Notes to Accounts of Aptus Value Housing Finance India Ltd.

Mar 31, 2025

2.8 Provisions

Provisions are recognised when the
Company has a present obligation (legal or
constructive) as a result of a past event, it is
probable that the Company will be required
to settle the obligation, and a reliable
estimate can be made of the amount of the
obligation.

The amount recognised as a provision is the
best estimate of the consideration required
to settle the present obligation at the end

of the reporting period, taking into account
the risks and uncertainties surrounding the
obligation. When a provision is measured
using the cash flows estimated to settle
the present obligation, its carrying amount
is the present value of those cash flows
(when the effect of the time value of money
is material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability).
When discounting is used, the increase in
the provision due to the passage of time is
recognised as a finance cost.

When some or all of the economic benefits
required to settle a provision are expected to
be recovered from a third party, a receivable
is recognised as an asset if it is virtually
certain that reimbursement will be received,
and the amount of the receivable can be
measured reliably. The expense relating to
a provision is presented in the statement of
profit and loss net of any reimbursement.

.9 Assets held for Sale

Assets acquired by the Company under
Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest
Act, 2002 has been classified as assets held
for sale, as their carrying amounts will be
recovered principally through a sale of asset.
This assets are recognised on obtaining
physical possession of the assets which
are in the nature of residential properties. In
accordance with Ind AS 105, the assets held
for sale are measured at the lower of their
carrying amount and the fair value less costs
to sell.

.10 Cash flow statement

Cash flows are reported using the indirect
method, whereby profit / (loss) before tax
is adjusted for the effects of transactions
of non-cash nature and any deferrals or
accruals of past or future cash receipts or
payments.

.10.1 Cash and cash equivalents

Cash comprises cash on hand and demand
deposits with banks. Cash equivalents
are short-term balances (with an original
maturity of three months or less from the
date of acquisition), highly liquid investments
that are readily convertible into known
amounts of cash and which are subject to
insignificant risk of changes in value.

2.11 Earnings per share ("EPS")

Basic earnings per share is computed
by dividing the profit / (loss) after tax by
the weighted average number of equity
shares outstanding during the year. Diluted
earnings per share is computed by dividing
the profit / (loss) after tax as adjusted for
dividend, interest and other charges to
expense or income (net of any attributable
taxes) relating to the dilutive potential equity
shares, by the weighted average number
of equity shares considered for deriving
basic earnings per share and the weighted
average number of equity shares which
could have been issued on the conversion of
all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only
if their conversion to equity shares would
decrease the net profit per share from
continuing ordinary operations. Potential
dilutive equity shares are deemed to be
converted as at the beginning of the period,
unless they have been issued at a later
date. The dilutive potential equity shares
are adjusted for the proceeds receivable
had the shares been actually issued at fair
value. Dilutive potential equity shares are
determined independently for each period
presented. The number of equity shares
and potentially dilutive equity shares are
adjusted for share splits / reverse share splits
and bonus shares, as appropriate. Partly
paid equity shares are treated as a fraction
of an equity share to the extent that they are
entitled to participate in dividends relative to
a fully paid equity share during the reporting
period.

2.12 Segment Reporting

Ind AS 108 establishes standards for the
way that public business enterprises report
information about operating segments
and related disclosures about products
and services, geographic areas, and major
customers. Based on the ''management
approach'' as defined in Ind AS 108, the
Chief Operating Decision Maker ("CODM")
evaluates the Company''s performance
based on an analysis of various performance
indicators by business segments and
geographic segments.

As per the requirements of Ind AS 108
''Operating Segments'', based on evaluation
of financial information for allocation of

resources and assessing performance, the
Company has identified a single segment,
viz. "providing long term housing finance,
loans against property and refinance
loans". Accordingly, there are no separate
reportable segments as per Ind AS 108.

2.13 Determination of Fair value

Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date. The
fair value measurement is based on the
presumption that the transaction to sell
the asset or transfer the liability takes place
either:

? In the principal market for the asset or
liability, or

? In the absence of a principal market, in
the most advantageous market for the
asset or liability

The principal or the most advantageous
market must be accessible by the Company.

The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when pricing
the asset or liability, assuming that market
participants act in their economic best
interest.

A fair value measurement of a non¬
financial asset takes into account a market
participant''s ability to generate economic
benefits by using the asset in its highest and
best use or by selling it to another market
participant that would use the asset in its
highest and best use.

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

In order to show how fair values have been
derived, financial instruments are classified
based on a hierarchy of valuation techniques,
as summarised below:

? Level 1 financial instruments -Those
where the inputs used in the valuation are
unadjusted quoted prices from active
markets for identical assets or liabilities
that the Company has access to at
the measurement date. The Company
considers markets as active only if there
are sufficient trading activities with
regards to the volume and liquidity of the
identical assets or liabilities and when
there are binding and exercisable price
quotes available on the balance sheet
date.

? Level 2 financial instruments-Those

where the inputs that are used for
valuation and are significant, are derived
from directly or indirectly observable
market data available over the entire
period of the instrument''s life. Such inputs
include quoted prices for similar assets
or liabilities in active markets, quoted
prices for identical instruments in inactive
markets and observable inputs other
than quoted prices such as interest rates
and yield curves, implied volatilities, and
credit spreads. In addition, adjustments
may be required for the condition or
location of the asset or the extent to which
it relates to items that are comparable to
the valued instrument. However, if such
adjustments are based on unobservable
inputs which are significant to the entire
measurement, the Company will classify
the instruments as Level 3.

? Level 3 financial instruments -Those that
include one or more unobservable input
that is significant to the measurement as
whole.

For assets and liabilities that are recognised
in the financial statements on a recurring
basis, the Company determines whether
transfers have occurred between levels in
the hierarchy by re-assessing categorisation
(based on the lowest level input that is
significant to the fair value measurement as
a whole) at the end of each reporting period.

The Company evaluates the levelling at
each reporting period on an instrument-by¬
instrument basis and reclassifies instruments
when necessary based on the facts at the
end of the reporting period.

3A Significant accounting judgements,
estimates and assumptions

The preparation of the Company''s financial
statements requires management to make
judgements, estimates and assumptions
that affect the reported amount of revenues,

expenses, assets and liabilities, and the
accompanying disclosures, as well as
the disclosure of contingent liabilities.
Uncertainty about these assumptions and
estimates could result in outcomes that
require a material adjustment to the carrying
amount of assets or liabilities affected in
future period

In the process of applying the Company''s
accounting policies, management has made
the following judgements/estimates, which
have a significant risk of causing a material
adjustment to the carrying amounts of
assets and liabilities within the next financial
year.

3A 1. De-recognition of Financial instruments

The Company enters into securitisation
transactions where financial assets are
transferred to a structured entity for
a consideration. The financial assets
transferred qualify for derecognition only
when substantial risk and rewards are
transferred.

This assessment includes judgements
reflecting all relevant evidence including
the past performance of the assets
transferred and credit risk that the
Company has been exposed to. Based on
this assessment, the Company believes
that the credit enhancement provided
pursuant to the transfer of financial assets
under securitisation are higher than the
loss incurred on the similar portfolios of the
Company hence it has been concluded that
securitisation transactions entered by the
Company does not qualify for de-recognition
since substantial risk and rewards of the
ownership has not been transferred. The
transactions are treated as financing
arrangements and the sale consideration
received is treated as borrowings.

3A 2. Fair value of financial instruments

The fair value of financial instruments 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 another valuation technique. When the
fair values of financial assets and financial

liabilities recorded in the balance sheet
cannot be derived from active markets,
they are determined using a variety of
valuation techniques that include the use
of valuation models. The inputs to these
models are taken from observable markets
where possible, but where this is not feasible,
estimation is required in establishing fair
values. Judgements and estimates include
considerations of liquidity and model inputs
related to items such as credit risk (both
own and counterparty), funding value
adjustments, correlation and volatility.
For further details about determination
of fair value please see Fair value note in
Accounting policy

3A 3. Impairment of financial asset

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

The Company''s ECL calculations are
outputs of complex models with a number
of underlying assumptions regarding
the choice of variable inputs and their
interdependencies. Elements of the ECL
models that are considered accounting
estimates include:

? The Company''s criteria for assessing if
there has been a significant increase in
credit risk and so allowances for financial
assets should be measured on a LTECL
basis and the qualitative assessment

? The segmentation of financial assets
when their ECL is assessed on a collective
basis

? Development of ECL models, including
the various formulas and the choice of
inputs

? Determination of temporary adjustments
as qualitative adjustment or overlays
based on broad range of forward looking
information as economic inputs

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

3A 4. Provisions and other contingent
liabilities

When the Company can reliably measure
the outflow of economic benefits in relation
to a specific case and considers such
outflows to be probable, the Company
records a provision against the case. Where
the probability of outflow is considered to be
remote, or probable, but a reliable estimate
cannot be made, a contingent liability is
disclosed.

Given the subjectivity and uncertainty of
determining the probability and amount of
losses, the Company takes into account a
number of factors including legal advice, the
stage of the matter and historical evidence
from similar incidents. Significant judgement
is required to conclude on these estimates.

20.2 Nature and purpose of reserves:

20.2.1 Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for
limited purposes in accordance with the provisions of the Companies Act, 2013. During the year ended
March 31, 2025, Securities premium was utilised to the extent of Rs. Nil (March 31, 2024 -Nil on account of
expenses incurred for the issue of Equity shares, in line with Section 52 of the Companies Act 2013).

20.2.2 Employee Stock Options Reserve

The amount represents reserve created to the extent of granted options based on the Employees Stock
Option Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life
of the vesting period as employee compensation costs reflecting period of receipt of service. Also refer
note 41.

20.2.3 Statutory Reserve under Section 29C of National Housing Bank (NHB) Act, 1987

As per Section 29C(1) of the National Housing Bank Act, 1987, the Company is required to transfer at least
20% of its net profit after tax every year to a reserve before any dividend is declared. For this purpose,
any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961, is
considered to be an eligible transfer. During the year ended March 31, 2025, the company has transferred
Rs. 9,970.64 lakhs (March 31, 2024 - Rs. 7,505.05 lakhs ) in terms of section 36(1)(viii) to the Special Reserve.

The Company has transferred an amount of Rs. 1,537.77 lakhs during the year ended March 31, 2025
(March 31, 2024 - Rs. 2,108.60 lakhs ) to Statutory Reserve u/s 29C of the National Housing Bank Act, 1987.
Total amount clearly earmarked for the purposes of Statutory Reserve u/s 29C is Rs. 50,893.92 lakhs
(March 31, 2024 - Rs. 39,385.51 lakhs ) out of which Rs. 9,305.55 lakhs (March 31, 2024 - Rs. 7,767.78 lakhs)
is distinctly identifiable above and the balance of Rs. 41,588.57 lakhs (March 31, 2024 - Rs. 31,617.73 lakhs )
is included in the Special Reserve created u/s 36(1)(viii) of the Income-tax Act, 1961.

The Company has resolved not to make withdrawals from the Special reserve created under Section
36(1)(viii) of the Income-tax Act, 1961.

20.2.4 Impairment Reserve

IntermsoftherequirementasperRBInotificationno.RBI/2020-21/100DOR.FIN.HFC.CC.No.120/03.10.136/2020-21
dated 17 February 2021, Housing Finance Companies (HFCs) are required to create an impairment reserve
for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification
and Provisioning (IRACP) norms (including provision on standard assets). The overall impairment
provision made under Ind AS is higher than the prudential floor (including the provision requirement
specified in the notification referred to in Note 6) prescribed by RBI.

20.2.5 Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfer to statutory
reserves, general reserves and dividend distributed to shareholders.

The Board of Directors had declared two interim dividend of Rs. 2.5 & Rs. 2 each per share respectively
for equity share of face value of Rs. 2 at their meetings held on 03rd May 2024, 05th Nov 2024 and paid
subsequently on 23rd May 2024, 22nd Nov 2024 respectively.

28.1 Contingent liabilities as per Ind AS 37 and commitments

i) Matters wherein management has concluded the Company''s liability to be probable have
accordingly been provided for in the books. Also refer note 17.

ii) Matters wherein management has concluded the Company''s liability to be possible have accordingly
been disclosed under Note 28.2 Contingent liabilities below.

iii) Matters wherein management is confident of succeeding in these litigations and have concluded
the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and
as advised by legal counsel which involves various legal proceedings and claims, in different stages
of process.

30 Sharing of Costs

The Company and its subsidiary share certain costs / service charges. These costs have been recovered
by the Company from its subsidiary on a basis mutually agreed by both the entities, which has been
relied upon by the Auditors.

Disclosures under Accounting Standards

31 Employee benefit plans

31.1 Defined contribution plans

The Company makes Provident Fund contributions for qualifying employees to the Regional Provident
Fund Commissioner. Under the Scheme, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognized Rs. 760.21 lakhs (March 31, 2024 -
Rs. 664.95 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions
payable to the scheme by the Company are at rates specified in the rules of the scheme.

31.2 Defined benefit plans

The Company provides for gratuity, a defined benefit plan (the "gratuity plan") covering eligible
employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum
payment to vested employees at retirement or termination of employment based on the respective
employee''s last drawn salary and years of employment with the Company. The Company does not have
a funded gratuity scheme for its employees.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate
risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best
estimate of the mortality of plan participants both during and after their employment. An increase in the
life expectancy of the plan participants will increase the plan''s liability.

Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference
to the future salaries of plan participants. As such, an increase in the salary of the plan participants will
increase the plan''s liability.

Gratuity provision has been made based on the actuarial valuation done as at the year end using the
Projected Unit Credit method. The details of actuarial valuation as provided by the Independent Actuary
is as follows:

31.4 The date on which the Code on Social Security, 2020 (the "Code") relating to employee benefits shall become
effective is yet to be notified and the related rules are yet to be finalized. The Company will evaluate the
code and its rules, assess the impact, if any, and account for the same when they become effective.

32 Segment Reporting:

The Executive Chairman of the Company takes decision in respect of allocation of resources and assesses
the performance basis the report/ information provided by functional heads and are thus considered to
be Chief Operating Decision Maker (""CODM"").

The Company operates under the principal business segment viz. ""providing long term housing finance,
loans against property and refinance loans"". CODM views and monitors the operating results of its single
business segment for the purpose of making decisions about resource allocation and performance
assessment. Accordingly, there are no separate reportable segments in accordance with the requirements
of Ind AS 108 ''Operating segment'' and hence, there are no additional disclosures to be provided other
than those already provided in the consolidated financial statements. The Company''s operations are
predominantly confined in India.

33 Earnings and Expenditure in foreign currency - Rs. Nil (March 31, 2024: Rs. Nil)

Note:

* As the future liabilities of gratuity and leave encashment are provided on actuarial basis for the Company as
a whole, the amounts pertaining to key managerial personnel is not separately ascertainable and therefore not
included above.

# Includes Investment in subsidiary arising out of financial guarantee obligations.

35 Financial Instruments

35.1 Capital management

The Company actively manages its capital to meet regulatory norms and current and future business
needs, considering the risks in its businesses, expectations of rating agencies, shareholders and investors,
and the available options of raising capital. Its capital management framework is administered by the
risk committee of Company. During the current year, there has been no change in objectives, policies or
processes for managing capital.

The Company is subject to the capital adequacy requirements of the National Housing Bank (''NHB'') /
Reserve Bank of India (''RBI''). As per the Master Direction - Non-Banking Financial Company - Housing
Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021, the Company is required to
maintain a minimum ratio of total capital to risk adjusted assets as determined by a specified formula,
at least half of which must be Tier 1 capital, which is generally shareholders'' equity.

The Company has complied with all regulatory requirements related to regulatory capital and capital
adequacy ratios as prescribed by NHB / RBI.

The company sets the amount of capital in proportion to its overall financing structure, i.e. equity and
financial liabilities.

Below is the Capital Risk Adequacy Ratio maintained and calculated as per NHB/RBI guidelines in the
respective year by the Company and as per regulatory return filed with NHB in the respective years.

35.1.1 The Company''s capital management strategy is to effectively determine, raise and deploy capital to
cover risk inherent in business and meeting the capital adequacy requirements of the Reserve Bank
of India (RBI). The same is done through a combination of equity and/ or short term/ long term debt
as may be appropriate. The Company determines the amount of capital required on the basis of
operations and capital expenditure. The adequacy of the Company''s capital is monitored using, among
other measures, the regulations issued by the RBI. The capital structure is monitored on the basis of net
debt to equity and maturity profile of overall debt portfolio. The Company''s policy is in line with Master
Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions,
2021 which currently permits HFCs to borrow up to 12 times of their net owned funds ("NOF")

35.3 Fair Value Measurements
Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost
and for which fair value disclosure are required in the financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, the Company has classified its financial
instruments into the three levels prescribed under the accounting standard.

