly statements is adjusted for net stage 3 loan balances, interest accrued
but not due and loans to related parties as required by banks, financial institutions and debenture trustees.

$Nature of security for term loans taken from NHB

(i) All the outstanding refinancing from NHB are secured by hypothecation of specific loans/ book debts to the extent of 1.05 and 1.10
times of outstanding amount as per respective sanctioned terms.

(ii) The Company has availed refinance facility from NHB of H 2,893.75 crore during the year ended 31 March 2025 (Previous year

H 5,499.38 crore) against eligible individual Housing loans under various refinance schemes including Affordable Housing Scheme.

The Company has no pending charges or satisfaction which are required to be registered with ROC.

Nature and purpose of other equity

i. Securities premium

Securities premium is used to record the premium on issue of shares. The premium received during the
year represents the premium received towards allotment of shares. It can be utilised only for limited
purposes in accordance with the provisions of the Companies Act, 2013.

ii. Statutory reserve in terms of Section 29C of the National Housing Bank Act, 1987

Reserve fund is created as per the Section 29C of the National Housing Bank Act, 1987, which requires every
housing finance company to create a reserve fund and transfer therein a sum not less than twenty percent
of its net profit every year as disclosed in the profit and loss account and before any dividend is declared. The
Company has transferred twenty percent of it''s net profit during the year to the reserve fund. This includes
Special Reserve created to avail the deduction as per the provisions of Section 36(1) (viii) of the Income Tax
Act, 1961 on profits derived from the business of providing long-term finance for construction or purchase of
houses in India for residential purposes.

iii. Retained earnings

Retained earnings represents the surplus in profit and loss account after appropriation.

The Company recognises change on account of remeasurement of the net defined benefit liability (asset)
as part of retained earnings with separate disclosure, which comprises of:

(a) actuarial gains and losses and

(b) return on plan assets, excluding amounts included in net interest on the net defined benefit liability/
(asset).

43. Disclosure of transactions with related parties as required by Ind AS 24 (Contd.)

Notes

• Transactions values (TV) are excluding taxes and duties.

• Amount in bracket denotes credit balance.

• Transactions where Company act as intermediary and passed through Company''s books of accounts are not in the nature of related
party transaction and hence are not disclosed.

• Insurance claims received by the Company on insurance cover taken by it on its assets are not in the nature of related party transaction,
hence not disclosed.

• The above disclosures have been made for related parties identified as such only to be in conformity with the Indian Accounting
Standard 24.

• Name of the related parties and nature of their relationships where control exists have been disclosed irrespective of whether or not
there have been transactions with the Company. In other cases, disclosure has been made only when there have been transactions with
those parties.

• Related parties as defined under clause 9 of the Indian Accounting Standard - 24 ''Related Party Disclosures'' have been identified based
on representations made by key managerial personnel and information available with the Company. All above transactions are in the
ordinary course of business and on arms'' length basis. All outstanding balances are to be settled in cash and are unsecured except
secured non-convertible debentures issued to related parties which are disclosed appropriately.

• Provisions for gratuity, compensated absences and other long term service benefits are made for the Company as a whole and the
amounts pertaining to the key management personnel are not specifically identified and hence are not included above.

• As on 31 March 2025, 22 non-corporate related parties held Company''s equity shares amounting to H 0.06 crore (58,290 shares of H 10
each). Transaction value with 19 non-corporate related parties during the year ended 31 March 2025 amounting to H 0.40 crore (57,352
shares of H 70 each).

• Non convertible debentures (NCDs) transaction includes only issuance from primary market, and outstanding balance is balances of
NCDs held by related parties as on reporting dates. Interest accrued on NCDs is identified based on beneficiary holder at the time of
payment to whom the interest is credited.

• The Company has a committed line of credit of H 2,500 crore from Bajaj Finance Limited (Holding Company).

45. Capital

The Company actively manages its capital base to cover risks inherent to its business and meets the capital
adequacy requirements of the regulator, the Reserve Bank of India. The adequacy of the Company''s capital is
monitored using, among other measures, the regulations issued by the RBI.

(i) Capital management
Objective

The Company''s objective is to maintain appropriate levels of capital to support its business strategy taking into
account the regulatory, economic and commercial environment. The Company aims to maintain a strong capital
base to support its growth strategy and the risks inherent to its business. The Company endeavours to maintain
a higher capital base than the mandated regulatory capital at all times.

Planning

The Company''s assessment of capital requirement is aligned to its planned growth which forms part of an
annual operating plan which is approved by the Board and also a long range strategy. These growth plans are
aligned to assessment of risks- which include credit, liquidity and interest rate.

The Company monitors its capital adequacy ratio (CRAR) on a monthly basis through its assets liability
management committee (ALCO).

The Company endeavours to maintain its CRAR higher than the mandated regulatory norm. Accordingly,
increase in capital is planned well in advance to ensure adequate funding for its growth.

48. Fair values

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.

This note describes the fair value measurement of both financial and non-financial instruments.

Valuation framework

The Company has an internal fair value assessment team which assesses the fair values for assets qualifying
for fair valuation.

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.

These valuation models are subject to a process of due diligence and validation before they become operational
and are continuously calibrated. These models are subject to approvals by various functions including risk,
treasury and finance functions. Finance function is responsible for establishing procedures, governing valuation
and ensuring fair values are in compliance with accounting standards.

Valuation methodologies adopted

• Fair values of investments held for trading under FVTPL and investments held under FVOCI have been
determined under level 1 (Refer note 49) using quoted market prices of the underlying instruments;

• Fair value of loans held for a business model that is achieved by both collecting contractual cash flows and
partially selling the loans through partial assignment to willing buyers and which contain contractual terms
that give rise on specified dates to cash flows that are solely payments of principal and interest are measured
at FVOCI. The fair value of these loans have been determined under level 3.

The Company has determined that the carrying values of cash and cash equivalents, trade receivables, short
term loans, floating rate loans, trade payables, short term debts, borrowings, bank overdrafts and other current
liabilities are a reasonable approximation of their fair value and hence their carrying values are deemed to be
fair value.

49. Fair value hierarchy

The Company determines fair values of financial instruments according to the following hierarchy:

Level 1- valuation based on quoted market price: financial instruments with quoted prices for identical
instruments in active markets that the Company can access at the measurement date.

Level 2- valuation using observable inputs: financial instruments with quoted prices for similar instruments in
active markets or quoted prices for identical or similar instruments in inactive markets and financial
instruments valued using models where all significant inputs are observable.

Level 3- valuation technique with significant unobservable inputs: financial instruments valued using valuation
techniques where one or more significant inputs are unobservable.

50. Risk management objectives and policies (Contd.)

(a) Liquidity risk

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive
concentrations on either side of the Balance Sheet.

The Company maintains a judicious mix of borrowings from banks, money markets and continues to diversify its
sources of borrowings with an emphasis on longer tenor borrowings. This strategy of balancing varied sources
of funds and long tenor borrowings along with liquidity buffer has helped the Company maintain a healthy asset
liability position. The overall borrowings including debt securities stood at H 82,071.92 crore as of 31 March 2025
(Previous year H 69,129.32 crore).

The Company continuously monitors liquidity in the market; and as a part of its ALM strategy maintains a
liquidity buffer through an active investment desk to reduce this risk. The Company endeavours to maintain
liquidity buffer in the range of 3% to 5% of its overall borrowings in normal market scenario. The average liquidity
buffer for FY2025 was H 5,051 crore. Liquidity buffer was at H 2,394 crore as on 31 March 2025.

RBI vide Scale Based Regulations 2023 (SBR) and Master Directions for Housing Finance Company 2021 (as
amended from time to time) 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 tools and principles. The Company has a
Liquidity Risk Management Framework which covers liquidity risk management policy, strategies and practices,
liquidity coverage ratio (LCR), stress testing, contingency funding plan, maturity profiling, liquidity risk
measurement - stock approach, currency risk, 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). As of
31 March 2025, the Company maintained a LCR of 192.81%, well in excess of the RBI''s stipulated norm of 100%.
The Company has a Board approved Contingency Funding Plan (CFP) to respond quickly to any anticipated
or actual stressed market conditions. The primary goal of the Contingency Funding Plan (CFP) is to provide a
framework of action plan for contingency funding when the Company experiences a reduction to its liquidity
position, either from causes unique to the Company or systemic events limiting its ability to maintain normal
operations and service to customers. The CFP defines the framework to assess, measure, monitor, and respond
to potential contingency funding needs. CFP also clearly lays down the specific contingency funding sources,
conditions related to the use of these sources and when they would be used. Roles and responsibilities of the
Crisis Management Group constituted under the CFP have been identified to facilitate the effective execution of
CFP in a contingency event.

The table below summarises the maturity profile of the undiscounted cashflow of the Company''s
financial liabilities:

Credit risk is the risk of financial loss arising out of customers or counterparties failing to meet their repayment
obligations to the Company. The Company has a diversified lending model and focuses on five broad categories
viz: (i) home loans, (ii) loan against property (iii) lease rental discounting, (iv) developer loans, and (v) unsecured
loans. The Company assesses the credit quality of all financial instruments that are subject to credit risk.

Classification of financial assets under various stages

The Company classifies its financial assets in three stages having the following characteristics:

• Stage 1: unimpaired and without significant increase in credit risk since initial recognition on which a
12-month allowance for ECL is recognised;

• Stage 2: a significant increase in credit risk since initial recognition on which a lifetime ECL is recognised; and

• Stage 3: objective evidence of impairment, and are therefore considered to be in default or otherwise credit
impaired on which a lifetime ECL is recognised.

Treatment and classification methodology of different stages of financial assets is detailed in note no. 4.4 (i)
Computation of impairment on financial instruments

The Company calculates impairment on financial instruments as per ECL approach prescribed under Ind AS 109
''Financial instrument''. ECL uses three main components: PD (probability of default), LGD (loss given default)
and EAD (exposure at default) along with an adjustment considering forward macro economic conditions. For
further details of computation of ECL please refer to significant accounting policies note no 4.4 (i).

The Company recalibrates components of its ECL model periodically by; (1) using the available incremental and
recent information, except where such information do not represent the future outcome, and (2) assessing
changes to its statistical techniques for a granular estimation of ECL. Accordingly, during the year, the Company
has redeveloped its ECL model and implemented the same with the approval of Audit Committee and the Board.

The Company follows simplified ECL approach under Ind AS 109 ''Financial Instruments'' for trade receivables,
and other financial assets.

The table below summarises the approach adopted by the Company for various components of ECL viz. PD,

EAD and LGD across product lines using empirical data where relevant:

The Company periodically monitors the market value of collateral and evaluates its exposure and loan to value
metrics for high risk customers. The Company exercises its right of repossession across all secured products.

It also resorts to invoking its right under the SARFAESI Act and other judicial remedies available against its
mortgages and commercial lending business. The repossessed assets are either sold through auction or
released to delinquent customers in case they come forward to settle their dues. The Company does not record
repossessed assets on its Balance Sheet as non-current assets held for sale.

Analysis of concentration risk

The Company focuses on granulisation of loans portfolios by expanding its geographic reach to reduce
geographic concentrations while continually calibrating its product mix across its five categories of lending
mentioned above.

ECL sensitivity analysis to forward economic conditions and management overlay

Allowance for impairment on financial instruments recognised in the financial statements reflect the effect of
a range of possible economic outcomes, calculated on a probability-weighted basis, based on the economic
scenarios described below. The recognition and measurement of expected credit losses (''ECL) involves the use
of estimation. It is necessary to formulate multiple forward-looking economic forecasts and its impact as an
integral part of ECL model.

The ECL model and its input variables are recalibrated periodically using available incremental and recent
information. It is possible that internal estimates of PD and LGD rates used in the ECL model may not always
capture all the characteristics of the market and the external environment as at the reporting date. To
reflect this, qualitative adjustments or overlays are made as temporary adjustments to reflect the emerging
risks reasonably.

Methodology

The Company has adopted the use of three scenarios, representative of its view of forecast economic
conditions, required to calculate unbiased estimation of forward looking economic adjustment to its ECL. They
represent a most likely outcome i.e. central scenario and two less likely outer scenarios referred to as the upside
and downside scenarios. The Company has assigned a 10% probability to the two outer scenarios, while the
central scenario has been assigned an 80% probability. These weights are deemed appropriate for the unbiased
estimation of impact of macro factors on ECL. The key scenario assumptions are used keeping in mind external
forecasts and Management estimates which ensure that the scenarios are unbiased.