(b) Fair value of financial instruments not measured at fair value

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above
financial instruments which are not recorded and measured at fair value in the Company''s financial
statements. These fair values were calculated for disclosure purposes only. The below methodologies
and assumptions relate only to the instruments in the above tables and, as such, may differ from
the techniques and assumptions.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve
months), the carrying amounts, which are net of impairment, are a reasonable approximation of
their fair value. Such instruments include: cash and cash equivalents, bank balances other than
cash and cash equivalents, other financial assets, trade payables and other financial liabilities
without a specific maturity. Such amounts have been classified as Level 3 except for cash and cash
equivalents and bank balances other than cash and cash equivalents which have been classified
as Level 1.

Loans

The fair values of loans and receivables are estimated by discounted cash flow models that
incorporate assumptions for credit risks, probability of default and loss given default estimates.
Where such information is not available, the Company uses historical experience and other
information used in its collective impairment models.

Fair values of lending portfolios are calculated using a portfolio-based approach. The Company
then calculates and extrapolates the fair value to the entire portfolio, using discounted cash flow
models that incorporate interest rate estimates considering all significant characteristics of the
loans. The credit risk is applied as a top-side adjustment based on the collective impairment model
incorporating probability of defaults and loss given defaults
Debt securities & Borrowings (other than debt securities)

The fair values of Debt Securities and Borrowings (other than Debt securities) are estimated by
discounted cash flow models that incorporate interest cost estimates considering all significant
characteristics of the borrowing. They are classified as Level 3 fair values in the fair value hierarchy
due to the use of unobservable inputs.

Set out below is a comparison, by class, of the carrying amounts and fair values of the Company''s
financial instruments that are not carried at fair value in the financial statements. This table does
not include the fair values of non-financial assets and non-financial liabilities.

35.4 Market risk management

Market Risk is the risk of loss in on-balance sheet and off-balance sheet positions arising from movements
in market place, in particular, changes in interest rates, exchange rates and equity. In line with the
regulatory requirements, the Company has in place a Board approved Market Risk Management and
Asset Liability Management ("ALM") policy in place. The Policy provides the framework for assessing
market risk, in particular, tracking of events happening in market place, changes in policies / guidelines
of government and regulators, exchange rate movement, equity market movements, money market
movements etc.

35.5 Interest rate risk management

Interest rate risk is managed through ALM policy framed by the Company. The ALM policy is administered
through the ALCO (Asset Liability Management Committee) which monitors the following on a monthly
basis:

- Borrowing cost of the Company as on a particular date

- Interest rate scenario existing in the market

- Gap in cash flows at the prevalent interest rates

- Effect of Interest rate changes on the Gap in the cash flows

- Fixing appropriate interest rate to be charged to the customer based on the above factors

35.6 Credit risk

Credit risk in the Company arises due to
default by customers on their contractual
obligations which results to financial
losses. Credit Risk is a major risk in the
Company and the Company''s asset base
comprises loans for affordable housing and
loans against property. Credit Risk in the
Company stems from outright default due
to inability or unwillingness of a customer to
meet commitments in relation to lending,
settlement and other financial transactions.
The essence of credit risk assessment in the
Company pivots around the early assessment
of stress, either in a portfolio or an account,
and taking appropriate measures.

35.6.1 Credit risk management

Credit risk in the Company is managed
through a framework that sets out policies
and procedures covering the measurement
and management of credit risk. There is
a clear segregation of duties between
transaction originators in the business
function and approvers in the credit risk
function. Board approved credit policies
and procedures mitigate the Company''s
prime risk which is the default risk. There is
a Credit Risk Management Committee in

the Company for the review of the policies,
process and products on an ongoing basis,
with approval secured from the Board as
and when required. There is a robust Credit
Risk Management set-up in the Company at
various levels.

1. There are Credit teams to ensure
implementation of various policies and
processes through random customer
visits and assessment, training of branch
staff on application errors, liaison with
other institutions to obtain necessary
information/loan closure documents,
as the case may be, and highlight
early warning signals and industry
developments enabling pro-active field
risk management.

2. The credit sanction is done through
a delegation matrix where credit
sanctioning powers are defined for
respective levels.

3. Portfolio analysis and reporting is used to
identify and manage credit quality and
concentration risks.

4. Credit risk monitoring for the Company is
broadly done at two levels: account level
and portfolio level. Account monitoring
aims to identify weak accounts at an
incipient stage to facilitate corrective

action. Portfolio monitoring aims towards
managing risk concentration in the
portfolio as well as identifying stress in
certain occupations, markets and states.

35.6.2 Significant increase in credit risk

The Company monitors all financial assets
that are subject to impairment requirements
to assess whether there has been a significant
increase in credit risk since initial recognition.
If there has been a significant increase
in credit risk, the Company measures the
loss allowance based on lifetime rather
than Stage 1 (12-month) Expected Credit
Loss (ECL). Pending the adoption of scoring
models to assess the change in credit status
at an account level and at portfolio level,
the Company has adopted SICR (Significant
Increase in Credit risk) criteria based on Days
Past Due (DPD). The following table lists the
staging criteria used in the Company: Staging
Criterion

Stage-1: 0 up to 30 days past due
Stage-2: 31 up to 90 days past due
Stage-3: 90 and above days past due

Stage 2 follows the rebuttable presumption
stated in Ind AS 109, that credit risk has
increased significantly since initial recognition
no later than when contractual payments are
more than 30 days past due.

The Company also considers other qualitative
factors and repayment history and considers
guidance issued by the Institute of Chartered
accountants of India (ICAI) for staging of
advances to which moratorium benefit has
been extended under the COVID regulatory
package issued by RBI and as approved by
the Board.

35.6.3 Measurement of ECL

The key inputs used for measuring ECL on
term loans issued by the Company are:

Probability of default (PD): The PD is an
estimate of the likelihood of default over a
given time horizon (12 Month). It is estimated
as at a point in time. To compute Expected
Credit Loss (ECL) the portfolio is segregated
into 3 stages viz. Stage 1, Stage 2 and Stage 3
on the basis of Days Past Dues. The Company
uses 12 month PD for the stage 1 borrowers
and lifetime PD for stage 2 and 3 to compute
the ECL.

Loss given default (LGD): LGD is an estimation

of the loss arising on default. It is based on
the difference between the contractual cash
flows due and those that the lender would
expect to receive, taking into account cash
flows from eligible collateral.

Exposure at default (EAD): EAD is an estimate
of the exposure at a future default date,
taking into account expected changes in the
exposure after the reporting date including
expected drawdowns on committed facilities.

Probability of Default

To arrive at Probability of Default, ''Vintage
Analysis'' was done considering monthly
defaults of borrower since origination.

The analysis considered Monthly Default
Rates starting from inception until the end
of observation period i.e. December 2024
to calculate default rates for each vintage
month. Cumulative PD was calculated from
the marginal PDs for each vintage month.
Simple Average and Weighted Average
PD was computed for each Month on Book
(MOB) period starting from MOB 0 until MOB
"n" (end of observation period). The Company
has used Simple average to eliminate the
bias that can be possible due to weighted
average effect.

Loss Given Default

LGD was calculated using First time NPA (FTN)
date and recovery data for each of these FTN
dates. FTN date was taken from inception until
the latest period. For each pool, recovery data
was mapped to the subsequent months until
current period from the respective default
month i.e. recovery data was retrieved and
plotted against the flow of month i.e. Months
on Book MOB 0, MOB 1, MOB 2, MOB 3 till MOB
(n) against each default month. Considering
time value of money, recoveries in each
month was discounted to arrive at the
value as of FTN date. Average Interest Rates
charged for each disbursement year was
used as the Effective Interest Rates (EIR) for
the loans.

Marginal Recovery rates was computed for
each month as Discounted Recovery amount
for a given month divided by the total
outstanding amount for the given FTN date.
Cumulative recovery rates were computed
for each FTN date and LGD for corresponding
FTN date was computed by using the formula
(1- Recovery Rate). Weighted average LGD

was computed for the entire observation period, weights being the total outstanding amount for each
FTN date.

Exposure at Default :

EAD is the total outstanding balance at the reporting date including principal and accrued interests at
the reporting date. EAD calculation for all portfolios is as under:

Stage 1 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 2 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 3 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Credit Conversion Factor (CCF) for undrawn portion has been taken at 100% based on historical
experience and other information available with the Company.

The Company measures ECL as the product of PD, LGD and EAD estimates for its Ind AS 109 specified
financial obligations.

Credit Risk Concentrations

In order to manage concentration risk, the Company, considering the regulatory limits, focuses on
maintaining a diversified portfolio across housing loans and loans against property. An analysis of the
Company''s credit risk concentrations is provided in the following tables which represent gross carrying
amounts of each class.

35.6.6 Offsetting financial assets and financial liabilities

The Company has not recognised any financial asset or liability on a net basis.

35.6.7 Financial Guarantee

The Company has issued Corporate Guarantees of Rs. 45,906.49 lakhs (March 31, 2024 -Rs. 63,130.60
lakhs) to Banks and external lenders on behalf of the subsidiary - Aptus Finance India Private Limited.
Based on the financial performance of the subsidiary, the Company does not expect the guarantee
liability to devolve on the Company.

35.7 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to its reputation.

Exposure to liquidity risk

The Company manages and measures liquidity risk as per its ALM policy and the ALCO (Asset Liability
Management Committee of the Company) is responsible for managing the liquidity risk. The Company
not only measures its current liquidity position on an ongoing basis but also forecasts how liquidity
position may emerge under different assumptions. The liquidity position is tracked through maturity or
cash flow mismatches across buckets spanning all maturities.

35.8Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system
or from external events. Operational risk is associated with human error, system failures and inadequate
procedures and controls. It is the risk of loss arising from the potential that inadequate information system;
technology failures, breaches in internal controls, fraud, unforeseen catastrophes, or other operational
problems may result in unexpected losses or reputation problems. Operational risk exists in all products
and business activities.

The Company recognizes that operational risk event types that have the potential to result in substantial
losses includes Internal fraud, External fraud, employment practices and workplace safety, clients, products
and business practices, business disruption and system failures, damage to physical assets, and finally
execution, delivery and process management.

The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks
through a control framework and by monitoring and responding to potential risks. Controls include effective
segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment
processes, such as the use of internal audit.

35.9Divergence in Asset Classication and Provisioning

There is no Divergence in Asset Classisification and Provisioning during current and previous financial year.
36 Earnings per share

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by
the weighted average number of Equity shares outstanding during the year after considering the share
split.

Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company (after adjusting
for interest on the convertible preference shares, if any) 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 after considering the share split
mentioned.

42 Disclosure pursuant to RBI notification no. RBl/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21
dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13,
2020 on Implementation of Indian Accounting Standards

RBI has issued Notification no. RBl/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October
22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 in respect of
recognition of impairment on financial instruments starting from financial year 2020-21 for Housing Finance
Companies. The Company has complied with the requirements of Ind AS and the guidelines and policies
approved by the Board in this regard.

Any shortfall in ECL provision compared to the requirements as per IRAC norms are apportioned by the
Company to Impairment Reserve at reporting periods. Such balance can be utilised / withdrawn by the
Company only with prior permission of the Reserve Bank of India as per the said Circular. The shortfall in
ECL provision compared to IRACP requirement as at March 31, 2025 is Rs. Nil (As at March 31, 2024 Rs. Nil). The
balance in the impairment reserve as at March 31, 2025 is Rs. 610.36 lakhs (As at March 31, 2024 Rs. 610.36
lakhs) (Refer Note 20.1 and Note 20.2.4).

46 Disclosure as required by National Housing Bank

The following disclosures have been given in terms of National Housing Bank''s notification no. NHB.
HFC.CG-DIR.1/MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-
No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory
purpose, have been made so as to comply with NHB''s Policy Circular No. NHB(ND)/DRS/Policy Circular
No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the
extant provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions
2010 including framework on prudential norms and other related circulars issued in this regards by
NHB from time to time and the same have been compiled by the Management in accordance with
Accounting Standards prescribed under section 133 of the Companies Act, read with the Companies
(Accounting Standards) Rules, 2006, as amended (Indian GAAP) and relied upon by the auditors.

(f) Institutional set-up for liquidity risk management

The Board of Directors of the Company have adopted a Risk Management Policy. The Board adopted policy
contains the framework and guidelines for Risk management. The changes brought in the Liquidity Risk
Management Framework vide its Circular No. RBI/2019-20/88 DOR.NBFC (pd) CC. No.102/03.10.001/2019-20
November 04, 2019 are also being covered as part of the Risk Management Policy which will be reviewed
by the Board periodically for compliance and implementation.

The Board shall have the overall responsibility for management of liquidity risk by reviewing the
implementation of the Risk Management Policy. The Company has also constituted Risk Management
Committee and Asset-Liability Management Committee (ALCO) to carry out the functions as listed out
in the said circular.

46.32 The Company has adopted all the norms issued under ''Prudential norms on Income recognition, Asset
classification, and provisioning pertaining to advances - clarifications'' issued by the Reserve Bank of
India (RBI) vide circular no.DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021. Such alignment
has resulted in the transition of sub 90 DPD assets as additional non-performing assets as of March 31,
2025, and provided as per norms.

46.33 The listed Non-Convertible Debentures of the Company secured by way of specific charge on assets
under hypothecation and specified immovable property. The total asset cover is more than one hundred
percent of the principal amount of the said debentures.

46.34 Disclosure pursuant to RBI notification dated September 24, 2021 on "Transfer of Loan Exposures" are
given below:

(a) Details of transfer through assignment in respect of loans not in default during the quarter and year
ended March 31, 2025.

(b) The Company has not acquired, any loans
not in default during the quarter ended &
year ended March 31, 2025.

(c) The Company has not transferred or
acquired, any stressed loans during the
quarter ended & year ended March 31,
2025.

46.35 Remuneration of Directors - Pecuniary
relationship of Non-executive Directors.
Remuneration paid to Directors is reflected in
Note no.34 "Related Party Transactions". There
is no pecuniary relationship or transactions of
Non-Executive Directors with the Compnay or
its Directors., Senior Management or Group
Companies

46.36 Disclosure pursuant to Reserve Bank
of India Circular No.DOR.FIN.HFC.
CC.No.120/03.10.136/2020-21 dated February 17,
2021 and DOR.NBFC (PD) CC. No.102/03.10.001
/2019-20 dated November 4, 2019 pertaining
to Liquidity Risk Management Framework for
Non-Banking Financial Companies.

As per the Guidelines on Liquidity Risk
Management Framework for NBFCs issued by
RBI vide notification no. RBl/2019-20/88 DOR.
NBFC (PD) CC. No.102/03.10.001/2019-20, HFCs
are required to maintain Liquidity Coverage
Ratio (LCR) from December 1, 2020. Under the
said guidelines, all non-deposit taking HFCs
with asset size of INR 5,000 crore and above
but less than INR 10,000 crore are required to
maintains a minimum LCR of 60%.

The Company has implemented the

guidelines on Liquidity Risk Management
Framework prescribed by the Reserve Bank
of India requiring maintenance of Liquidity
Coverage Ratio (LCR), which aim to ensure
that a HFC maintains an adequate level of
unencumbered High Quality Liquid Assets
(HQLA) that can be converted into cash to
meet its liquidity needs for a 30 calendar
day time horizon under a significantly severe
liquidity stress scenario. Compliance with LCR
is monitored by Asset Liability Management
Committee (ALCO) of the Company.
Qualitative Information:

Main drivers to the LCR numbers :

All significant outflows and inflows determined
in accordance with RBI guidelines are
included in the prescribed LCR computation.