The Company uses multiple economic factors and test their correlations with past loss trends witnessed for
building its forward economic guidance (FEG) model. During the current year, the Company evaluated various
macro factors GDP growth rates, growth of bank credit, wholesale price index (WPI), consumer price index
(CPI), industrial production index, unemployment rate, crude oil prices and policy interest rates.

Based on past correlation trends, CPI (inflation) and GDP growth rates reflected acceptable correlation
with past loss trends and were considered appropriate by the Management. GDP has a direct relation with
the income levels whereas inflation and inflationary expectations affect the disposable income of people.
Accordingly, both these macro-variables directly and indirectly impact the economy. These factors were
assigned appropriate weights to measure ECL in forecast economic conditions.

For GDP growth rate data, the Company has considered RBI projections and data published by Ministry of
Statistics & Programme Implementation, Government of India.

- While formulating the central scenario, the Company has considered average growth rate of 6.5% for
next year.

- For the downside scenario, the Company believes that the downside risks might have passed, however,
the downside nominal GDP growth rate might reach 0%. However, as per mean reversion approach,
the downside scenario assumes it to recover from the peak and normalise to around 8% within next
three years.

- For the upside scenario, the Company acknowledges various surveys and studies indicating improving
economic situation and estimates nominal GDP growth rate might reach to 19%. Subsequently, as per mean
reversion approach, the upside scenario assumes it to normalize from the peak and normalise to around 8%
within next three years.

The Reserve Bank of India (RBI) projected CPI inflation for year FY 25-26 at 4%, with Q1 at 3.6%, Q2 at 3.9%, Q3
at 3.8%, and Q4 at 4.4%.

- The central scenario assumed by the Company considered inflation of around 5 - 5.5% on conservative
basis average inflation trend of last three years.

- For the downside scenario, the Company considers that the inflation risk may continue due to various
uncertainties (geopolitical conflict, tariffs etc), and therefore assumes the inflation to touch a peak of
around 9% and subsequently normalise to around 5.8% within next three years.

- For the upside scenario, we believe that there would be certain factors which might come into play viz,
base effect, higher food grain production, continuously falling WPI, better supply chain management etc,
and, therefore, inflation may see easing to a base of around 2.4% before averaging back 5.8% within next
three years.

Additionally, the ECL model and its input variables are recalibrated periodically using available incremental
and recent information. It is possible that internal estimates of PD and LGD rates used in the ECL model may
not always capture all the characteristics of the market / external environment as at the date of the financial
statements. To reflect this, qualitative adjustments or overlays are made as temporary adjustments to reflect
the emerging risks reasonably.

Operational risk is the risk arising from inadequate or failed internal processes, people or systems, or from
external events. Operational risk is inherent in the Company''s business activities, as well as in the related
support functions. BHFL has in place an internal Operational Risk Management (ORM) Framework to manage
operational risk in an effective and efficient manner. This framework aims at assessing and measuring the
magnitude of risks, its monitoring and mitigation. The key objective is to enable the Company to ascertain
an increased likelihood of an operational risk event occurring in a timely manner to take steps to mitigate the
same. It starts with identifying and defining KRI''s/KPIs through process analysis and ending with formulation of
action plans in response to the observed trends in the identified metrics. This is achieved through determining
key process areas, converting them to measurable and quantifiable metrics, setting tolerance thresholds for
the same and monitoring and reporting on breaches of the tolerance thresholds in respect of these metrics.
Corrective actions are initiated to bring back the breached metrics within their acceptable threshold limits
by conducting the root cause analysis to identify the failure of underlying process, people, systems, or
external events.

Further, the Company has a comprehensive internal control systems and procedures laid down around various
key activities viz. loan acquisition, customer service, IT operations, finance function etc. Internal Audit also
conducts a detailed review of all the functions at least once a year which helps to identify process gaps on
timely basis. Information technology and operations functions have a dedicated compliance and control units
who on continuous basis review internal processes. This enables the Management to evaluate key areas of
operational risks and the process to adequately mitigate them on an ongoing basis.

The Company has a robust Disaster Recovery (DR) plan and Business Continuity Plan (BCP) to ensure
continuity of its operations including services to customers in situations such as natural disasters, technological
outage, etc. Robust periodic testing is carried, and results are analysed to address any gaps in the framework.
DR and BCP audits are conducted on a periodical basis to provide assurance regarding its effectiveness.

(A) Employee stock option plan of Bajaj Housing Finance Limited

The Board of Directors at its meeting held on 24 April 2024, approved an issue of stock options up to a
maximum of 5% of the then issued equity capital of the Company aggregating to 39,09,78,763 equity shares of
the face value of H 10 each in a manner provided in the SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines 1999 subject to the approval of the shareholders. The options issued under
the ESOP Scheme vest over a period of not less than 1 year and not later than 5 years from the date of grant
with the vesting condition of continuous employment with the Company or the Group except in case of death or
permanent incapacity of an Option Grantee where the minimum vesting period of 1 year from the date of grant
shall not apply and settled by issue of shares at exercise price.

The Nomination and Remuneration Committee of the Company has approved the following grants to tenured
employees in managerial and leadership positions upon achieving defined thresholds of performance and
leadership behaviour in accordance with the Stock Option Scheme. Details of grants given up to the reporting
date under the scheme are given as under:

Determination of expected volatility

Expected volatility has been calculated based on the daily closing market price of the comparable entities.

For the year ended 31 March 2025, the Company has accounted expense of I 16.97 crore as employee benefit
expenses (note no.34) on the aforesaid employee stock option plan (Previous year I Nil). The balance in
employee stock option outstanding account is I 16.97 crore as of 31 March 2025 (Previous year I Nil).

(B) Employee stock option plan of Bajaj Finance Limited

The Nomination and Remuneration Committee of the Bajaj Finance Limited (Holding Company) has approved
grants to select senior level executives of the Company in accordance with the Stock Option Scheme. Details
of grants given upto the reporting date under the scheme, duly adjusted for sub-division of shares and issue of
bonus shares thereon, are given as under:

(C) Employee stock option plan of Bajaj Finserv Limited

The Nomination and Remuneration Committee of the Bajaj Finserv Limited (Ultimate Holding Company) has
approved grant of 47,340 stock options at an exercise price of H 1,482.64, adjusted for split and bonus, having
a bullet vesting of 5 years to select employees of the Company in accordance with the Stock Option Scheme of
the Ultimate Holding Company. Of the options granted, no option has vested, cancelled or exercised during the
year. The weighted average fair value of the option granted is H 689.20. The Ultimate Holding Company has used
the fair value method to account for the compensation cost of stock options to employees. The fair value of
options used are estimated on the date of grant using the Black - Scholes Model. The key assumptions used in
Black - Scholes Model for calculating fair value as on the date of respective grants are:

Disclosures on Risk Exposure in Derivatives
A. Qualitative disclosure
Financial Risk Management

The Company has to manage various risks associated with the lending business. These risks include liquidity
risk, interest rate risk and counterparty risk.

The Investment and market risk policy, ALM Policy and currency and interest rate risk hedging policy as
approved by the Board sets limits for exposures on various parameters. The Company manages its interest rate
in accordance with the guidelines prescribed therein.

Liquidity risk and interest rate risks, arising out of maturity mismatch of assets and liabilities, are managed
through regular monitoring of maturity profiles. As a part of Asset Liability Management, the Company has also
entered into interest rate swaps wherein it has converted a portion of its fixed rate rupee liabilities into floating
rate liability. Counter party risk is reviewed periodically to ensure that exposure to various counter parties is well
diversified and is within the limits specified by policy.

Constituents of Hedge Management Framework

Financial Risk Management of the Company constitutes the Audit & Governance Committee, Asset Liability
Committee (ALCO), Investment Committee and the Risk Management Committee.

The Company periodically monitors various counter party risk and market risk limits, within the risk architecture
and processes of the Company.

Hedging policy

The Company has a Interest rate risk and currency risk hedging approved by the Board of Directors. For
derivative contracts designated as hedges, the Company documents at inception, the relationship between the
hedging instrument and hedged item.Hedged book is reviewed periodically by the Investment Committee/ALCO
at each reporting period. Hedge effectiveness is measured by the degree to which changes in the fair value or
cashflows of the hedged item that are attributed to the hedged risk are offset by changes in the fair value or
cashflows of the hedging instrument.

Measurement and accounting

All derivative contracts are recognised on the Balance Sheet and measured at fair value. Hedge accounting is
applied to all the derivative instruments as per IND AS 109. Gains/loss, arising on account of fair value changes
in hedged item and hedging instrument, are recognised in the Statement of Profit and Loss.

The Company has entered into fair value hedges like interest rate swaps on fixed rate rupee liabilities as a part
of the interest rate risk management whereby fixed rate liabilities are converted to floating rate liabilities. The
Company has a net mark to market gain of H 41.22 crore on outstanding interest rate swap book.

53. Disclosures as required in terms of Master Direction - Non-Banking Financial Company -
Housing Finance Company (Reserve Bank) Directions, 2021, RBI/2020-21/73 DOR.FiN.hFc.
CC.No.120/03.10.136/2020-21 dated 17 February 2021 as amended from time to time (Contd.)

53.2.6.3 Details of financing of Parent Company products

The Company does not have any financing of Parent Company products during the current and previous year.

53.2.6.4 Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the HFC

The Company has not exceeded the prudential exposure limits during the current and previous year.

53.2.6.5 Unsecured Advances

The Company has unsecured advances net of ECL of H 1,982.14 crore (Previous year H 2,017.93 crore) which
includes advances net of ECL of H 266.84 crore (Previous year H 271.19 crore) secured against intangible assets.

53.2.6.6 Exposure to group companies engaged in real estate business

The Company does not have any exposure to group companies engaged in real estate business during the
current and previous year.

53.3 Miscellaneous

53.3.1 Registration obtained from other financial sector regulators

The Company has obtained registration from Financial Intelligence Units, India vide Registration No. FI00030844

The Company has obtained registration from Insurance Regulatory and Development Authority vide
Registration No. CA0885

53.3.2 Disclosure of penalties imposed by NHB/RBI and other regulators

No penalty was imposed by NHB or any other regulators in current year. During the financial year 2023-24,
penalty of H 0.05 crore was imposed by RBI.

53.3.3 Related party transactions

Refer Note no. 43 Disclosure of transactions with related parties as required by Ind AS 24

53.4.13 There were no breach of covenants of loans availed or debt securities issued in current year and previous
year.

53.4.14 No disclosure on divergence in asset classification and provisioning for NPAs is required with respect
to RBI''s supervisory inspection for the year ended 31 March 2024 and for the year ended 31 March 2023 as
per the requirement of the Master Direction - Non-Banking Financial Company - Housing Finance Company
(Reserve Bank) Directions, 2021 as amended from time to time.

The Liquidity coverage ratio (LCR) is one of the key parameters closely monitored by RBI to enable a more
resilient financial sector. The objective of the LCR is to promote an environment wherein Balance Sheet carry a
strong liquidity for short term cash flow requirements. To ensure strong liquidity HFCs are required to maintain
adequate pool of unencumbered high-quality liquid assets (HQLA) which can be easily converted into cash to
meet their stressed liquidity needs for 30 calendar days. The LCR is expected to improve the ability of financial
sector to absorb the shocks arising from financial and/or economic stress, thus reducing the risk of spill over
from financial sector to real economy.

The Liquidity Risk Management of the Company is managed by the Asset Liability Committee (ALCO) under the
governance of Board approved Liquidity risk framework and Asset liability management policy. The LCR levels
for the Balance Sheet date is derived by arriving the stressed expected cash inflow and outflow for the next 30
calendar days. To compute stressed cash outflow, all expected and contracted cash outflows are considered
by applying a stress of 15%. Similarly, inflows for the Company is arrived at by considering all expected and
contracted inflows by applying a haircut of 25%.

Company for purpose of computing outflows, has considered: (1) all the contractual debt repayments, (2)
expected outflows from credit facilities contracted with customers, and (3) other expected or contracted cash
outflows. Inflows comprise of: (1) expected receipt from all performing loans and other receivables, (2) liquid
investment which are unencumbered and have not been considered as part of HQLA and (3) CC/OD/committed
credit line from banks and parent Company.