Composition of HQLA:

The HQLA maintained by the Company
comprises cash balance maintained in
current account and callable fixed deposits
with Scheduled Commercial Banks.
Concentration of funding sources:

The Company maintains diversified sources of
funding comprising term loans, Securitisation
loans and NCDs. The funding pattern is
reviewed regularly by the management.
Other inflows and outflows in the LCR
calculation that are not captured in the LCR
common template but which the institution
considers to be relevant for its liquidity profile
Ni

47 Registration obtained from other financial sector
regulators

The Company is registered with RBI and has all
its operations in India. The Company is acting
as a corporate agent and is registered with the
Insurance Regulatory and Development Authority
of India (IRDAl) vide registration number CA 1013

48 The Company has not advanced or loaned or
invested (either from borrowed funds or share
premium or any other sources or other kind
of funds) to or in any other person or entity,
including foreign entity ("intermediaries"), with
the understanding, whether recorded in writing or
otherwise, that the intermediary shall, directly or
indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on
behalf of the Company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;

The Company has not received any funds (which
are material either individually or in the aggregate)
from any person or entity, including foreign entity
("Funding Parties"), with the understanding,
whether recorded in writing or otherwise, that
the Company shall, directly or indirectly lend or
invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding
Parties ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;

49 Breach of covenant of loan availed or debt
securities issued - Nil

50 The disclosure on the following matters required
under Schedule III as amended are not made, as
the same are not applicable or relevant for the
Company.

a) The Company has not traded or invested in
crypto currency or virtual currency during the
financial year.

b) No proceedings have been initiated or are
pending against the Company for holding

any benami property under the Benami
Transactions (Prohibition) Act 1988 (45 of 1988)
and rules made thereunder.

c) The Company has not been declared willful
defaulter by any bank or financial institution
or Government or any other Government
authority.

d) The Company has not entered into any
scheme of arrangement.

e) No satisfaction of charges are pending to be
filed with the ROC.

f) There are no transactions which are not
recorded in the books of account which have
been surrendered or disclosed as income
during the year in the tax assessments under
the Income-tax Act, 1961.

g) The Company has no transactions with
Companies struck off under section 248 of
the Companies Act, 2013 or section 560 of the
Companies Act, 1956.

h) The Company does not possess any
immovable property (other than properties
where the Company is the lessee and the
lease agreements are duly executed in favour
of the lessee) whose title deeds are not held in
the name of the company during the financial
year ended March 31, 2025 and March 31, 2024.

i) The Group has complied with the number of
layers prescribed under clause (87) of section
2 of the Act read with Companies (Restriction
on number of Layers) Rules, 2017 for the
financial years ended March 31, 2025 and
March 31, 2024.

51. Previous year''s figures have been regrouped /

reclassified wherever necessary to correspond

with the current year classification / presentation.

As per our report of even date

For Sundaram & Srinivasan For and on behalf of the Board of Directors of

Chartered Accountants Aptus Value Housing Finance India Limited

Firm''s Registration No. 004207S (CIN : L65922TN2009PLC073881)

S Usha M Anandan P Balaji

Partner Executive Chairman Managing Director

Membership No: 211785 DIN: 00033633 DIN: 07904681

John Vijayan Rayappa Sanin Panicker

Chief Financial Officer Company Secretary

Membership No: A32834

Place : Chennai Place : Chennai

Date : May 06, 2025 Date : May 06, 2025

---

Mar 31, 2024

2.8 Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability). When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received, and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

2.9 Assets held for Sale

Assets acquired by the Company under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has been classified as assets held for sale, as their carrying amounts will be recovered principally through a sale of asset. This assets are recognised on obtaining physical possession of the assets which are in the nature of residential properties. In accordance with Ind AS 105, the assets held for sale are measured at the lower of their carrying amount and the fair value less costs to sell.

2.10 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

2.10.1 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are shortterm balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.11 Earnings per share ("EPS")

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.

2.12 Segment Reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the ''management approach'' as defined in Ind AS 108, the Chief Operating Decision Maker ("CODM") evaluates the Company''s performance based on an analysis of various performance indicators by business segments and geographic segments.

As per the requirements of Ind AS 108 ''Operating Segments'', based on evaluation of financial information for allocation of resources and assessing performance, the Company has identified a single segment, viz. "providing long term housing finance, loans against property and refinance loans". Accordingly, there are no

2.13 Determination of Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

? In the principal market for the asset or liability, or

? In the absence of a principal market, in the most advantageous market for the asset or

liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

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

In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below:

? Level 1 financial instruments -Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.

? Level 2 financial instruments-Those

where the inputs that are used for valuation and are significant, are derived from directly

risk. These estimates are driven by a number of factors, changes in which can result in different levels of allowances.

The Company''s ECL calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting estimates include:

? The Company''s criteria for assessing if there has been a significant increase in credit risk and so allowances for financial assets should be measured on a LTECL basis and the qualitative assessment

? The segmentation of financial assets when their ECL is assessed on a collective basis

? Development of ECL models, including the various formulas and the choice of inputs

? Determination of temporary adjustments as qualitative adjustment or overlays based on broad range of forward looking information as economic inputs

or indirectly observable market data available over the entire period of the instrument''s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

? Level 3 financial instruments -Those that include one or more unobservable input that is significant to the measurement as whole.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company evaluates the levelling at each reporting period on an instrument-byinstrument basis and reclassifies instruments when necessary based on the facts at the end of the reporting period.

3A Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future period

In the process of applying the Company''s accounting policies, management has made the following judgements/estimates, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

3A 1. De-recognition of Financial instruments

The Company enters into securitisation transactions where financial assets are transferred to a structured entity for a consideration. The financial assets transferred qualify for derecognition only when substantial risk and rewards are transferred.

This assessment includes judgements reflecting all relevant evidence including the past performance of the assets transferred and credit risk that the Company has been exposed to. Based on this assessment, the Company believes that the credit enhancement provided pursuant to the transfer of financial assets under securitisation are higher than the loss incurred on the similar portfolios of the Company hence it has been concluded that securitisation transactions entered by the Company does not qualify for de-recognition since substantial risk and rewards of the ownership has not been transferred. The transactions are treated as financing arrangements and the sale consideration received is treated as borrowings.

3A 2. Fair value of financial instruments

The fair value of financial instruments 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 another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), funding value adjustments, correlation and volatility. For further details about determination of fair value please see Fair value note in Accounting policy

3A 3. Impairment of financial asset

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit

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

3A 4. Provisions and other contingent liabilities

When the Company can reliably measure the outflow of economic benefits in relation to a specific case and considers such outflows to be probable, the Company records a provision against the case. Where the probability of outflow is considered to be remote, or probable, but a reliable estimate cannot be made, a contingent liability is disclosed.

Given the subjectivity and uncertainty of determining the probability and amount of losses, the Company takes into account a number of factors including legal advice, the stage of the matter and historical evidence from similar incidents. Significant judgement is required to conclude on these estimates.

20.2 Nature and purpose of reserves:

20.2.1 Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013. During the year ended March 31, 2024, Securities premium was utilised to the extent of Rs. Nil (March 31, 2023 - Nil)

20.2.2 Employee Stock Options Reserve

The amount represents reserve created to the extent of granted options based on the Employees Stock Option Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service. Also refer note 41.

20.2.3 Statutory Reserve under Section 29C of National Housing Bank (NHB) Act, 1987

As per Section 29C(1) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit after tax every year to a reserve before any dividend is declared. For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961, is considered to be an eligible transfer. During the year ended March 31, 2024, the company has transferred Rs. 7,505.05 lakhs (March 31, 2023 - Rs. 5,815.40 lakhs ) in terms of section 36(1)(viii) to the Special Reserve.

The Company has transferred an amount of Rs. 2,108.60 lakhs during the year ended March 31, 2024 (March 31, 2023 - Rs. 2,673.96 lakhs ) to Statutory Reserve u/s 29C of the National Housing Bank Act, 1987. Total amount clearly earmarked for the purposes of Statutory Reserve u/s 29C is Rs. 39,385.51 lakhs (March 31, 2023 - Rs. 29,771.86

lakhs ) out of which Rs. 7,767.78 lakhs (March 31,2023 - Rs. 5,659.18 lakhs) is distinctly identifiable above and the balance of Rs. 31,617.73 lakhs (March 31,2023 - Rs. 24,112.68 lakhs ) is included in the Special Reserve created u/s 36(1)(viii) of the Income-tax Act, 1961.

The Company has resolved not to make withdrawals from the Special reserve created under Section 36(1)(viii) of the Income-tax Act, 1961.

20.2.4 Impairment Reserve

In terms of the requirement as per RBI notification no. RBI/2020-21/100 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated 17 February 2021, Housing Finance Companies (HFCs) are required to create an impairment reserve for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification and Provisioning (IRACP) norms (including provision on standard assets). The overall impairment provision made under Ind AS is higher than the prudential floor (including the provision requirement specified in the notification referred to in Note 6) prescribed by RBI.

20.2.5 Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfer to statutory reserves, general reserves and dividend distributed to shareholders.

The Board of Directors had declared two interim dividend of Rs. 2 each per share respectively for equity share of face value of Rs. 2 at their meetings held on May 03, 2023, Feb 01, 2024 and paid subsequently on May 19, 2023 and Feb 16, 2024 respectively.

28.1 Contingent liabilities as per Ind AS 37 and commitments

i) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also refer note 17.

ii) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 28.2 Contingent liabilities below.

iii) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.

30 Sharing of Costs

The Company and its subsidiary share certain costs / service charges. These costs have been recovered by the Company from its subsidiary on a basis mutually agreed by both the entities, which has been relied upon by the Auditors.

Disclosures under Accounting Standards

31 Employee benefit plans

31.1 Defined contribution plans

The Company makes Provident Fund contributions for qualifying employees to the Regional Provident Fund Commissioner. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 664.95 lakhs (March 31, 2023 - Rs. 558.09 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to the scheme by the Company are at rates specified in the rules of the scheme.

31.2 Defined benefit plans

The Company provides for gratuity, a defined benefit plan (the "gratuity plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee''s last drawn salary and years of employment with the Company. The Company does not have a funded gratuity scheme for its employees.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Gratuity provision has been made based on the actuarial valuation done as at the year end using the Projected Unit Credit method. The details of actuarial valuation as provided by the Independent Actuary is as follows:

The Company actively manages its capital to meet regulatory norms and current and future business needs, considering the risks in its businesses, expectations of rating agencies, shareholders and investors, and the available options of raising capital. Its capital management framework is administered by the risk committee of Company. During the current year, there has been no change in objectives, policies or processes for managing capital.

The Company is subject to the capital adequacy requirements of the National Housing Bank (''NHB'') / Reserve Bank of India (''RBI''). As per the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021, the Company is required to maintain a minimum ratio of total capital to risk adjusted assets as determined by a specified formula, at least half of which must be Tier 1 capital, which is generally shareholders'' equity.

The Company has complied with all regulatory requirements related to regulatory capital and capital adequacy ratios as prescribed by NHB / RBI.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities.

Below is the Capital Risk Adequacy Ratio maintained and calculated as per NHB/RBI guidelines in the respective year by the Company and as per regulatory return filed with NHB in the respective years.

(b) Fair value of financial instruments not measured at fair value

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Company''s financial statements. These fair values were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments in the above tables and, as such, may differ from the techniques and assumptions.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 3 except for cash and cash equivalents and bank balances other than cash and cash equivalents which have been classified as Level 1.

Loans

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, probability of default and loss given default estimates. Where such information is not available, the Company uses historical experience and other information used in its collective impairment models. Fair values of lending portfolios are calculated using a portfolio-based approach. The Company then calculates and extrapolates the fair value to the entire portfolio, using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. The credit risk is applied as a top-side adjustment based on the collective impairment model incorporating probability of defaults and loss given defaults.

Debt securities & Borrowings (other than debt securities)

The fair values of Debt Securities and Borrowings (other than Debt securities) are estimated by discounted cash flow models that incorporate interest cost estimates considering all significant characteristics of the borrowing. They are classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

35.4 Market risk management

Market Risk is the risk of loss in on-balance sheet and off-balance sheet positions arising from movements in market place, in particular, changes in interest rates, exchange rates and equity. In line with the regulatory requirements, the Company has in place a Board approved Market Risk Management and Asset Liability Management ("ALM") policy in place. The Policy provides the framework for assessing market risk, in particular, tracking of events happening in market place, changes in policies / guidelines of government and regulators, exchange rate movement, equity market movements, money market movements etc.

35.5 Interest rate risk management

Interest rate risk is managed through ALM policy framed by the Company. The ALM policy is administered through the ALCO (Asset Liability Management Committee) which monitors the following on a monthly basis:

- Borrowing cost of the Company as on a particular date

- Interest rate scenario existing in the market

- Gap in cash flows at the prevalent interest rates

- Effect of Interest rate changes on the Gap in the cash flows

- Fixing appropriate interest rate to be charged to the customer based on the above factors Interest rate sensitivity analysis

The sensitivity analysis has been determined for borrowings where interest rates are variable, assuming the amount outstanding at the end of the reporting year was outstanding for the whole year. A 50 basis points increase or decrease in interest rates is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

Credit risk in the Company arises due to default by customers on their contractual obligations which results to financial losses. Credit Risk is a major risk in the Company and the Company''s asset base comprises loans for affordable housing and loans against property. Credit Risk in the Company stems from outright default due to inability or unwillingness of a customer to meet commitments in relation to lending, settlement and other financial transactions. The essence of credit risk assessment in the Company pivots around the early assessment of stress, either in a portfolio or an account, and taking appropriate measures.

35.6.1 Credit risk management

Credit risk in the Company is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. There is a clear segregation of duties between transaction originators in the business function and approvers in the credit risk function. Board approved credit policies and procedures mitigate the Company''s prime risk which is the default risk. There is a Credit Risk Management Committee in the Company for the review of the policies, process and products on an ongoing basis, with approval secured from the Board as and when required. There is a robust Credit Risk Management set-up in the Company at various levels.

1. There are Credit teams to ensure implementation of various policies and processes through random customer visits and assessment, training of branch staff on application errors, liaison with other institutions to obtain necessary information/

loan closure documents, as the case may be, and highlight early warning signals and industry developments enabling pro-active field risk management.

2. The credit sanction is done through a delegation matrix where credit sanctioning powers are defined for respective levels.

3. Portfolio analysis and reporting is used to identify and manage credit quality and concentration risks.

4. Credit risk monitoring for the Company is broadly done at two levels: account level and portfolio level. Account monitoring aims to identify weak accounts at an incipient stage to facilitate corrective action. Portfolio monitoring aims towards managing risk concentration in the portfolio as well as identifying stress in certain occupations, markets and states.

35.6.2 Significant increase in credit risk

The Company monitors all financial assets that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk, the Company measures the loss allowance based on lifetime rather than Stage 1 (12-month) Expected Credit Loss (ECL). Pending the adoption of scoring models to assess the change in credit status at an account level and at portfolio level, the Company has adopted SICR (Significant Increase in Credit risk) criteria based on Days Past Due (DPD). The following table lists the staging criteria used in the Company: Staging Criterion

Stage-1: 0 up to 30 days past due Stage-2: 31 up to 90 days past due Stage-3: Above 90 days past due

Stage 2 follows the rebuttable presumption stated in Ind AS 109, that credit risk has increased significantly since initial recognition no later than when contractual payments are more than 30 days past due.

The Company also considers other qualitative factors and repayment history and considers guidance issued by the Institute of Chartered Accountants of India (ICAI) for staging of advances to which moratorium benefit has been extended under the COVID regulatory package issued by RBI and as approved by the Board.

35.6.3 Measurement of ECL

The key inputs used for measuring ECL on term loans issued by the Company are:

Probability of default (PD): The PD is an estimate of the likelihood of default over a given time horizon (12 Month). It is estimated as at a point in time. To compute Expected Credit Loss (ECL) the portfolio is segregated into 3 stages viz. Stage 1, Stage 2 and Stage 3 on the basis of Days Past Dues. The Company uses 12 month PD for the stage 1 borrowers and lifetime PD for stage 2 and 3 to compute the ECL.

Loss given default (LGD): LGD is an estimation of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from eligible collateral.

Exposure at default (EAD): EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date including expected drawdowns on committed facilities.

Probability of Default

To arrive at Probability of Default, Vintage Analysis'' was done considering monthly defaults of borrower since origination.

The analysis considered Monthly Default Rates starting from inception until the end of observation period i.e. December 2023 to calculate default rates for each vintage month. Cumulative PD was calculated from the marginal PDs for each vintage month. Simple Average and Weighted Average PD was computed for each Month on Book (MOB) period starting from MOB 0 until MOB "n" (end of observation period). The Company has used Simple average to eliminate the bias that can be possible due to weighted average effect.

Loss Given Default

LGD was calculated using First time NPA (FTN) date and recovery data for each of these FTN dates. FTN date was taken from inception until the latest period. For each pool, recovery data was mapped to the subsequent months until current period from the respective default month i.e. recovery data was retrieved and plotted against the flow of month i.e. Months on Book MOB 0, MOB 1, MOB 2, MOB 3 till MOB (n) against each default month. Considering time value of money, recoveries in each month was discounted to arrive at the value as of FTN date. Average Interest Rates charged for each disbursement year was used as the Effective Interest Rates (EIR) for the loans.

Marginal Recovery rates was computed for each month as Discounted Recovery amount for a given month divided by the total outstanding amount for the given FTN date. Cumulative recovery rates were computed for each FTN date and LGD for corresponding FTN date was computed by using the formula (1- Recovery Rate). Weighted average LGD was computed for the entire observation period, weights being the total outstanding amount for each FTN date.