For the purpose of HQLA the Company considers: (1) Unencumbered government securities, (2) Cash and
Bank balances.

The LCR is computed by dividing the stock of HQLA by its total net stressed cash outflows over next 30 days.
LCR guidelines have become effective from 1 December 2021, requiring HFCs to maintain minimum LCR of
50%, LCR requirment is gradually increased to 100% by 1 December 2024.

58. Disclosure pursuant to Regulatory Guidance on Implementation of Indian Accounting
Standards by NBFCs as referred in Annex II of Master Direction-Reserve Bank of India
(Non-Banking Financial Company - Scale Based Regulation) Directions, 2023, as amended
from time to time

Policy for sales out of amortised cost business model portfolios

Refer Note No. 4.3(i)(a)

(c) No stressed loans transferred during the financial year ended 31 March 2025 and year ended
31 March 2024.

62. Disclosures pursuant to RBI Notification - RBI/DOR/2021-22/85 DOR.STR.REC.53/21.04.177/2021-22
dated 24 September 2021

The Company has not entered into any securitisation transactions during the current year and previous year.

63. Amounts less than H 50,000 have been shown at actual against respective line items which are statutorily
required to be disclosed.

64. Figures for the previous periods have been regrouped, wherever necessary, to make them comparable with
the current period.

The accompanying notes are an integral part of the financial statements

As per our report of even date On behalf of the Board of Directors

For Singhi & Co. For Mukund M. Chitale & Co. Atul Jain Sanjiv Bajaj

Chartered Accountants Chartered Accountants Managing Director Chairman

Firm Registration No.: 302049E Firm Registration No.: 106655W DIN: 09561712 DIN: 00014615

Amit Hundia Saurabh Chitale Gaurav Kalani Rajeev Jain

Partner Partner Chief Financial Officer Vice Chairman

Membership No.: 120761 Membership No.: 111383 din- 01550158

Atul Patni Anami N Roy

Company Secretary Director

Pune: 23 April 2025 FCS: F10094 DIN: 01361110

---

Mar 31, 2024

4.7 Provisions, contingent liabilities and Commitment

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. The Company also discloses present obligations for which a reliable estimate cannot be made as a contingent liability. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Commitments are future liabilities, which include undrawn loan commitments, estimated amount of contracts remaining to be executed on capital account and not provided for.

4.8 Retirement and other employee benefits

(a) Short term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The liability for accumulated leaves which is eligible for encashment within the same calendar year is provided for at prevailing salary rate for the entire unavailed leave balance as at the Balance Sheet date.

(b) Employment benefit plans

The Company operates defined contribution, defined benefit and other long term service benefits.

Payment to defined contribution plans i.e. provident Fund and employees'' state insurance are charged as an expenses as the employee render service.

Defined benefit plans for gratuity is funded by the Company. Payment for present liability of future payment of gratuity is made to the approved gratuity fund viz. Bajaj Auto Limited gratuity fund trust, which covers the same under cash accumulation policy and debt fund of the Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). However, any deficits in plan assets managed by LIC and BALIC as compared to actuarial liability determined by an appointed actuary are recognised as a liability. Actuarial liability is computed using the projected unit credit method. The Calculation includes assumptions with regard to discount rate, salary escalation rate, attrition rate and mortality rate. Management determines these assumptions in consultation with the plan''s actuaries and past trend. Gains and losses through remeasurements of the net defined benefit liability/assets are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. The effect of any planned amendments are recognised in Statement of Profit and Loss. Remeasurements are not reclassified to profit or loss in subsequent periods.

(c) Share based payments

The Company enters into equity settled share-based payment arrangement with its employees as compensation for the provision of their services. The Holding Company determines the fair value of the employee stock options on the grant date using the Black Scholes model. The total cost of the share option is accounted for on a straight-line basis over the vesting period of the grant. The cost attributable to the services rendered by the employees of the Company is recognised as employee benefits expenses in profit or loss.

4.9 Fair value measurement

The Company measures its qualifying financial instruments at fair value on each balance sheet date.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

In case of financial instruments are classified on the basis of valuation techniques that features one or more significant market inputs that are unobservable, then measurement of fair value becomes more judgemental. Details on level 3 financial instruments along with sensitivity and assumptions are set out in note no. 49.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair value measurement as a whole. For a detailed information on the fair value hierarchy, refer note no. 48 and 49.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.

4.10 Collateral Repossession

The nature of products across these broad product categories are either unsecured or secured by collateral. Although collateral is an important risk mitigant of credit risk, the Company''s practice is to lend on the basis of assessment of the customer''s ability to repay rather than placing primary reliance on collateral. Based on the nature of product and the Company''s assessment of the customer''s credit risk, a loan may be offered with suitable collateral. Depending on its form, collateral can have a significant financial effect in mitigating the Company''s credit risk.

The Company periodically monitors the market value of collateral and evaluates its exposure and loan to value metrics for high risk customers. The Company resorts to invoking its right under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and other judicial remedies available against its mortgages and commercial lending business. The repossessed assets are either sold through auction or released to delinquent customers in case they come forward to settle their dues.

4.11 Recent Accounting Pronouncements

Ministry of Corporate Affairs (''MCA'') notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Nature and purpose of other equity

i. Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013.

ii. Statutory Reserve in terms of Section 29C of the National Housing Bank Act, 1987

Reserve Fund is created as per the Section 29C of the National Housing Bank Act, 1987, which requires every housing finance company to create a reserve fund and transfer therein a sum not less than twenty percent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared. The Company has transferred twenty percent of it''s net profit during the previous year to the reserve fund. This includes Special Reserve created to avail the deduction as per the provisions of Section 36(1) (viii) of the Income Tax Act, 1961 on profits derived from the business of providing long-term finance for construction or purchase of houses in India for residential purposes.

iii. Retained earnings

Retained earnings represents the surplus in profit and loss account after appropriation.

The Company recognises change on account of remeasurement of the net defined benefit liability/ (asset) as part of retained earnings with separate disclosure, which comprises of:

(a) actuarial gains and losses; and

(b) return on plan assets, excluding amounts included in net interest on the net defined benefit liability/(asset).

iv. Other comprehensive income (a) On loans

The Company recognises changes in the fair value of debt instruments held with a dual business objective of collect and sell in other comprehensive income. These changes are accumulated in the FVOCI debt investments reserve. The Company transfers amounts from this reserve to profit or loss when the debt instrument is sold. Any impairment loss on such instruments is reclassified immediately to the Statement of Profit and Loss.

45. Capital

The Company actively manages its capital base to cover risks inherent to its business and meets the capital adequacy requirements of the regulator, the Reserve Bank of India. The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by the RBI.

(i) Capital management Objective

The Company''s objective is to maintain appropriate levels of capital to support its business strategy taking into account the regulatory, economic and commercial environment. The Company aims to maintain a strong capital base to support its growth strategy and the risks inherent to its business. The Company endeavours to maintain a higher capital base than the mandated regulatory capital at all times.

Planning

The Company''s assessment of capital requirement is aligned to its planned growth which forms part of an annual operating plan which is approved by the Board and also a long range strategy. These growth plans are aligned to assessment of risks- which include credit, liquidity and interest rate.

The Company monitors its capital to risk weighted assets ratio (CRAR) on a monthly basis through its assets liability management committee (ALCO).

The Company endeavours to maintain its CRAR higher than the mandated regulatory norm. Accordingly, increase in capital is planned well in advance to ensure adequate funding for its growth.

47. Events after reporting date

There have been no events after the reporting date that require adjustment in these financial statements.

The Company has allotted 1,10,74,19,709 equity shares having face value of H 10 each under right issue to its Holding Company (Bajaj Finance Limited) on 3 April 2024 at a premium of H 8.06 per share involving aggregate amount of H 19,99,99,99,944.54.

48. Fair values

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.

This note describes the fair value measurement of both financial and non-financial instruments.

Valuation framework

The Company has an internal fair value assessment team which assesses the fair values for assets qualifying for fair valuation.

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.

These valuation models are subject to a process of due diligence and validation before they become operational and are continuously calibrated. These models are subject to approvals by various functions including risk, treasury and finance functions. Finance function is responsible for establishing procedures, governing valuation and ensuring fair values are in compliance with accounting standards.

Valuation methodologies adopted

Fair values of financial assets, other than those which are subsequently measured at amortised cost, have been arrived at as under:

• Fair values of investments held for trading under FVTPL have been determined under level 1 (refer note 49) using quoted market prices of the underlying instruments;

• Fair value of loans held for a business model that is achieved by both collecting contractual cash flows and partially selling the loans through partial assignment to willing buyers and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at FVOCI. The fair value of these loans have been determined under level 3.

The Company has determined that the carrying values of cash and cash equivalents, trade receivables, short term loans, floating rate loans, trade payables, short term debts, borrowings, bank overdrafts and other current liabilities are a reasonable approximation of their fair value and hence their carrying value are deemed to be fair value.

49. Fair value hierarchy

The Company determines fair values of financial instruments according to the following hierarchy:

Level 1- valuation based on quoted market price: financial instruments with quoted prices for identical instruments in active markets that the Company can access at the measurement date.

Level 2- valuation using observable inputs: financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.

Level 3- valuation technique with significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable.

(a) Liquidity and funding risk

The Company''s ALCO monitors asset liability mismatches to ensure that there are no imbalances or excessive concentrations on either side of the Balance Sheet.

The Company maintains a judicious mix of borrowings from banks, money markets and continues to diversify its sources of borrowings with an emphasis on longer tenor borrowings. This strategy of balancing varied sources of funds and long tenor borrowings along with liquidity buffer framework has helped the Company maintain a healthy asset liability position and cost of borrowing during the year ended 31 March 2024, weighted daily average cost of borrowing was 7.71% versus 6.88% despite highly uncertain market conditions.

The overall borrowings including debt securities stood at H 69,129 crore as of 31 March 2024(previous year H 53,745 crore).

The Company continuously monitors liquidity in the market; and as a part of its ALM strategy maintains a liquidity buffer through an active investment desk to reduce this risk. The Company endeavours to maintain liquidity buffer in the range of 5% to 7% of its overall borrowings in normal market scenario. The average liquidity buffer for FY2024 was H 3,624 crore. Liquidity buffer was at H 2,002 crore as on 31 March 2024.

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 tools and principles. The Company has a Liquidity Risk Management Framework which covers liquidity risk management policy, strategies and practices, liquidity coverage ratio (LCR), stress testing, contingency funding plan, maturity profiling, liquidity risk measurement - stock approach, currency risk, 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).

As of 31 March 2024, the Company maintained a LCR of 192.31%, well in excess of the RBI''s stipulated norm of 85%. LCR requirement will move to 100% by December 2024.

The Company has a Board approved Contingency Funding Plan (CFP) to respond quickly to any anticipated or actual stressed market conditions. The primary goal of the Contingency Funding Plan (CFP) is to provide a framework of action plan for contingency funding when the company experiences a reduction to its liquidity position, either from causes unique to the Company or systemic events limiting its ability to maintain normal operations and service to customers. The CFP defines the framework to assess, measure, monitor, and respond to potential contingency funding needs. CFP also clearly lays down the Specific contingency funding sources, conditions related to the use of these sources and when they would be used. Roles and responsibilities of the Crisis Management Group constituted under the CFP have been identified to facilitate the effective execution of CFP in a contingency event.

Classification of financial assets under various stages

The Company classifies its financial assets in three stages having the following characteristics:

• stage 1: unimpaired and without significant increase in credit risk since initial recognition on which a 12-month allowance for ECL is recognised;

• stage 2: a significant increase in credit risk since initial recognition on which a lifetime ECL is recognised; and

• stage 3: objective evidence of impairment, and are therefore considered to be in default or otherwise credit impaired on which a lifetime ECL is recognised.

Treatment and classification methodology of different stages of financial assets is detailed in note no. 4.4 (i) Computation of impairment on financial instruments

The Company calculates impairment on financial instruments as per ECL approach prescribed under Ind AS 109 ''Financial instrument''. ECL uses three main components: PD (Probability of Default), LGD (loss given default) and EAD (exposure at default) along with an adjustment considering forward macro economic conditions. For further details of computation of ECL please refer to significant accounting policies note no 4.4(i).