Exposure at Default :

EAD is the total outstanding balance at the reporting date including principal and accrued interests at the reporting date. EAD calculation for all portfolios is as under:

Stage 1 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Stage 2 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Stage 3 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Credit Conversion Factor (CCF) for undrawn portion has been taken at 100% based on historical experience and other information available with the Company.

The Company measures ECL as the product of PD , LGD and EAD estimates for its Ind AS 109 specified financial obligations.

Credit Risk Concentrations

In order to manage concentration risk, the

Company, considering the regulatory limits,

Immovable Property is the collateral for Housing and non-housing loans. Security Interest in favour of the Company is created by Mortgage through deposit of title deeds

The Company does not obtain any other form of credit enhancement other than the above. All the Company''s term loans are secured by way of tangible Collateral.

Any surplus remaining after settlement of outstanding debt by way of sale of collateral is returned to the customer / borrower.

35.6.6 Offsetting financial assets and financial liabilities

The Company has not recognised any financial asset or liability on a net basis.

35.6.7 Financial Guarantee

The Company has issued Corporate Guarantees of Rs. 63,130.60 lakhs (March 31,2023 - Rs. 24,319.61 lakhs) to Banks and external lenders on behalf of the subsidiary - Aptus Finance India Private Limited. Based on the financial performance of the subsidiary, the Company does not expect the guarantee liability to devolve on the Company.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation.

Exposure to liquidity risk

The Company manages and measures liquidity risk as per its ALM policy and the ALCO (Asset Liability Management Committee of the Company) is responsible for managing the liquidity risk. The Company not only measures its current liquidity position on an ongoing basis but also forecasts how liquidity position may emerge under different assumptions. The liquidity position is tracked through maturity or cash flow mismatches across buckets spanning all maturities.

35.8 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system or from external events. Operational risk is associated with human error, system failures and inadequate procedures and controls. It is the risk of loss arising from the potential that inadequate information system; technology failures, breaches in internal controls, fraud, unforeseen catastrophes, or other operational problems may result in unexpected losses or reputation problems. Operational risk exists in all products and business activities.

The Company recognizes that operational risk event types that have the potential to result in substantial losses includes Internal fraud, External fraud, employment practices and workplace safety, clients, products and business practices, business disruption and system failures, damage to physical assets, and finally execution, delivery and process management.

The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

35.9 Divergence in Asset Classification and Provisioning

There is no Divergence in Asset Classisification and Provisioning during current and previous financial year.

36 Earnings per share

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year after considering the share split.

Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares, if any) 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 after considering the share split mentioned.

41 Share-based payments

Employee share option plan

41.1 Details of the employee share option plan

(a) In the Board Meeting held on February 11, 2021, the Board approved the issue of up to 1,00,00,000 options under the Scheme titled "Aptus Employees Stock Option Scheme 2021" (hereinafter referred to as Aptus ESOS, 2021).

The Schemes allow the issue of options to employees of the Company. Each option comprises one underlying equity share.

As per the Scheme, the Nomination and Remuneration Committee ("The Committee") grants the options to the employees deemed eligible and also governs the operation of the scheme.

The difference between the fair price of the the options granted on the date of grant of option and the exercise price of the option representing Stock compensation expense is expensed over the vesting period.

42 Disclosure pursuant to RBI notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards

RBI has issued Notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 in respect of recognition of impairment on financial instruments starting from financial year 2020-21 for Housing Finance Companies. The Company has complied with the requirements of Ind AS and the guidelines and policies approved by the Board in this regard.

Any shortfall in ECL provision compared to the requirements as per IRAC norms are apportioned by the Company to Impairment Reserve at reporting periods. Such balance can be utilised / withdrawn by the Company only with prior permission of the Reserve Bank of India as per the said Circular. The shortfall in ECL provision compared to IRACP requirement as at March 31, 2024 is Rs. Nil (As at March 31,2023 Rs. Nil). The balance in the impairment reserve as at March 31, 2024 is Rs. 610.36 lakhs (As at March 31, 2023 Rs. 610.36 lakhs) (Refer Note 20.1 and Note 20.2.4).

45 Events after reporting period

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

46 Disclosure as required by National Housing Bank

The following disclosures have been given in terms of National Housing Bank''s notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory purpose, have been made so as to comply with NHB''s Policy Circular No. NHB(ND)/DRS/Policy Circular No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the extant provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions 2010 including framework on prudential norms and other related circulars issued in this regards by NHB from time to time and the same have been compiled by

46.34 Disclosure pursuant to RBI notification dated September 24, 2021 on "Transfer of Loan Exposures" are given below:

(a) The Company has not transferred or acquired, any loans not in default during the year ended March 31,2024 (March 31,2023 - Nil).

(b) The Company has not transferred or acquired, any stressed loans during the year ended March 31,2024 (March 31,2023 - Nil).

46.35 Remuneration of Directors - Pecuniary relationship of Non-executive Directors.

Remuneration paid to Directors is reflected in Note no.34 "Related Party Transactions". There is no pecuniary relationship or transactions of Non-Executive Directors with the Compnay or its Directors., Senior Management or Group Companies

46.36 Disclosure pursuant to Reserve Bank of India

Circular No.DOR.FIN.HFC.CC.No.120/03.10.136/ 2020-21 dated February 17, 2021 and DOR. NBFC (PD) CC. No.102/03.10.001 /2019-20

dated November 4, 2019 pertaining to Liquidity Risk Management Framework for Non-Banking Financial Companies.

As per the Guidelines on Liquidity Risk Management Framework for NBFCs issued by RBI vide notification no. RBI/2019-20/88 DOR. NBFC (PD) CC. No.102/03.10.001/2019-20, HFCs are required to maintain Liquidity Coverage Ratio (LCR) from December 1, 2020. Under the said guidelines, all non-deposit taking HFCs with asset size of INR 5,000 crore and above but less than INR 10,000 crore are required to maintains a minimum LCR of 60%.

The Company has implemented the guidelines on Liquidity Risk Management Framework prescribed by the Reserve Bank of India requiring maintenance of Liquidity Coverage Ratio (LCR), which aim to ensure that a HFC maintains an adequate level of unencumbered High Quality Liquid Assets (HQLA) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. Compliance with LCR is monitored by Asset Liability Management Committee (ALCO) of the Company.

Qualitative Information:

Main drivers to the LCR numbers :

All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR computation.

Composition of HQLA:

The HQLA maintained by the Company comprises cash balance maintained in current account and government securities.

Concentration of funding sources:

The Company maintains diversified sources of funding comprising term loans, Securitisation loans and NCDs. The funding pattern is reviewed regularly by the management.

Other inflows and outflows in the LCR calculation that are not captured in the LCR common template but which the institution considers to be relevant for its liquidity profile

Nil

46.32 The Company has adopted all the norms issued under ''Prudential norms on Income recognition, Asset classification, and provisioning pertaining to advances - clarifications'' issued by the Reserve Bank of India (RBI) vide circular no.DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021. Such alignment has resulted in the transition of sub 90 DPD assets as additional non-performing assets as of March 31,2024, and provided as per norms.

46.33 The listed Non-Convertible Debentures of the Company secured by way of specific charge on assets under hypothecation and specified immovable property. The total asset cover is more than one hundred percent of the principal amount of the said debentures.

48 The disclosure on the following matters required under Schedule III as amended are not made, as the same are not

applicable or relevant for the Company.

a) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

b) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or Government or any other Government authority.

d) The Company has not entered into any scheme of arrangement.

e) No satisfaction of charges are pending to be filed with the ROC.

f) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961.

g) The Company has no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

h) The Company does not possess any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company during the financial year ended March 31, 2024 and March 31,2023.

i) The Group has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31, 2024 and March 31, 2023

49 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year

classification / presentation.

As per our report of even date

For T R Chadha & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Aptus Value Housing Finance India Limited

ICAI Firm Regn No.006711N/N500028

Sheshu Samudrala M Anandan P Balaji

Partner Executive Chairman Managing Director

Membership No: 235031 DIN: 00033633 DIN: 07904681

John Vijayan Rayappa Sanin Panicker

Chief Financial Officer Company Secretary

Membership No: A32834

Place : Chennai Place : Chennai

Date : May 03, 2024 Date : May 03, 2024

---

Mar 31, 2023

(b) During the current year, the Company has allotted 11,12,156 equity shares to eligible employees under Employee Stock Option Scheme 2021 at exercise price of INR 140 per equity share.

(c) Terms/rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs.2 each. Each holder is entitled to one vote per equity share. Dividends proposed by the Board of Directors, if any is subject to the approval of the shareholders at the Annual General Meeting except in case of interim dividend.

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

20.2 Nature and purpose of reserves:20.2.1 Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013. During the year ended March 31, 2023, Securities premium was utilised to the extent of Rs. Nil (March 31,2022 -Rs. 1874.49 lakhs on account of expenses incurred for the issue of Equity shares, in line with Section 52 of the Companies Act 2013).

20.2.2 Employee Stock Options Reserve

The amount represents reserve created to the extent of granted options based on the Employees Stock Option Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs refecting period of receipt of service. Also refer note 41.

20.2.3 Statutory Reserve under Section 29C of National Housing Bank (NHB) Act, 1987

As per Section 29C(1) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit after tax every year to a reserve before any dividend is declared. For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961, is considered to be an eligible transfer. During the year ended March 31, 2023, the company has transferred Rs. 5,815.40 lakhs (March 31,2022 - Rs. 5,063.99 lakhs ) in terms of section 36(1)(viii) to the Special Reserve.

The Company has transferred an amount of Rs. 2,673.96 lakhs during the year ended March 31, 2023 (March 31, 2022 - Rs. 1,100.02 lakhs ) to Statutory Reserve u/s 29C of the National Housing Bank Act, 1987. Total amount clearly earmarked for the purposes of Statutory Reserve u/s 29C is Rs. 29,771.86 lakhs (March 31, 2022 - Rs. 21,282.50 lakhs ) out of which Rs. 5,659.18 lakhs (March 31, 2022 - Rs. 2,985.22 lakhs) is distinctly identifiable above and the balance of Rs. 24,112.68 lakhs (March 31,2022 - Rs. 18,297.28 lakhs ) is included in the Special Reserve created u/s 36(1)(viii) of the Income-tax Act, 1961.

The Company has resolved not to make withdrawals from the Special reserve created under Section 36(1)(viii) of the Income-tax Act, 1961.

20.2.4 Impairment Reserve

In terms of the requirement as per RBI notification no. RBI/2020-21/100 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated 17 February 2021, Housing Finance Companies (HFCs) are required to create an impairment reserve for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification and Provisioning (IRACP) norms (including provision on standard assets). The overall impairment provision made under Ind AS is higher than the prudential floor (including the provision requirement specified in the notification referred to in Note 6) prescribed by RBI.

20.2.5 Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfer to statutory reserves, general reserves and dividend distributed to shareholders.

The Board of Directors has declared an interim dividend of Rs. 2 per share for equity share of face value of Rs. 2 at their meeting held on 28th Nov 2022 and paid subsequently on 15th Dec 2022.

The income tax rate used for the above reconciliations are the corporate tax rate payable by the Company in India on taxable profits under the Income-tax Act, 1961.

The Company had elected to exercise the option of a lower tax rate provided under Section 115BAA of the Income tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated September 20, 2019. Accordingly, the Company has recognised provision for income tax for the year ended March 31, 2023 and March 31,2022 basis the rate provided in the said section.

28.1 Contingent liabilities as per Ind AS 37 and commitments

i) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also refer note 17.

ii) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 28.2 Contingent liabilities below.

iii) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.

28.2 Contingent Liabilities		Rs. in lakhs
Particulars	As at March 31, 2023	As at March 31, 2022
Corporate undertakings for securitisation of receivables for which the outflow would arise in the event of a shortfall, if any, in the cashflows of the pool of the securitised receivables. (Refer note below)
Note: The Company does not have any pending litigations which would impact its financial position. 28.3 Commitments
		Rs. in lakhs
Particulars	As at March 31, 2023	As at March 31, 2022
Loans sanctioned to Borrowers pending disbursement	11,053.58	13,997.00
	11,053.58	13,997.00

29A Micro, Small and Medium Enterprises

Based on the extent of information available with the Management, there are no transactions with Micro and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) during the year ended March 31, 2023 and March 31, 2022. This has been relied upon by the Auditors.

30 Sharing of Costs

The Company and its subsidiary share certain costs / service charges. These costs have been recovered by the Company from its subsidiary on a basis mutually agreed by both the entities, which has been relied upon by the Auditors.

Disclosures under Accounting Standards 31 Employee benefit plans31.1 Defined contribution plans

The Company makes Provident Fund contributions for qualifying employees to the Regional Provident Fund Commissioner. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 558.09 lakhs (March 31, 2022 - Rs. 469.04 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to the scheme by the Company are at rates specified in the rules of the scheme.

31.2 Defined benefit plans

The Company provides for gratuity, a defined benefit plan (the "gratuity plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee''s last drawn salary and years of employment with the Company. The Company does not have a funded gratuity scheme for its employees.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Gratuity provision has been made based on the actuarial valuation done as at the year end using the Projected Unit Credit method. The details of actuarial valuation as provided by the Independent Actuary is as follows:

1. The estimate of the future salary increase takes into account inflation, seniority, promotion and other relevant factors.

2. Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

3. Experience adjustments Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

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

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

31.4 The date on which the Code on Social Security, 2020 (the "Code'') relating to employee benefits shall become effective is yet to be notified and the related rules are yet to be finalized. The Company will evaluate the code and its rules, assess the impact, if any, and account for the same when they become effective.

32 Segment Reporting:

The Executive Chairman of the Company takes decision in respect of allocation of resources and assesses the performance basis the report/ information provided by functional heads and are thus considered to be Chief Operating Decision Maker ("CODM").

The Company operates under the principal business segment viz. "providing long term housing finance, loans against property and refinance loans". CODM views and monitors the operating results of its single business segment for the purpose of making decisions about resource allocation and performance assessment. Accordingly, there are no separate reportable segments in accordance with the requirements of Ind AS 108 ''Operating segment'' and hence, there are no additional disclosures to be provided other than those already provided in the consolidated financial statements. The Company''s operations are predominantly confined in India.

33 Earnings and Expenditure in foreign currency - Rs. Nil (March 31, 2022: Rs. Nil)

35.1 Capital management

The Company actively manages its capital to meet regulatory norms and current and future business needs, considering the risks in its businesses, expectations of rating agencies, shareholders and investors, and the available options of raising capital. Its capital management framework is administered by the risk committee of Company. During the current year, there has been no change in objectives, policies or processes for managing capital.

The Company is subject to the capital adequacy requirements of the National Housing Bank (''NHB'') / Reserve Bank of India (''RBI''). As per the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021, the Company is required to maintain a minimum ratio of total capital to risk adjusted assets as determined by a specified formula, at least half of which must be Tier 1 capital, which is generally shareholders'' equity.

The Company has complied with all regulatory requirements related to regulatory capital and capital adequacy ratios as prescribed by NHB / RBI.

The company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial

liabilities.

Below is the Capital Risk Adequacy Ratio maintained and calculated as per NHB/RBI guidelines in the respective year by the Company and as per regulatory return filed with NHB in the respective years.

35.3 Fair Value Measurements Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value disclosure are required in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

(b) Fair value of financial instruments not measured at fair value

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Company''s financial statements. These fair values were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments in the above tables and, as such, may differ from the techniques and assumptions.

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 3 except for cash and cash equivalents and bank balances other than cash and cash equivalents which have been classified as Level 1.

Loans

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, probability of default and loss given default estimates. Where such information is not available, the Company uses historical experience and other information used in its collective impairment models.

Fair values of lending portfolios are calculated using a portfolio-based approach. The Company then calculates and extrapolates the fair value to the entire portfolio, using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. The credit risk is applied as a top-side adjustment based on the collective impairment model incorporating probability of defaults and loss given defaults

Debt securities & Borrowings (other than debt securities)

The fair values of Debt Securities and Borrowings (other than Debt securities) are estimated by discounted cash flow models that incorporate interest cost estimates considering all significant characteristics of the borrowing. They are classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

Set out below is a comparison, by class, of the carrying amounts and fair values of the Company''s financial instruments that are not carried at fair value in the financial statements. This table does not include the fair values of non-financial assets and non-financial liabilities.

35.4 Market risk management

Market Risk is the risk of loss in on-balance sheet and off-balance sheet positions arising from movements in market place, in particular, changes in interest rates, exchange rates and equity. In line with the regulatory requirements, the Company has in place a Board approved Market Risk Management and Asset Liability Management ("ALM") policy in place. The Policy provides the framework for assessing market risk, in particular, tracking of events happening in market place, changes in policies / guidelines of government and regulators, exchange rate movement, equity market movements, money market movements etc.

35.5 Interest rate risk management

Interest rate risk is managed through ALM policy framed by the Company. The ALM policy is administered through the ALCO (Asset Liability Management Committee) which monitors the following on a monthly basis:

- Borrowing cost of the Company as on a particular date

- Interest rate scenario existing in the market

- Gap in cash flows at the prevalent interest rates

- Effect of Interest rate changes on the Gap in the cash flows

- Fixing appropriate interest rate to be charged to the customer based on the above factors Interest rate sensitivity analysis

The sensitivity analysis has been determined for borrowings where interest rates are variable, assuming the amount outstanding at the end of the reporting year was outstanding for the whole year. A 50 basis points increase or decrease in interest rates is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

35.6 Credit risk

Credit risk in the Company arises due to default by customers on their contractual obligations which results to financial losses. Credit Risk is a major risk in the Company and the Company''s asset base comprises loans for affordable housing and loans against property. Credit Risk in the Company stems from outright default due to inability or unwillingness of a customer to meet commitments in relation to lending, settlement and other financial transactions. The essence of credit risk assessment in the Company pivots around the early assessment of stress, either in a portfolio or an account, and taking appropriate measures.

35.6.1 Credit risk management

Credit risk in the Company is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. There is a clear segregation of duties between transaction originators in the business function and approvers in the credit risk function. Board approved credit policies and procedures mitigate the Company''s prime risk which is the default risk. There is a Credit Risk Management Committee in the

Company for the review of the policies, process and products on an ongoing basis, with approval secured from the Board as and when required. There is a robust Credit Risk Management set-up in the Company at various levels.

1. There are Credit teams to ensure implementation of various policies and processes through random customer visits and assessment, training of branch staff on application errors, liaison with other institutions to obtain necessary information/ loan closure documents, as the case may be, and highlight early warning signals and industry developments enabling pro-active field risk management.

2. The credit sanction is done through a delegation matrix where credit sanctioning powers are defined for respective levels.

3. Portfolio analysis and reporting is used to identify and manage credit quality and concentration risks.

4. Credit risk monitoring for the Company is broadly done at two levels: account level and portfolio level. Account monitoring aims to identify weak accounts at an incipient stage to facilitate corrective action. Portfolio monitoring aims towards managing risk concentration in the portfolio as well as identifying stress in certain occupations, markets and states.

35.6.2 Significant increase in credit risk

The Company monitors all financial assets that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk, the Company measures the loss allowance based on lifetime rather than Stage 1 (12-month) Expected Credit Loss (ECL). Pending the adoption of scoring models to assess the change in credit status at an account level and at portfolio level, the Company has adopted SICR (Significant Increase in Credit risk) criteria based on Days Past Due (DPD). The following table lists the staging criteria used in the Company: Staging Criterion

Stage-1: 0 up to 30 days past due Stage-2: 31 up to 90 days past due Stage-3: 91 and above days past due

Stage 2 follows the rebuttable presumption stated in Ind AS 109, that credit risk has increased significantly since initial recognition no later than when contractual payments are more than 30 days past due.

The Company also considers other qualitative factors and repayment history and considers

guidance issued by the Institute of Chartered accountants of India (ICAI) for staging of advances to which moratorium benefit has been extended under the COVID regulatory package issued by RBI and as approved by the Board.

35.6.3 Measurement of ECL

The key inputs used for measuring ECL on term loans issued by the Company are:

Probability of default (PD): The PD is an estimate of the likelihood of default over a given time horizon (12 months). It is estimated as at a point in time. To compute Expected Credit Loss (ECL) the portfolio is segregated into 3 stages viz. Stage 1, Stage 2 and Stage 3 on the basis of Days Past Dues. The Company uses 12 month PD for the stage 1 borrowers and lifetime PD for stage 2 and 3 to compute the ECL.

Loss given default (LGD): LGD is an estimation of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from eligible collateral.

Exposure at default (EAD): EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date including expected drawdowns on committed facilities.

Probability of Default

To arrive at Probability of Default, Vintage Analysis'' was done considering monthly defaults of borrower since origination.

The analysis considered Monthly Default Rates starting from inception until the end of observation period i.e. December 2022 to calculate default rates for each vintage month. Cumulative PD was calculated from the marginal PDs for each vintage month. Simple Average and Weighted Average PD was computed for each Month on Book (MOB) period starting from MOB 0 until MOB "n" (end of observation period). The Company has used Simple average to eliminate the bias that can be possible due to weighted average effect.

Loss Given Default

LGD was calculated using First time NPA (FTN) date and recovery data for each of these FTN dates. FTN date was taken from inception until the latest period. For each pool, recovery data was mapped to the subsequent months until current period from the respective default month i.e. recovery

data was retrieved and plotted against the flow of month i.e. Months on Book MOB 0, MOB 1, MOB 2, MOB 3 till MOB (n) against each default month. Considering time value of money, recoveries in each month was discounted to arrive at the value as of FTN date. Average Interest Rates charged for each disbursement year was used as the Effective Interest Rates (EIR) for the loans.

Marginal Recovery rates was computed for each month as Discounted Recovery amount for a given month divided by the total outstanding amount for the given FTN date. Cumulative recovery rates were computed for each FTN date and LGD for corresponding FTN date was computed by using the formula (1- Recovery Rate). Weighted average LGD was computed for the entire observation period, weights being the total outstanding amount for each FTN date.

Exposure at Default :

EAD is the total outstanding balance at the reporting date including principal and accrued interests at the reporting date. EAD calculation for all portfolios is as under:

Stage 1 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Stage 2 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Stage 3 Assets:

• [(The total outstanding balance drawn)

(Undrawn Portion*CCF undrawn)].

Credit Conversion Factor (CCF) for undrawn portion has been taken at 100% based on historical experience and other information available with the Company.

The Company measures ECL as the product of PD , LGD and EAD estimates for its Ind AS 109 specified financial obligations.

Credit Risk Concentrations

In order to manage concentration risk, the

Company, considering the regulatory limits, focuses on maintaining a diversified portfolio across housing loans and loans against property. An analysis of the Company''s credit risk concentrations is provided in the following tables which represent gross carrying amounts of each class.

Although collateral can be an important mitigation of credit risk, it is the Company''s practice to lend on the basis of the customer''s ability to meet the obligations out of cash flow resources other than placing primary reliance on collateral and other credit risk enhancements.

The Company obtains first and exclusive charge on all collateral that it obtains for the loans given. The loans are secured by collateral at the time of origination. The value of the property at the time of origination will be arrived by obtaining two valuation reports from in-house valuers.

Immovable Property is the collateral for Housing and non-housing loans. Security Interest in favour of the Company is created by Mortgage through deposit of title deeds

The Company does not obtain any other form of credit enhancement other than the above. All the Company''s term loans are secured by way of tangible Collateral.

Any surplus remaining after settlement of outstanding debt by way of sale of collateral is returned to the customer / borrower.

35.6.6 Offsetting financial assets and financial liabilities

The Company has not recognised any financial asset or liability on a net basis.

35.6.7 Financial Guarantee

The Company has issued Corporate Guarantees of Rs. 24,319.61 lakhs (March 31,2022 -Rs. 27,929.95 lakhs) to Banks and external lenders on behalf of the subsidiary - Aptus Finance India Private Limited. Based on the financial performance of the subsidiary, the Company does not expect the guarantee liability to devolve on the Company.

35.7 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to its reputation.

Exposure to liquidity risk

The Company manages and measures liquidity risk as per its ALM policy and the ALCO (Asset Liability Management Committee of the Company) is responsible for managing the liquidity risk. The Company not only measures its current liquidity position on an ongoing basis but also forecasts how liquidity position may emerge under different assumptions. The liquidity position is tracked through maturity or cash flow mismatches across buckets spanning all maturities.

35.8 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system or from external events. Operational risk is associated with human error, system failures and inadequate procedures and controls. It is the risk of loss arising from the potential that inadequate information system; technology failures, breaches in internal controls, fraud, unforeseen catastrophes, or other operational problems may result in unexpected losses or reputation problems. Operational risk exists in all products and business activities.

The Company recognizes that operational risk event types that have the potential to result in substantial losses includes Internal fraud, External fraud, employment practices and workplace safety, clients, products and business practices, business disruption and system failures, damage to physical assets, and finally execution, delivery and process management.

The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

36 Earnings per share

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year after considering the share split.

Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares, if any) 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 after considering the share split mentioned.

41 Share-based payments

Employee share option plan 41.1 Details of the employee share option plan

(a) In the Board Meeting held on February 11,2021, the Board approved the issue of up to 55,22,500 options under the Scheme titled "Aptus Employees Stock Option Scheme 2021" (hereinafter referred to as Aptus ESOS, 2021).

The Schemes allow the issue of options to employees of the Company. Each option comprises one underlying equity share.

As per the Scheme, the Nomination and Remuneration Committee ("The Committee") grants the options to the employees deemed eligible and also governs the operation of the scheme.

The difference between the fair price of the the options granted on the date of grant of option and the exercise price of the option representing Stock compensation expense is expensed over the vesting period.

42 Disclosure pursuant to RBI notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards

RBI has issued Notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 in respect of recognition of impairment on financial instruments starting from financial year 2020-21 for Housing Finance Companies. The Company has complied with the requirements of Ind AS and the guidelines and policies approved by the Board in this regard.

Any shortfall in ECL provision compared to the requirements as per IRAC norms are apportioned by the Company to Impairment Reserve at reporting periods. Such balance can be utilised / withdrawn by the Company only with prior permission of the Reserve Bank of India as per the said Circular. The shortfall in ECL provision compared to IRACP requirement as at March 31,2023 is Rs. Nil (As at March 31, 2022 Rs. Nil). The balance in the impairment reserve as at March 31,2023 is Rs. 610.36 lakhs (As at March 31, 2022 Rs. 610.36 lakhs) (Refer Note 20.1 and Note 20.2.4).

44 Leases

The Company has lease contracts for buildings used for the branches. Leases of such assets generally have lease terms between 3 and 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases for buildings with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the year:

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

45. Events after reporting period

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

46 Disclosure as required by National Housing Bank

The following disclosures have been given in terms of National Housing Bank''s notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory purpose, have been made so as to comply with NHB''s Policy Circular No. NHB(ND)/DRS/Policy Circular No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the extant provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions, 2010 including framework on prudential norms and other related circulars issued in this regard by NHB from time to time and the same have been compiled by the

Management in accordance with Accounting Standards prescribed under section 133 of the Companies Act, 2013, read with the Companies (Accounting Standards) Rules, 2006, as amended (Indian GAAP) and relied upon by the auditors.

46.10 Disclosure of Penalties imposed by NHB and other regulators

(i) During FY 2022-23, there were no penalties imposed by NHB or RBI and any other regulator/ supervisor/ enforcement authority.

(ii) The Company has not received any adverse comments in writing by NHB or other Regulators on regulatory compliances, with a specific communication to disclose the same to the public.

46.11 Related party transactions

Details of the related parties, nature of the relationship with whom Company has entered transactions, remuneration of directors and balances in related party account at the year end, are given in Note no. 34. There were no material transaction with related parties and all these transactions with related parties were carried out in ordinary course of business at arm''s length price.

46.12 Group Structure

The Company has only one wholly owned subsidiary - Aptus Finance India Private Limited. There are no other entities in the group.

46.14 Net Profit or Loss for the period, prior period items and changes in accounting policies

During the year,

(a) no prior period items occurred which has impact on Statement of Profit and Ioss,

(b) no change in Accounting policy,

(d) there is no withdrawal from reserve fund.

46.15 Revenue Recognition

There are no circumstances in which revenue recognition has been postponed by the Company pending the resolution of significant uncertainties.

46.16 Consolidated Financial Statements (CFS)

The Company has a wholly owned Subsidiary and the Consolidated financial statements is prepared in accordance with Ind AS 110.

46.27 Disclosure on frauds pursuant to Master Direction - Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016

There were no instances of fraud reported during the years ended March 31,2023 and March 31, 2022.

46.28 Percentage of outstanding loans granted against the collateral of gold jewellery to their outstanding total assets - Nil (March 31, 2022: Nil)46.29 Details on Principal Business Criteria

Principal Business Criteria for the Company to be classified as "Housing Finance Company" as per the Paragraph 4.1.17 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, February 17, 2021 is given below:

(f) Institutional set-up for liquidity risk management

The Board of Directors of the Company have adopted a Risk Management Policy. The Board adopted policy contains the framework and guidelines for Risk management. The changes brought in the Liquidity Risk Management Framework vide its Circular No. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 November 04, 2019 are also being covered as part of the Risk Management Policy which will be reviewed by the Board periodically for compliance and implementation.

The Board shall have the overall responsibility for management of liquidity risk by reviewing the implementation of the Risk Management Policy. The Company has also constituted Risk Management Committee and Asset-Liability Management Committee (ALCO) to carry out the functions as listed out in the said circular.

46.32 The Company has adopted all the norms issued under ''Prudential norms on Income recognition, Asset classification, and provisioning pertaining to advances - clarifications'' issued by the Reserve Bank of India (RBI) vide circular no.DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021. Such alignment has resulted in the transition of sub 90 DPD assets as additional non-performing assets as of March 31,2023, and provided as per norms.

46.33 The listed Non-Convertible Debentures of the Company secured by way of specific charge on assets under hypothecation and specified immovable property. The total asset cover is more than one hundred percent of the principal amount of the said debentures.

46.34 Disclosure pursuant to RBI notification dated September 24, 2021 on "Transfer of Loan Exposures" are given below:

(a) The Company has not transferred or acquired, any loans not in default during the year ended March 31,2023.

(b) The Company has not transferred or acquired, any stressed loans during the year ended March 31,2022.

46.35 Remuneration of Directors - Pecuniary relationship of Non-executive Directors.

Remuneration paid to Directors is reflected in Note no.34 "Related Party Transactions". There is no pecuniary relationship or transactions of Non-Executive Directors with the Company or its Directors., Senior Management or Group Companies

46.36 Disclosurepursuantto Reserve BankofIndiaCircular DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated February 17, 2021 and DOR.NBFC (PD) CC. No.102/03.10.001 /2019-20 dated November 4, 2019 pertaining to Liquidity Risk Management Framework for Non-Banking Financial Companies.

As per the Guidelines on Liquidity Risk Management Framework for NBFCs issued by RBI vide notification no. RBI/2019-20/88 DOR. NBFC (PD) CC. No.102/03.10.001/2019-20, HFCs are required to maintain Liquidity Coverage Ratio (LCR) from December 1, 2020. Under the said guidelines, all non-deposit taking HFCs with asset size of INR 5,000 crore and above but less than INR 10,000 crore are required to maintains a minimum LCR of 30%.

The total assets of the Company has crossed INR 5,000 crores as at March 31, 2022, the Company has presented the LCR related disclosures for the month of March 2022 only i.e. the period for which the guideline became applicable to the Company.

The Company has implemented the guidelines on Liquidity Risk Management Framework prescribed

by the Reserve Bank of India requiring maintenance of Liquidity Coverage Ratio (LCR), which aim to ensure that a HFC maintains an adequate level of unencumbered High Quality Liquid Assets (HQLA) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. Compliance with LCR is monitored by Asset Liability Management Committee (ALCO) of the Company.

Qualitative Information:Main drivers to the LCR numbers :

All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR computation.

Composition of HQLA:

The HQLA maintained by the Company comprises cash balance maintained in current account and callable fixed deposits with Scheduled Commercial Banks.

Concentration of funding sources:

The Company maintains diversified sources of funding comprising term loans, Securitisation loans and NCDs. The funding pattern is reviewed regularly by the management.

Other inflows and outflows in the LCR calculation that are not captured in the LCR common template but which the institution considers to be relevant for its liquidity profile

Nil

1. Weighted values have been calculated after the application of respective haircuts (for HQLA) and stress factors on inflow and outflow.

2. The above LCR disclosures are based on the data available with the Company which has been relied upon by the auditors.

47 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or other kind of funds) to or in any other person or entity, including foreign entity ("intermediaries"), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

The Company has not received any funds (which are material either individually or in the aggregate) from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

48 The disclosure on the following matters required under Schedule III as amended are not made, as the same are not

applicable or relevant for the Company.

a) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

b) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.

c) The Company has not been declared willful defaulter by any bank or financial institution or Government or any other Government authority.

d) The Company has not entered into any scheme of arrangement.

e) No satisfaction of charges are pending to be filed with the ROC.

f) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961.

g) The Company has no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

h) The Company does not possess any immovable property (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company during the financial year ended March 31,2023 and March 31, 2022.

i) The Group has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31,2023 and March 31, 2022

49 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year

classification / presentation.