The Company recalibrates components of its ECL model periodically by; (1) using the available incremental and recent information, except where such information do not represent the future outcome, and (2) assessing changes to its statistical techniques for a granular estimation of ECL. Accordingly, during the year, the Company has redeveloped its ECL model and implemented the same with the approval of Audit Committee and the Board. The Company follows simplified ECL approach under Ind AS 109 ''Financial instruments'' for trade receivables, and other financial assets.

The table below summarises the approach adopted by the Company for various components of ECL viz. PD,

EAD and LGD across product lines using empirical data where relevant:

Collateral valuation

The Company offers loans to customers across various lending verticals as articulated above. These loans includes both unsecured loans and loans secured by collateral. Although collateral is an important risk mitigant of credit risk, the Company''s practice is to lend on the basis of assessment of the customer''s ability to repay rather than placing primary reliance on collateral. Based on the nature of product and the Company''s assessment of the customer''s credit risk, a loan may be offered with suitable collateral. Depending on its form, collateral can have a significant financial effect in mitigating the Company''s credit risk.

Analysis of Concentration Risk

The Company focuses on granulisation of loans portfolios by expanding its geographic reach to reduce geographic concentrations while continually calibrating its product mix across its five categories of lending mentioned above.

ECL sensitivity analysis to forward economic conditions and management overlay

Allowance for impairment on financial instruments recognised in the financial statements reflect the effect of a range of possible economic outcomes, calculated on a probability-weighted basis, based on the economic scenarios described below. The recognition and measurement of expected credit losses (''ECL) involves the use of estimation. It is necessary to formulate multiple forward-looking economic forecasts and its impact as an integral part of ECL model.

The ECL model and its input variables are recalibrated periodically using available incremental and recent information. It is possible that internal estimates of PD and LGD rates used in the ECL model may not always capture all the characteristics of the market and the external environment as at the reporting date. To reflect this, qualitative adjustments or overlays are made as temporary adjustments to reflect the emerging risks reasonably.

Methodology

The Company has adopted the use of three scenarios, representative of its view of forecast economic conditions, required to calculate unbiased estimation of forward looking economic adjustment to its ECL. They represent a most likely outcome i.e. central scenario and two less likely outer scenarios referred to as the Upside and Downside scenarios. The Company has assigned a 10% probability to the two outer scenarios, while the Central scenario has been assigned an 80% probability. These weights are deemed appropriate for the unbiased estimation of impact of macro factors on ECL. The key scenario assumptions are used keeping in mind external forecasts and management estimates which ensure that the scenarios are unbiased.

The Company uses multiple economic factors and test their correlations with past loss trends witnessed for building its forward economic guidance (FEG) model. During the current year, the Company evaluated various macro factors GDP growth rates, growth of bank credit, wholesale price index (WP), consumer price index (CP), industrial production index, unemployment rate, crude oil prices and policy interest rates.

Based on past correlation trends, CPI (inflation) and GDP growth rates reflected acceptable correlation with past loss trends and were considered appropriate by the Management. GDP has a direct relation with the income levels whereas Inflation and inflationary expectations affect the disposable income of people. Accordingly, both these macro-variables directly and indirectly impact the economy. These factors were assigned appropriate weights to measure ECL in forecast economic conditions.

For GDP growth rate data, the Company has considered data published by Ministry of Statistics & Programme Implementation, Government of India.

- While formulating the Central Scenario, the Company has considered moving average data of last 2 years and used Exponential Smoothing (ETS) algorithm for forecasting purpose.

- For the downside scenario, the Company believes that the downside risks might have passed, however, the downside nominal GDP growth rate might reach 0%. However, as per mean reversion approach, the downside scenario assumes it to recover from the peak and normalise to around 8% within next three years.

- For the upside scenario, the Company acknowledges various surveys and studies indicating improving economic situation and estimates nominal GDP growth rate might reach to 19%. Subsequently, as per mean reversion approach, the upside scenario assumes it to normalize from the peak and normalise to around 8% within next three years.

The Reserve Bank of India (RBI) projected CPI inflation for year FY 2024-25 at 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.

- The Central Scenario assumed by the Company considered inflation of around 5.5%- 6% on conservative basis average inflation trend of last three years.

- For the downside scenario, the Company considers that the inflation risk may continue due to various uncertainties (geopolitical conflict, elections etc), and therefore assumes the inflation to touch a peak of around 9% and subsequently normalise to around 6% within next three years.

- For the upside scenario, we believe that there would be certain factors which might come into play viz, base effect, higher food grain production, continuously falling WPI, better supply chain management etc, and, therefore, inflation may see easing to a base of around 3% before averaging back 6% within next three years.

Additionally, the ECL model and its input variables are recalibrated periodically using available incremental and recent information. It is possible that internal estimates of PD and LGD rates used in the ECL model may not always capture all the characteristics of the market / external environment as at the date of the financial statements. To reflect this, qualitative adjustments or overlays are made as temporary adjustments to reflect the emerging risks reasonably.

(d) Operational risk

Operational risk is the risk arising from inadequate or failed internal processes, people or systems, or from external events. Operational risk is inherent in the Company''s business activities, as well as in the related support functions. BHFL has in place an internal Operational Risk Management (ORM) Framework to manage operational risk in an effective and efficient manner. This framework aims at assessing and measuring the magnitude of risks, its monitoring and mitigation. The key objective is to enable the Company to ascertain an increased likelihood of an operational risk event occurring in a timely manner to take steps to mitigate the same. It starts with identifying and defining KRI''s/KPIs through process analysis and ending with formulation of action plans in response to the observed trends in the identified metrics. This is achieved through determining key process areas, converting them to measurable and quantifiable metrics, setting tolerance thresholds for the same and monitoring and reporting on breaches of the tolerance thresholds in respect of these metrics. Corrective actions are initiated to bring back the breached metrics within their acceptable threshold limits by conducting the root cause analysis to identify the failure of underlying process, people, systems, or external events.

Further, the Company has a comprehensive internal control systems and procedures laid down around various key activities viz. loan acquisition, customer service, IT operations, finance function etc. Internal Audit also conducts a detailed review of all the functions at least once a year which helps to identify process gaps on timely basis. Information Technology and Operations functions have a dedicated compliance and control units who on continuous basis review internal processes. This enables the Management to evaluate key areas of operational risks and the process to adequately mitigate them on an ongoing basis.