---

Mar 31, 2022

(i) All term loans are originated in India

(ii) Term Loans include an amount of Rs. 500.00 lakhs (March 31, 2021 - Rs. 1,800.00 lakhs) given to Subsidiary. The loan is secured by book debts of Subsidiary.

(iii) Term Loans (other than (ii) above) are secured by deposit of original title deeds of immovable properties with the Company and/or registered mortgage of title deeds.

(iv) The Company has securitised certain term loans and managed servicing of such loan accounts. The balance outstanding in the pool, as at the reporting date is Rs. Nil (March 31, 2021: Rs. 55.54 lakhs). The carrying value of these assets have been de-recognised in the books of the Company.

(v) There are no outstanding loan to Public Institution.

(vi) Term loans do not include any loans given to employees of the Company.

(i) Redeemable Non-Convertible Debentures are secured by hypothecation of specified term loans amounting to Rs. 44,398.06 as at March 31, 2022 (As at March 31, 2021 - Rs. 44,814.28 lakhs ) and specified immovable property amounting to Rs. 64.57 lakhs as at March 31,2022 (March 31, 2021 - Rs. 64.57 lakhs ).

(ii) The Company has not defaulted in the repayment of borrowings and interest during any of the years presented.

(iii) NCDs are repayable as bullet payments on the due date of redemption.

(i) Term loans from scheduled banks and other financial institutions are secured by hypothecation of specified term loans amounting to Rs. 2,23,502.26 lakhs as at March 31, 2022 (March 31, 2021 - Rs. 2,09,368.66 lakhs).

(ii) The Company has not defaulted in the repayment of borrowings and interest during any of the years presented.

(iii) Term Loans from other financial institution (National Housing Bank) aggregating to Rs. Nil (March 31,2021 - Rs. 9,295.50 lakhs ) has been guaranteed by the promoter Mr. M Anandan.

(iv) Working Capital loans have been availed at Interest rate of 7.15%-8.80% p.a and are secured by hypothecation of specified term loans amounting to Rs. 7,716.17 lakhs as at March 31,2022 (March 31,2021 - Rs. 4,029.25 lakhs).

(v) The Company has utilised the funds raised from banks and financial institutions for the specific purpose for which they were borrowed.

(vi) The Company has borrowed funds from banks and financial institutions on the basis of security of current assets. It has filed quarterly returns or statements of current assets with banks and financial institutions and the said returns/ statements are in agreement with books of accounts.

(b) The Partly Paid-up Shares were made fully paid up on May 5, 2021, pursuant to a resolution of the board of directors of our Company dated May 5, 2021 for the first and final call for the balance amount of Rs. 525.03 per equity share of face value of Rs. 10 each being made on the Partly Paid-up Shares. Further, please note that pursuant to a resolution of the board of directors of our Company passed in their meeting held on May 5, 2021 and a resolution of the shareholders of our Company passed in their extraordinary general meeting held on May 6, 2021, each fully paid up equity share of our Company of face value Rs. 10 was split into 5 Equity Shares of face value Rs. 2 each, and accordingly, 9,62,83,258 equity shares of our Company of face value Rs. 10 each were split into 48,14,16,290 Equity Shares of face value Rs. 2 each.

(c) The Company had completed an Initial Public Offer ("IPO") of 7,87,55,000 equity shares of face value of Rs 2 each, at an issue price of Rs 353 per equity share, comprising of offer for sale of 6,45,90,695 equity shares by selling shareholders and fresh issue of 1,41,64,305 shares by the Company. The equity shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") on 24th August 2021.

(d) During the current year, the Company has allotted 11,50,000 and 1,87,500 equity shares to eligible employees under Employee Stock Option Scheme 2015 at exercise price of INR 15 and INR 26 per equity share respectively.

(e) Terms/rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs. 2 each. Each holder is entitled to one vote per equity share. Dividends proposed by the Board of Directors, if any is subject to the approval of the shareholders at the Annual General Meeting except in case of interim dividend.

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

20.2 Nature and purpose of reserves:20.2.1 Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013. During the year ended March 31, 2022, Securities premium was utilised to the extent of Rs. 1,874.49 lakhs on account of expenses incurred for the issue of Equity shares, in line with Section 52 of the Companies Act 2013.

20.2.2 Employee Stock Options Reserve

The amount represents reserve created to the extent of granted options based on the Employees Stock Option Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service. Also refer note 40.

20.2.3 Statutory Reserve under Section 29C of National Housing Bank (NHB) Act, 1987

As per Section 29C(1) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit after tax every year to a reserve before any dividend is declared. For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961, is considered to be an eligible transfer. During the year ended March 31, 2022, the company has transferred Rs. 5,063.99 lakhs (March 31,2021 - Rs. 3,528.03 lakhs) in terms of section 36(1)(viii) to the Special Reserve.

The Company has transferred an amount of Rs. 1,100.02 lakhs during the year ended March 31, 2022 (March 31, 2021 - Rs. 826.82 lakhs ) to Statutory Reserve u/s 29C of the National Housing Bank Act, 1987. Total amount clearly earmarked for the purposes of Statutory Reserve u/s 29C is Rs. 21,282.50 lakhs (March 31, 2021 -Rs. 15,118.49 lakhs ) out of which Rs. 2,985.22 lakhs (March 31, 2021 - Rs. 1,885.20 lakhs) is distinctly identifiable above and the balance of Rs. 18,297.28 lakhs (March 31, 2021 - Rs. 13,233.29 lakhs ) is included in the Special Reserve created u/s 36(1)(viii) of the Income-tax Act, 1961.

The Company has resolved not to make withdrawals from the Special reserve created under Section 36(1)(viii) of the Income-tax Act, 1961.

20.2.4 Impairment Reserve

In terms of the requirement as per RBI notification no. RBI/2020-21/100 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated 17 February 2021, Housing Finance Companies (HFCs) are required to create an impairment reserve for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification and Provisioning (IRACP) norms (including provision on standard assets). Accordingly, the Company has transferred such shortfall amount to Impairment Reserve. No withdrawal from the reserve is permitted without prior permission from the Department of Supervision, RBI.

20.2.5 Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfer to statutory reserves, general reserves and dividend distributed to shareholders.

No final dividend has been proposed during the year and further no interim dividend is declared and paid by the Company during the year.

The income tax rate used for the above reconciliations are the corporate tax rate payable by the Company in India on taxable profits under the Income-tax Act, 1961.

The Company had elected to exercise the option of a lower tax rate provided under Section 115BAA of the Income tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated September 20, 2019. Accordingly, the Company has recognised provision for income tax for the year ended March 31, 2022 and March 31,2021 basis the rate provided in the said section.

28.1 Contingent liabilities as per Ind AS 37 and commitments

i) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also refer note 17.

ii) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 28.2 Contingent liabilities below.

iii) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceedings and claims, in different stages of process.

28.2 Contingent Liabilities

Rs. in lakhs
Particulars	As at March 31, 2022	As at March 31, 2021
Corporate undertakings for securitisation of receivables for which the outflow would arise in the event of a shortfall, if any, in the cashflows of the pool of the securitised receivables. (Refer note (i) below)	-	55.54

(i) In respect of these undertakings, management does not believe, based on currently available information, that the maximum outflow that could arise, will have a material adverse effect on the Company''s financial condition. This securitisation deal is closed during the FY2021-22.

The Company does not have any pending litigations which would impact its financial position.

30 Sharing of Costs

The Company and its subsidiary share certain costs / service charges. These costs have been recovered by the Company from its subsidiary on a basis mutually agreed by both the entities, which has been relied upon by the Auditors.

Disclosures under Accounting Standards

31 Employee benefit plans31.1 Defined contribution plans

The Company makes Provident Fund contributions for qualifying employees to the Regional Provident Fund Commissioner. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 469.04 lakhs (March 31, 2021 - Rs. 369.19 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to the scheme by the Company are at rates specified in the rules of the scheme.

31.2 Defined benefit plans

The Company provides for gratuity, a defined benefit plan (the "gratuity plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee''s last drawn salary and years of employment with the Company. The Company does not have a funded gratuity scheme for its employees.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

1. The estimate of the future salary increase takes into account inflation, seniority, promotion and other relevant factors.

2. Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

3. Experience adjustments Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

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

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

31.4 The date on which the Code on Social Security, 2020 (the "Code'') relating to employee benefits shall become effective is yet to be notified and the related rules are yet to be finalized. The Company will evaluate the code and its rules, assess the impact, if any, and account for the same when they become effective.

32 Segment Reporting:

The Chairman and Managing Director of the Company takes decision in respect of allocation of resources and assesses the performance basis the report/ information provided by functional heads and are thus considered to be Chief Operating Decision Maker ("CODM")

The Company operates under the principal business segment viz. ""providing long term housing finance, loans against property and refinance loans"". CODM views and monitors the operating results of its single business segment for the purpose of making decisions about resource allocation and performance assessment. Accordingly, there are no separate reportable segments in accordance with the requirements of Ind AS 108 ''Operating segment'' and hence, there are no additional disclosures to be provided other than those already provided in the consolidated financial statements. The Company''s operations are predominantly confined in India.

33 Earnings and Expenditure in foreign currency - Rs. Nil (March 31, 2021: Rs. Nil)

* As the future liabilities of gratuity and leave encashment are provided on actuarial basis for the Company as a whole, the amounts pertaining to key managerial personnel is not separately ascertainable and therefore not included above.

# Includes Investment in subsidiary arising out of financial guarantee obligations.

35.1 Capital management

The Company actively manages its capital to meet regulatory norms and current and future business needs, considering the risks in its businesses, expectations of rating agencies, shareholders and investors, and the available options of raising capital. Its capital management framework is administered by the risk committee of Company. During the current year, there has been no change in objectives, policies or processes for managing capital.

The Company is subject to the capital adequacy requirements of the National Housing Bank (''NHB'') / Reserve Bank of India (''RBI''). As per the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021, the Company is required to maintain a minimum ratio of total capital to risk adjusted assets as determined by a specified formula, at least half of which must be Tier 1 capital, which is generally shareholders'' equity.

The Company has complied with all regulatory requirements related to regulatory capital and capital adequacy ratios as prescribed by NHB / RBI.

The company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial

liabilities.

35.3 Fair Value Measurements Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value disclosure are required in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

(b) Fair value of financial instruments not measured at fair value

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Company''s financial statements. These fair values were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments in the above tables and, as such, may differ from the techniques and assumptions.

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 3 except for cash and cash equivalents and bank balances other than cash and cash equivalents which have been classified as Level 1.

Loans

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, probability of default and loss given default estimates. Where such information is not available, the Company uses historical experience and other information used in its collective impairment models.

Fair values of lending portfolios are calculated using a portfolio-based approach. The Company then calculates and extrapolates the fair value to the entire portfolio, using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. The credit risk is applied as a top-side adjustment based on the collective impairment model incorporating probability of defaults and loss given defaults

Debt securities & Borrowings other than debt securities

The fair values of Debt Securities and Borrowings other than Debt securities are estimated by discounted cash flow models that incorporate interest cost estimates considering all significant characteristics of the borrowing. They are classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

35.4 Market risk management

Market Risk is the risk of loss in on-balance sheet and off-balance sheet positions arising from movements in market place, in particular, changes in interest rates, exchange rates and equity. In line with the regulatory requirements, the Company has in place a Board approved Market Risk Management and Asset Liability Management ("ALM") policy in place. The Policy provides the framework for assessing market risk, in particular, tracking of events happening in market place, changes in policies / guidelines of government and regulators, exchange rate movement, equity market movements, money market movements etc.

35.5 Interest rate risk management

Interest rate risk is managed through ALM policy framed by the Company. The ALM policy is administered through the ALCO (Asset Liability Management Committee) which monitors the following on a monthly basis:

- Borrowing cost of the Company as on a particular date

- Interest rate scenario existing in the market

- Gap in cash flows at the prevalent interest rates

- Effect of Interest rate changes on the Gap in the cash flows

- Fixing appropriate interest rate to be charged to the customer based on the above factors Interest rate sensitivity analysis

The sensitivity analysis has been determined for borrowings where interest rates are variable, assuming the amount outstanding at the end of the reporting year was outstanding for the whole year. A 50 basis points increase or decrease in interest rates is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

35.6 Credit risk

Credit risk in the Company arises due to default by customers on their contractual obligations which results to financial losses. Credit Risk is a major risk in the Company and the Company''s asset base comprises loans for affordable housing and loans against property. Credit Risk in the Company stems from outright default due to inability or unwillingness of a customer to meet commitments in relation to lending, settlement and other financial transactions. The essence of credit risk assessment in the Company pivots around the early assessment of stress, either in a portfolio or an account, and taking appropriate measures.

35.6.1 Credit risk management

Credit risk in the Company is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. There is a clear segregation of duties between transaction originators in the business function and approvers in the credit risk function. Board approved credit policies and procedures mitigate the Company''s prime risk which is the default risk. There is a Credit Risk Management Committee in the Company for the review of the policies, process and products on an ongoing basis, with approval secured from the Board as and when required. There is a robust Credit Risk Management set-up in the Company at various levels.

1. There are Credit teams to ensure implementation of various policies and processes through random customer visits and assessment, training of branch staff on application errors, liaison with other institutions to obtain necessary information/loan closure documents, as the case may be, and highlight early warning signals and industry developments enabling pro-active field risk management.

2. The credit sanction is done through a delegation matrix where credit sanctioning powers are defined for respective levels.

3. Portfolio analysis and reporting is used to identify and manage credit quality and concentration risks.

4. Credit risk monitoring for the Company is broadly done at two levels: account level and portfolio level. Account monitoring aims to identify weak accounts at an incipient stage to facilitate corrective action. Portfolio monitoring aims towards managing risk concentration in the portfolio as well as identifying stress in certain occupations, markets and states.

35.6.2 Significant increase in credit risk

The Company monitors all financial assets that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk, the Company measures the loss allowance based on lifetime rather than Stage 1 (12-month) Expected Credit Loss (ECL). Pending the adoption of scoring models to assess the change in credit status at an account level and at portfolio level, the Company has adopted SICR (Significant Increase in Credit risk) criteria based on Days Past Due (DPD). The following table lists the staging criteria used in the Company: Staging Criterion

Stage-1: 0 up to 30 days past due

Stage-2: 31 up to 90 days past due

Stage-3: 90 and above days past due

Stage 2 follows the rebuttable presumption stated in Ind AS 109, that credit risk has increased significantly since initial recognition no later than when contractual payments are more than 30 days past due.

The Company also considers other qualitative factors and repayment history and considers guidance issued by the Institute of Chartered accountants of India (ICAI) for staging of advances to which moratorium benefit has been extended under the COVID regulatory package issued by RBI and as approved by the Board.

35.6.3 Measurement of ECL

The key inputs used for measuring ECL on term loans issued by the Company are:

Probability of default (PD): The PD is an estimate of the likelihood of default over a given time horizon (12 Month). It is estimated as at a point in time. To compute Expected Credit Loss (ECL) the portfolio is segregated into 3 stages viz. Stage 1, Stage 2 and Stage 3 on the basis of Days Past Dues. The Company uses 12 month PD for the stage 1 borrowers and lifetime PD for stage 2 and 3 to compute the ECL.

Loss given default (LGD): LGD is an estimation of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from eligible collateral.

Exposure at default (EAD): EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date including expected drawdowns on committed facilities.

Probability of Default

To arrive at Probability of Default, Vintage Analysis'' was done considering monthly defaults of borrower since origination.

The analysis considered Monthly Default Rates starting from inception until the end of observation period i.e. March 2021 to calculate default rates for each vintage month. Cumulative PD was calculated from the marginal PDs for each vintage month. Simple Average and Weighted Average PD was computed for each Month on Book (MOB) period starting from MOB 0 until MOB "n" (end of observation period). The Company has used Simple average to eliminate the bias that can be possible due to weighted average effect.

Loss Given Default

LGD was calculated using First time NPA (FTN) date and recovery data for each of these FTN dates. FTN date was taken from inception until the latest period. For each pool, recovery data was mapped to the subsequent months until current period from the respective default month i.e. recovery data was retrieved and plotted against the flow of month i.e. Months on Book MOB 0, MOB 1, MOB 2, MOB 3 till MOB (n) against each default month. Considering time value of money, recoveries in each month was discounted to arrive at the value as of FTN date. Average

Interest Rates charged for each disbursement year was used as the Effective Interest Rates (EIR) for the loans.

Marginal Recovery rates was computed for each month as Discounted Recovery amount for a given month divided by the total outstanding amount for the given FTN date. Cumulative recovery rates were computed for each FTN date and LGD for corresponding FTN date was computed by using the formula (1- Recovery Rate). Weighted average LGD was computed for the entire observation period, weights being the total outstanding amount for each FTN date.

Exposure at Default :

EAD is the total outstanding balance at the reporting date including principal and accrued interests at the reporting date. EAD calculation for all portfolios is as under:

Stage 1 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 2 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 3 Assets:

• [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Credit Conversion Factor (CCF) for undrawn portion has been taken at 100% based on historical experience and other information available with the Company.

The Company measures ECL as the product of PD , LGD and EAD estimates for its Ind AS 109 specified financial obligations.

Credit Risk Concentrations

In order to manage concentration risk, the Company, considering the regulatory limits, focuses on maintaining a diversified portfolio across housing loans and loans against property. An analysis of the Company''s credit risk concentrations is provided in the following tables which represent gross carrying amounts of each class.

Although collateral can be an important mitigation of credit risk, it is the Company''s practice to lend on the basis of the customer''s ability to meet the obligations out of cash flow resources other than placing primary reliance on collateral and other credit risk enhancements.

The Company obtains first and exclusive charge on all collateral that it obtains for the loans given. The loans are secured by collateral at the time of origination. The value of the property at the time of origination will be arrived by obtaining two valuation reports from in-house valuers.

Immovable Property is the collateral for Housing and non-housing loans. Security Interest in favour of the Company is created by Mortgage through deposit of title deeds

The Company does not obtain any other form of credit enhancement other than the above. All the Company''s term loans are secured by way of tangible Collateral.

Any surplus remaining after settlement of outstanding debt by way of sale of collateral is returned to the customer / borrower.

35.6.6 Offsetting financial assets and financial liabilities

The Company has not recognised any financial asset or liability on a net basis.

35.6.7 Financial Guarantee

The Company has issued Corporate Guarantees of Rs. 27,929.95 lakhs (March 31, 2021 -Rs. 21,675.40 lakhs) to Banks and external lenders on behalf of the subsidiary - Aptus Finance India Private Limited. Based on the financial performance of the subsidiary, the Company does not expect the guarantee liability to devolve on the Company.

35.7 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the its reputation.

Exposure to liquidity risk

The Company manages and measures liquidity risk as per its ALM policy and the ALCO (Asset Liability Management Committee of the Company) is responsible for managing the liquidity risk. The Company not only measures its current liquidity position on an ongoing basis but also forecasts how liquidity position may emerge under different assumptions. The liquidity position is tracked through maturity or cash flow mismatches across buckets spanning all maturities.

35.8 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system or from external events. Operational risk is associated with human error, system failures and inadequate procedures and controls. It is the risk of loss arising from the potential that inadequate information system; technology failures, breaches in internal controls, fraud, unforeseen catastrophes, or other operational problems may result in unexpected losses or reputation problems. Operational risk exists in all products and business activities.

The Company recognizes that operational risk event types that have the potential to result in substantial losses includes Internal fraud, External fraud, employment practices and workplace safety, clients, products and business practices, business disruption and system failures, damage to physical assets, and finally execution, delivery and process management.

The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

36 Earnings per share

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year after considering the share split mentioned in Note 19(b).

Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares, if any) 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 after considering the share split mentioned in Note 19(b).

(ii) The Unspent amount apart from ongoing projects mentioned above amounting to INR 167.90 lakhs is required to be transferred to any of the funds mentioned in the Schedule VII of the Companies Act, 2013 within six months from the end of the financial year March 31, 2022. The Company has transferred amount of INR 190.92 lakhs pertaining to shortfall at the end of FY2020-21 within six months from the end of March 31,2021 to the schedule VII funds.

(iii) There is no amount required to be contributed to specified fund u/s 135 (6) by the Company.

39 Transferred financial assets that are not derecognised in their entirety

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

The company has Securitised certain loans, however the company has not transferred substantially all risks and rewards, hence these assets have not been de-recognised.

41 Share-based payments

Employee share option plan 41.1 Details of the employee share option plan

(a) In the Board Meeting held on February 11,2021, the Board approved the issue of up to 55,22,500 options under the Scheme titled "Aptus Employees Stock Option Scheme 2021" (hereinafter referred to as Aptus ESOS, 2021).

The Schemes allow the issue of options to employees of the Company. Each option comprises one underlying equity share.

As per the Scheme, the Nomination and Remuneration Committee ("The Committee") grants the options to the employees deemed eligible and also governs the operation of the scheme.

The difference between the fair price of the the options granted on the date of grant of option and the exercise price of the option representing Stock compensation expense is expensed over the vesting period.

42 Disclosure pursuant to RBI notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards

RBI has issued Notification no. RBI/2020-21/60 DOR.NBFC (HFQ.CCNo.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 in respect of recognition of impairment on financial instruments starting from financial year 2020-21 for Housing Finance Companies. The Company has complied with the requirements of Ind AS and the guidelines and policies approved by the Board in this regard.

Any shortfall in ECL provision compared to the requirements as per IRAC norms are apportioned by the Company to Impairment Reserve at reporting periods. Such balance can be utilised / withdrawn by the Company only with prior permission of the Reserve Bank of India as per the said Circular. The shortfall in ECL provision compared to IRACP requirement as at March 31, 2022 is Rs. Nil (As at March 31, 2021 Rs. 301.53 lakhs). The balance in the impairment reserve as at March 31, 2022 is Rs. 610.36 lakhs (As at March 31, 2021 Rs. 610.36 lakhs) (Refer Note 19.1 and Note 19.2.4).

44 Leases

The Company has lease contracts for buildings used for the branches. Leases of such assets generally have lease terms between 3 and 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases for buildings with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the year:

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

45. Events after reporting period

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

46 Disclosure as required by National Housing Bank

The following disclosures have been given in terms of National Housing Bank''s notification no. NHB.HFC.CG-DIR.1/ MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/Pol-No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory purpose, have been made so as to comply with NHB''s Policy Circular No. NHB(ND)/DRS/Policy Circular No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the extant provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions 2010 including framework on prudential norms and other related circulars issued in this regards by NHB from time to time and the same have been compiled by the Management in accordance with Accounting Standards prescribed under section 133 of the Companies Act, read with the Companies (Accounting Standards) Rules, 2006, as amended (Indian GAAP) and relied upon by the auditors.

46.10 Disclosure of Penalties imposed by NHB and other regulators

(i) During FY 2021-22, there were no penalties imposed by NHB or RBI and any other regulator/ supervisor/ enforcement authority.

(ii) An amount of Rs. 5,000, including GST has been levied by National Housing Bank for contravention of Section 29C(1) of the National Housing Bank Act, 1987 during the period ended March 31,2021. Also, an amount of Rs. 5,000, including GST has been levied by National Housing Bank for non-compliance with respect to the provisions of Para 28 of the Housing Finance Companies (NHB) Directions, 2010 during the period ended March 31, 2021.

(iii) The Company has not received any adverse comments in writing by NHB or other Regulators on regulatory compliances, with a specific communication to disclose the same to the public.

46.11 Related party transactions

Details of the related parties, nature of the relationship with whom Company has entered transactions, remuneration of directors and balances in related party account at the year end, are given in Note no. 34. There were no material transaction with related parties and all these transactions with related parties were carried out in ordinary course of business at arm''s length price.

46.12 Group Structure

The Company has only one wholly owned subsidiary - Aptus Finance India Private Limited. There are no other entities in the group.

46.14 Net Profit or Loss for the period, prior period items and changes in accounting policies

During the year,

(a) no prior period items occurred which has impact on Statement of Profit and loss,

(b) no change in Accounting policy,

(d) there is no withdrawal from reserve fund.

46.15 Revenue Recognition

There are no circumstances in which revenue recognition has been postponed by the Company pending the resolution of significant uncertainties.

46.16 Consolidated Financial Statements (CFS)

The Company has a wholly owned Subsidiary and the Consolidated financial statements is prepared in accordance with Ind AS 110.

46.27 Disclosure on frauds pursuant to Master Direction - Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016

There were no instances of fraud reported during the years ended March 31,2022 and March 31, 2021.

46.28 Percentage of outstanding loans granted against the collateral of gold jewellery to their outstanding total assets - Nil (March 31,2021: Nil)

(f) Institutional set-up for liquidity risk management

The Board of Directors of the Company have adopted a Risk Management Policy. The Board adopted policy contains the framework and guidelines for Risk management. The changes brought in the Liquidity Risk Management Framework vide its Circular No. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 November 04, 2019 are also being covered as part of the Risk Management Policy which will be reviewed by the Board periodically for compliance and implementation.

The Board shall have the overall responsibility for management of liquidity risk by reviewing the implementation of the Risk Management Policy. The Company has also constituted Risk Management Committee and Asset-Liability Management Committee (ALCO) to carry out the functions as listed out in the said circular.

46.32 The Company has adopted all the norms issued under ''Prudential norms on Income recognition, Asset classification, and provisioning pertaining to advances - clarifications'' issued by the Reserve Bank of India (RBI) vide circular no.DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021. Such alignment has resulted in the transition of sub 90 DPD assets as additional non-performing assets as of March 31,2022, and provided as per norms.

46.33 The listed Non-Convertible Debentures of the Company aggregating Rs. 27,751.78 Lakhs as at March 31, 2022 are secured by way of an exclusive charge on identified standard receivables of the Company and also by a subservient charge over immovable property. The total asset cover is more than one hundred percent of the principal amount of the said debentures.

46.34 Disclosure pursuant to RBI notification dated September 24, 2021 on "Transfer of Loan Exposures" are given below:

(a) The Company has not transferred or acquired, any loans not in default during the year end March 31, 2022.

(b) The Company has not transferred or acquired, any stressed loans during the year ended March 31, 2022.

46.35 Remuneration of Directors - Pecuniary relationship of Non-executive Directors.

Remuneration paid to Directors is reflected in Note no.34 "Related Party Transactions". There is no pecuniary relationship or transactions of the Non-Executive Directors with the Company or its Directors., Senior Management or Group Companies.

46.36 Disclosure pursuant to Reserve Bank of India Circular DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated February 17, 2021 and DOR.NBFC (PD) CC. No.102/03.10.001 /2019-20 dated November 4, 2019 pertaining to Liquidity Risk Management Framework for Non-Banking Financial Companies.

As per the Guidelines on Liquidity Risk Management Framework for NBFCs issued by RBI vide notification no. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20, HFCs are required to maintain Liquidity Coverage Ratio (LCR) from December 1, 2020. Under the said guidelines, all non-deposit taking HFCs with asset size of INR 5,000 crore and above but less than INR 10,000 crore are required to maintains a minimum LCR of 30%.

The total assets of the Company has crossed INR 5,000 crores as at March 31, 2022, the Company has presented the LCR related disclosures for the month of March 2022 only i.e. the period for which the guideline became applicable to the Company.

The Company has implemented the guidelines on Liquidity Risk Management Framework prescribed by the Reserve Bank of India requiring maintenance of Liquidity Coverage Ratio (LCR), which aim to ensure that a HFC maintains an adequate level of unencumbered High Quality Liquid Assets (HQLA) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. Compliance with LCR is monitored by Asset Liability Management Committee (ALCO) of the Company.

Qualitative Information:

Main drivers to the LCR numbers :

All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR computation.

Composition of HQLA:

The HQLA maintained by the Company comprises cash balance maintained in current account and callable fixed deposits with Scheduled Commercial Banks.

Concentration of funding sources:

The Company maintains diversified sources of funding comprising term loans, Securitisation loans and NCDs. The funding pattern is reviewed regularly by the management.

1. Weighted values have been calculated after the application of respective haircuts (for HQLA) and stress factors on inflow and outflow.

2. Since the disclosure is effective from current financial year, the comparative disclosure for previous year is not applicable.

3. The above LCR disclosures are based on the data available with the Company which has been relied upon by the auditors.

47 The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or other kind of funds) to or in any other person or entity, including foreign entity ("intermediaries"), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

The Company has not received any funds (which are material either individually or in the aggregate) from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

48 The disclosure on the following matters required under Schedule III as amended are not made, as the same are not applicable or relevant for the Company.

a) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

b) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.

c) The company has not been declared as a wilful defaulter by any bank or financial Institution or other lender.

d) The Company has not entered into any scheme of arrangement.

e) All charges or satisfaction are registered with ROC for the financial years ended March 31, 2022 and March 31, 2021. No charges or satisfactions are yet to be registered with ROC.

f) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

g) The Company has no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

h) No loans or advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person and accordinlgy no disclosures have been made on account of such loans or advances.

i) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 for the financial years ended March 31,2022 and March 31, 2021.

49 The impact of COVID-19 on the Company''s future performance will depend on the ongoing and as well as future developments, including, among other things, any new information concerning COVID 19 pandemic and any measure to contain the spread or mitigate its impact, whether mandated by the Government or adopted by us. The management has considered events up to the date of these standalone financial statements to determine the financial implications including in respect of expected credit loss provisioning and has created required provisions.

50 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / presentation.

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Mar 31, 2021

(i) ALL term Loans are originated in India

(ii) Term Loans include an amount of ''1,800.00 Lakhs (March 31, 2020 - ''5,100.00 Lakhs) given to Subsidiary. The Loan is secured by book debts of Subsidiary.

(iii) Term Loans (other than (ii) above) are secured by deposit of original title deeds of immovable properties with the Company and/or registered mortgage of title deeds.

(iv) The Company has securitised certain term Loans and managed servicing of such Loan accounts. The balance outstanding in the pool, as at the reporting date is ''55.54 Lakhs (March 31, 2020: ''302.52 Lakhs). The carrying value of these assets have been de-recognised in the books of the Company.

(v) There are no outstanding Loan to Public Institution.

(vi) Term Loans do not include any Loans given to employees of the Company.

(vii) Debt securities and borrowings (other than debt securities) of the Company are secured by hypothecation of specified term Loans (refer note 12 and 13).

(i) Redeemable Non-Convertible Debentures are secured by hypothecation of specified term loans amounting to ''44,814.28 lakhs as at March 31,2021 (As at March 31,2020 - ''70,156.75 lakhs) and specified immovable property amounting to ''64.57 lakhs as at March 31, 2021 (March 31,2020 - ''64.57 lakhs).

(ii) The Company has not defaulted in the repayment of borrowings and interest during any of the years presented.

(iii) NCDs are repayable as bullet payments on the due date of redemption.

* During the year ended March 31, 2021, the Company has made an early redemption of debentures.

(i) Term loans from scheduled banks and other financial institutions are secured by hypothecation of specified term loans amounting to ''2,09,368.66 lakhs as at March 31,2021 (March 31,2020 - ''1,45,429.10 lakhs).

(ii) The Company has not defaulted in the repayment of borrowings and interest during any of the years presented.

(iii) Term Loans from other financial institution (National Housing Bank) aggregating to ''9,295.50 lakhs (March 31, 2020 -'' 11,274.82 lakhs) has been guaranteed by the promoter Mr. M Anandan.

(iv) Working Capital loans have been availed at Interest rate of 8.00-8.15% p.a and are secured by hypothecation of specified term loans amounting to ''4,029.25 lakhs as at March 31, 2021 (March 31, 2020 - ''1,170.22 lakhs).

(b) During the year ended March 31, 2021, pursuant to Aptus Employees Stock Option Scheme (ESOP) 2015, the Board of Directors allotted 3,45,000 fully paid up equity shares of ''10 each at a premium of ''65 each and 75,000 fully paid up equity shares of ''10 each at a premium of ''120 each to the employees of the Company vide circular resolution dated December 02, 2020.

(c) During the year ended March 31, 2020, the Company has allotted 1,52,08,121 fully paid-up equity shares of ''10 each at a premium of ''516.03 per share and 15,00,000 partly paid-up equity shares of ''10 each (Paid-up to the extent of ''1 per share) on preferential basis. The said allotment has been approved by the Board of Directors at its meeting held on August 8, 2019 and by the shareholders in the Extraordinary General Meeting held on August 19, 2019 respectively (Refer Note 44(ii)).

(d) During the year ended March 31,2020, pursuant to Aptus Employees Stock Option Scheme (ESOP) 2015, the Board of Directors allotted 3,35,000 fully paid up equity shares of ''10 each at a premium of ''65 each and 37,500 fully paid up equity shares of ''10 each at a premium of ''120 each to the employees of the Company vide circular resolution dated October 14, 2019.

(e) Terms/rights attached to Equity Shares:

The Company has only one class of equity shares having a par value of ''10 each. Each holder is entitled to one vote per equity share. Dividends proposed by the Board of Directors, if any is subject to the approval of the shareholders at the Annual General Meeting except in case of interim dividend.

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

19.2 Nature and purpose of reserves:

19.2.1 Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013. During the year ended March 31, 2020, Securities premium was utilised to the extent of ''381.50 lakhs on account of expenses incurred for the issue of Equity shares, in line with Section 52 of the Companies Act 2013.