The Company has a robust Disaster Recovery (DR) plan and Business Continuity Plan (BCP) to ensure continuity of its operations including services to customers in situations such as natural disasters, technological outage, etc. Robust periodic testing is carried, and results are analysed to address any gaps in the framework. DR and BCP audits are conducted on a periodical basis to provide assurance regarding its effectiveness.

A. Qualitative Disclosure Financial Risk Management

The Company has to manage various risks associated with the lending business. These risks include liquidity risk, interest rate risk and counterparty risk.

The Investment and market risk policy, ALM Policy and currency and interest rate risk hedging policy as approved by the Board sets limits for exposures on various parameters. The Company manages its interest rate in accordance with the guidelines prescribed therein.

Liquidity risk and Interest rate risks, arising out of maturity mismatch of assets and liabilities, are managed through regular monitoring of maturity profiles. As a part of Asset Liability Management, the Company has also entered into interest rate swaps wherein it has converted a portion of its fixed rate rupee liabilities into floating rate liability. Counter party risk is reviewed periodically to ensure that exposure to various counter parties is well diversified and is within the limits specified by policy.

Constituents of Hedge Management Framework

Financial Risk Management of the Company constitutes the Audit & Governance Committee, Asset Liability Committee (ALCO), Investment Committee and the Risk Management Committee.

The Company periodically monitors various counter party risk and market risk limits, within the risk architecture and processes of the Company.

Hedging Policy

The Company has a Interest rate risk and currency risk hedging approved by the Board of Directors. For derivative contracts designated as hedges, the Company documents at inception, the relationship between the hedging instrument and hedged item. Hedge effectiveness is ascertained periodically on a forward looking basis and is reviewed by the Investment Committee/ALCO at each reporting period. Hedge effectiveness is measured by the degree to which changes in the fair value or cashflows of the hedged item that are attributed to the hedged risk are offset by changes in the fair value or cashflows of the hedging instrument.

Measurement and Accounting

All derivative contracts are recognised on the balance sheet and measured at fair value. Hedge accounting is applied to all the derivative instruments as per IND AS 109. Gain/loss arising on account of fair value changes are recognised in the Statement of Profit and Loss to the extent of ineffective portion of hedge instruments and hedged items. The gains/losses of effective portion of hedge instrument are offset against gain/losses of hedged items in P&L or in Other Comprehensive Income depending on the type of hedge.

The Company has entered into fair value hedges like interest rate swaps on fixed rate rupee liabilities as a part of the Interest rate risk management whereby a portion of the fixed rate liabilities are converted to floating rate. The Company has a mark to market gain of H 10.83 crore on outstanding fair value hedges.

58. Disclosures in respect of Guidelines on Maintenance of Liquidity Coverage Ratio (LCR) as referred in para 3.1.2 of the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 and Annex II referred in para 15A of the Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit

taking Company and Deposit taking Company (Reserve Bank) Directions, 2016. (Contd.)

The Liquidity Coverage Ratio (LCR) is one of the key parameters closely monitored by RBI to enable a more resilient financial sector. The objective of the LCR is to promote an environment wherein balance sheet carry a strong liquidity for short term cash flow requirements. To ensure strong liquidity HFCs are required to maintain adequate pool of unencumbered high-quality liquid assets (HQLA) which can be easily converted into cash to meet their stressed liquidity needs for 30 calendar days. The LCR is expected to improve the ability of financial sector to absorb the shocks arising from financial and/or economic stress, thus reducing the risk of spill over from financial sector to real economy.

The Liquidity Risk Management of the Company is managed by the Asset Liability Committee (ALCO) under the governance of Board approved Liquidity Risk Framework and Asset Liability Management policy. The LCR levels for the balance sheet date is derived by arriving the stressed expected cash inflow and outflow for the next 30 calendar days. To compute stressed cash outflow, all expected and contracted cash outflows are considered by applying a stress of 15%. Similarly, inflows for the Company is arrived at by considering all expected and contracted inflows by applying a haircut of 25%.

Company for purpose of computing outflows, has considered: (1) all the contractual debt repayments, (2) expected outflows from credit facilities contracted with customers, and (3) other expected or contracted cash outflows. Inflows comprise of: (1) expected receipt from all performing loans and other receivables, (2) liquid investment which are unencumbered and have not been considered as part of HQLA and (3) CC/OD/ Committed credit line from Banks and parent company.

For the purpose of HQLA the Company considers: (1) Unencumbered government securities, (2) Cash and Bank balances.

The LCR is computed by dividing the stock of HQLA by its total net stressed cash outflows over next 30 days. LCR guidelines have become effective from 1 December 2021, requiring HFCs to maintain minimum LCR of 50%, LCR is gradually required to be increased to 100% by 1 December 2025. HFCs are required to maintain LCR of 85% as on 31 March 2024.

59. Disclosure pursuant to RBI Notification - RBI/2019-20/170 DOR (NBFC).CC.PD. No.109/22.10.106/2019-20 Dated 13 March 2020 - A comparison between provisions required under Income recognition, asset classification and provisioning (IRACP) and impairment allowances as per Ind AS 109 ''Financial instruments''

59.1 Policy for sales out of amortised cost business model portfolios

Refer Note No. 4.3 (i) (a)

62. Disclosures pursuant to RBI Notification - RBI/DOR/2021-22/85 DOR.STR REC.53/21.04.177/2021-22 dated 24 September 2021

The Company has not entered into any securitisation transactions during the current year and previous year.

63. Amounts less than H 50,000 have been shown at actual against respective line items which are statutorily required to be disclosed.

64. Figures for the previous periods have been regrouped, wherever necessary, to make them comparable with the current period.

As per our report of even date On behalf of the Board of Directors

For G. D. Apte & Co. For Khandelwal Jain & Co. Atul Jain Sanjiv Bajaj

Chartered Accountants Chartered Accountants Managing Director Chairman

Firm Registration No.: 100515W Firm Registration No.: 105049W DIN: 09561712 DIN: 00014615

Umesh S. Abhyankar Manish Kumar Singhal Gaurav Kalani Rajeev Jain

Partner Partner Chief Financial Officer Vice Chairman

Membership No.: 113053 Membership No.: 502570 din- 01550158

Atul Patni Anami N Roy

Company Secretary Director

Pune: 24 April 2024 FCS: F10094 DIN: 01361110