19.2.2 Employee Stock Options Reserve

The amount represents reserve created to the extent of granted options based on the Employees Stock Option Schemes. Under Ind AS 102, fair value of the options granted is to be expensed out over the life of the vesting period as employee compensation costs reflecting period of receipt of service. Also refer note 40.

19.2.3 Statutory Reserve under Section 29C of National Housing Bank (NHB) Act, 1987

As per Section 29C(1) of the National Housing Bank Act, 1987, the Company is required to transfer at least 20% of its net profit after tax every year to a reserve before any dividend is declared. For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961, is considered to be an eligible transfer. During the year ended March 31,2021, the company has transferred ''3,528.03 lakhs (March 31, 2020 - ''2,640.04 lakhs) in terms of section 36(1)(viii) to the Special Reserve.

The Company has transferred an amount of ''826.82 lakhs during the year ended March 31, 2021 (March 31, 2020 - ''986.03 lakhs) to Statutory Reserve u/s 29C of the National Housing Bank Act, 1987. Total amount clearly earmarked for the purposes of Statutory Reserve u/s 29C is ''12,906.87 lakhs (March 31, 2020 - ''8,551.97 lakhs) out of which ''1,885.20 lakhs (March 31, 2020 -''1,058.38 lakhs) is distinctly identifiable above and the balance of ''11,021.67 lakhs (March 31, 2020 - ''7,493.59 lakhs) is included in the Special Reserve created u/s 36(1)(viii) of the Income-tax Act, 1961.

The Company has resolved not to make withdrawals from the Special reserve created under Section 36(1)(viii) of the Income-tax Act, 1961.

19.2.4 Impairment Reserve

In terms of the requirement as per RBI notification no. RBI/2020-21/100 DOR.FIN.HFC.CC.No.120/03.10.136/2020-21 dated 17 February 2021, Housing Finance Companies (HFCs) are required to create an impairment reserve for any shortfall in impairment allowances under Ind AS 109 and Income Recognition, Asset Classification and Provisioning (IRACP) norms (including provision on standard assets). Accordingly, the Company has transferred such shortfall amount to Impairment Reserve. No withdrawal from the reserve is permitted without prior permission from the Department of Supervision, RBI.

19.2.5 Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings is a free reserve available to the Company and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date. The amount that can be distributed by the Company as dividends to its Equity Shareholders is determined based on the financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported are not distributable in entirety and includes non-distributable items including unrealised gains, notional gains and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value, etc.

The income tax rate used for the above reconciliations are the corporate tax rate payable by the Company in India on taxable profits under the Income-tax Act, 1961.

26.2 The Company has elected to exercise the option of a lower tax rate provided under Section 115BAA of the Income tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 dated September 20, 2019. Accordingly, the Company has recognised provision for income tax for the year ended March 31, 2020 basis the rate provided in the said section and re-measured its opening balance of deferred tax liabilities ("DTL") (net) as at April 1, 2019 and has reversed DTL of ''175.53 lakhs to the statement of profit and loss.

26.3 During the year ended March 31, 2020, the Company has reversed deferred tax liabilities of ''1,796.38 lakhs created in earlier years, on Special Reserve created under section 36(1)(viii) of the Income-tax Act, 1956 on the basis of a resolution of the Board of Directors of the Company that there is no intention to make withdrawals from such Special Reserve.

27.1 Contingent liabilities as per Ind AS 37 and commitments

i) Matters wherein management has concluded the Company''s liability to be probable have accordingly been provided for in the books. Also refer note 16.

ii) Matters wherein management has concluded the Company''s liability to be possible have accordingly been disclosed under Note 27.2 Contingent liabilities below.

iii) Matters wherein management is confident of succeeding in these litigations and have concluded the Company''s liability to be remote. This is based on the relevant facts of judicial precedents and as advised by Legal counsel which involves various Legal proceedings and claims, in different stages of process.

Note: 28 Micro, Small and Medium Enterprises

Based on the extent of information available with the Management, there are no transactions with Micro and Small Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) during the year ended March 31,2021 and March 31, 2020. This has been relied upon by the Auditors.

Note: 29 Sharing of Costs

The Company and its subsidiary share certain costs / service charges. These costs have been recovered by the Company from its subsidiary on a basis mutually agreed to between them, which has been relied upon by the Auditors.

Disclosure under Accounting Standards Note: 30 Employee benefit plans

30.1 Defined contribution plans

The Company makes Provident Fund contributions for qualifying employees to the Regional Provident Fund Commissioner. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized ''369.19 lakhs (March 31, 2020 - ''305.00 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to the scheme by the Company are at rates specified in the rules of the scheme.

30.2 Defined benefit plans

The Company provides for gratuity, a defined benefit plan (the "gratuity plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee''s last drawn salary and years of employment with the Company. The Company does not have a funded gratuity scheme for its employees.

The Company is exposed to various risks in providing the above gratuity benefit such as: interest rate risk, longetivity risk and salary risk.

Interest risk: A decrease in the bond interest rate will increase the plan liability.

30.2 Defined benefit plans (Contd..)

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary escalation risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Gratuity provision has been made based on the actuarial valuation done as at the year end using the Projected Unit Credit method. The details of actuarial valuation as provided by the Independent Actuary is as follows:

1. The estimate of the future salary increase takes into account inflation, seniority, promotion and other relevant factors.

2. Discount rate is based on the prevailing market yields of Indian Government Bonds as at the Balance Sheet date for the estimated term of the obligation.

Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The following table summarizes the impact on defined benefit obligation arising due to increase / decrease in key actuarial assumptions by 50 basis points:

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

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

30.4 The Code of Social Security, 2020 (the "Code") relating to employee benefits during employment and post-employment benefits, received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Ministry of Labour and Employment has also released draft rules thereunder on November 13, 2020 and has invited suggestions from stakeholders, which are under consideration by the Ministry. The Company will evaluate the rules, assess the impact, if any, and account for the same once the rules are notified and become effective.

Note: 31 Segment Reporting

The Chairman and Managing Director of the Company takes decision in respect of allocation of resources and assesses the performance basis the report/ information provided by functional heads and are thus considered to be Chief Operating Decision Maker ("CODM").

The Company operates under the principal business segment viz. "providing long term housing finance, loans against property and refinance loans". CODM views and monitors the operating results of its single business segment for the purpose of making decisions about resource allocation and performance assessment. Accordingly, there are no separate reportable segments in accordance with the requirements of Ind AS 108 ‘Operating segment'' and hence, there are no additional disclosures to be provided other than those already provided in the consolidated financial statements. The Company''s operations are predominantly confined in India.

The Company actively manages its capital to meet regulatory norms and current and future business needs, considering the risks in its businesses, expectations of rating agencies, shareholders and investors, and the available options of raising capital. Its capital management framework is administered by the risk committee of Company. During the current year, there has been no change in objectives, policies or processes for managing capital.

The Company is subject to the capital adequacy requirements of the National Housing Bank (''NHB'') / Reserve Bank of India (''RBI''). As per the Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 dated February 17, 2021, the Company is required to maintain a minimum ratio of total capital to risk adjusted assets as determined by a specified formula, at least half of which must be Tier 1 capital, which is generally shareholders'' equity.

The Company has complied with all regulatory requirements related to regulatory capital and capital adequacy ratios as prescribed by NHB / RBI.

''The company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities.

''Below is the Capital Risk Adequacy Ratio maintained and calculated as per NHB/RBI guidelines in the respective year by the Company and as per regulatory return filed with NHB in the respective years.

34.3 Fair Value Measurements

Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value disclosure are required in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

34.3 Fair Value Measurements (Contd..)

(b) Fair value of financial instruments not measured at fair value Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Company''s financial statements. These fair values were calculated for disclosure purposes only. The below methodologies and assumptions relate only to the instruments in the above tables and, as such, may differ from the techniques and assumptions.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalents, bank balances other than cash and cash equivalents, other financial assets, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 3 except for cash and cash equivalents and bank balances other than cash and cash equivalents which have been classified as Level 1.

Loans

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, probability of default and loss given default estimates. Where such information is not available, the Company uses historical experience and other information used in its collective impairment models.

Fair values of lending portfolios are calculated using a portfolio-based approach. The Company then calculates and extrapolates the fair value to the entire portfolio, using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. The credit risk is applied as a top-side adjustment based on the collective impairment model incorporating probability of defaults and loss given defaults.

Debt securities & Borrowings other than debt securities

The fair values of Debt Securities and Borrowings other than Debt securities are estimated by discounted cash flow models that incorporate interest cost estimates considering all significant characteristics of the borrowing. They are classified as Level 3 fair values in the fair value hierarchy due to the use of unobservable inputs.

Interest rate risk is managed through ALM policy framed by the Company. The ALM policy is administered through the ALCO (Asset Liability Management Committee) which monitors the following on a monthly basis:

- Borrowing cost of the Company as on a particular date

- Interest rate scenario existing in the market

- Gap in cash flows at the prevalent interest rates

- Effect of Interest rate changes on the Gap in the cash flows

- Fixing appropriate interest rate to be charged to the customer based on the above factors Interest rate sensitivity analysis

The sensitivity analysis has been determined for borrowings where interest rates are variable, assuming the amount outstanding at the end of the reporting year was outstanding for the whole year. A 50 basis points increase or decrease in interest rates is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

34.6 Credit risk

Credit risk in the Company arises due to default by customers on their contractual obligations which results to financial losses. Credit Risk is a major risk in the Company and the Company''s asset base comprises loans for affordable housing and loans against property. Credit Risk in the Company stems from outright default due to inability or unwillingness of a customer to meet commitments in relation to lending, settlement and other financial transactions. The essence of credit risk assessment in the Company pivots around the early assessment of stress, either in a portfolio or an account, and taking appropriate measures.

34.6.1. Credit risk management

Credit risk in the Company is managed through a framework that sets out policies and procedures covering the measurement and management of credit risk. There is a clear segregation of duties between transaction originators in the business function and approvers in the credit risk function. Board approved credit policies and procedures mitigate the Company''s prime risk which is the default risk. There is a Credit Risk Management Committee in the Company for the review of the policies, process and products on an ongoing basis, with approval secured from the Board as and when required. There is a robust Credit Risk Management set-up in the Company at various levels.

1. There are Credit teams to ensure implementation of various policies and processes through random customer visits and assessment, training of branch staff on application errors, liaison with other institutions to obtain necessary information/loan closure documents, as the case may be, and highlight early warning signals and industry developments enabling pro-active field risk management.

2. The credit sanction is done through a delegation matrix where credit sanctioning powers are defined for respective levels.

3. Portfolio analysis and reporting is used to identify and manage credit quality and concentration risks.

4. Credit risk monitoring for the Company is broadly done at two levels: account level and portfolio level. Account monitoring aims to identify weak accounts at an incipient stage to facilitate corrective action. Portfolio monitoring aims towards managing risk concentration in the portfolio as well as identifying stress in certain occupations, markets and states.

34.6.2. Significant increase in credit risk

The Company monitors all financial assets that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk, the Company measures the loss allowance based on lifetime rather than Stage 1 (12-month) Expected Credit Loss (ECL). Pending the adoption of scoring models to assess the change in credit status at an account level and at portfolio level, the Company has adopted SICR (Significant Increase in Credit risk) criteria based on Days Past Due (DPD). The following table lists the staging criteria used in the Company: Staging Criterion

Stage-1: 0 up to 30 days past due

Stage-2: 31 up to 90 days past due

Stage-3: 90 and above days past due

Stage 2 follows the rebuttable presumption stated in Ind AS 109, that credit risk has increased significantly since initial recognition no later than when contractual payments are more than 30 days past due.

The Company also considers other qualitative factors and repayment history and considers guidance issued by the Institute of Chartered accountants of India (ICAI) for staging of advances to which moratorium benefit has been extended under the COVID regulatory package issued by RBI and as approved by the Board.

34.6.3. Measurement of ECL

The key inputs used for measuring ECL on term loans issued by the Company are:

Probability of default (PD): The PD is an estimate of the likelihood of default over a given time horizon (12 Month). It is estimated as at a point in time. To compute Expected Credit Loss (ECL) the portfolio is segregated into 3 stages viz. Stage 1, Stage 2 and Stage 3 on the basis of Days Past Dues. The Group uses 12 month PD for the stage 1 borrowers and lifetime PD for stage 2 and 3 to compute the ECL.

Loss given default (LGD): LGD is an estimation of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, taking into account cash flows from eligible collateral.

Exposure at default (EAD): EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date including expected drawdowns on committed facilities.

Probability of Default

To arrive at Probability of Default, ‘Vintage Analysis'' was done considering monthly defaults of borrower since origination.

The analysis considered Monthly Default Rates starting from inception until the end of observation period i.e. March 2021 to calculate default rates for each vintage month. Cumulative PD was calculated from the marginal PDs for each vintage month. Simple Average and Weighted Average PD was computed for each Month on Book (MOB) period starting from MOB 0 until MOB "n” (end of observation period). The Company has used Simple average to eliminate the bias that can be possible due to weighted average effect.

Loss Given Default

LGD was calculated using First time NPA (FTN) date and recovery data for each of these FTN dates. FTN date was taken from inception until March 2021. For each pool, recovery data was mapped to the subsequent months until March 2021 from the respective default month i.e. recovery data was retrieved and plotted against the flow of month i.e. Months on Book MOB 0, MOB 1, MOB 2, MOB 3 till MOB (n) against each default month. Considering time value of money, recoveries in each month was discounted to arrive at the value as of FTN date. Average Interest Rates charged for each disbursement year was used as the Effective Interest Rates (EIR) for the loans.

Marginal Recovery rates was computed for each month as Discounted Recovery amount for a given month divided by the total outstanding amount for the given FTN date. Cumulative recovery rates were computed for each FTN date and LGD for corresponding FTN date was computed by using the formula (1- Recovery Rate). Weighted average LGD was computed for the entire observation period, weights being the total outstanding amount for each FTN date.

Exposure at Default

EAD is the total outstanding balance at the reporting date including principal and accrued interests at the reporting date. EAD calculation for all portfolios is as under:

Stage 1 Assets:

¦ [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 2 Assets:

¦ [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Stage 3 Assets:

¦ [(The total outstanding balance drawn) (Undrawn Portion*CCF undrawn)].

Credit Conversion Factor (CCF) for undrawn portion has been taken at 100% based on historical experience and other information available with the Company.

The Company measures ECL as the product of PD , LGD and EAD estimates for its Ind AS 109 specified financial obligations. Credit Risk Concentrations

In order to manage concentration risk, the Company, considering the regulatory limits, focuses on maintaining a diversified portfolio across housing loans and loans against property. An analysis of the Company''s credit risk concentrations is provided in the following tables which represent gross carrying amounts of each class.

Although collateral can be an important mitigation of credit risk, it is the Company''s practice to lend on the basis of the customer''s ability to meet the obligations out of cash flow resources other than placing primary reliance on collateral and other credit risk enhancements.

The Company obtains first and exclusive charge on all collateral that it obtains for the loans given. The loans are secured by collateral at the time of origination. The value of the property at the time of origination will be arrived by obtaining two valuation reports from in-house valuers.

Immovable Property is the collateral for Housing and non-housing loans. Security Interest in favour of the Company is created by Mortgage through deposit of title deed which is registered wherever required by law.

The Company does not obtain any other form of credit enhancement other than the above. All the Company''s term loans are secured by way of tangible Collateral.

Any surplus remaining after settlement of outstanding debt by way of sale of collateral is returned to the customer / borrower.

34.6.6 Offsetting financial assets and financial liabilities

The Company has not recognised any financial asset or liability on a net basis.

34.6.7 Financial Guarantee

The Company has issued Corporate Guarantees of ''21,675.40 lakhs (March 31, 2020 - ''14,730.97 lakhs) to Banks and external lenders on behalf of the subsidiary - Aptus Finance India Private Limited. Based on the financial performance of the subsidiary, the Company does not expect the guarantee liability to devolve on the Company.

34.7 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the its reputation.

Exposure to liquidity risk

The Company manages and measures liquidity risk as per its ALM policy and the ALCO (Asset Liability Management Committee of the Company) is responsible for managing the liquidity risk. The Company not only measures its current liquidity position on an ongoing basis but also forecasts how liquidity position may emerge under different assumptions. The liquidity position is tracked through maturity or cash flow mismatches across buckets spanning all maturities.

34.8 Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and system or from external events. Operational risk is associated with human error, system failures and inadequate procedures and controls. It is the risk of loss arising from the potential that inadequate information system; technology failures, breaches in internal controls, fraud, unforeseen catastrophes, or other operational problems may result in unexpected losses or reputation problems. Operational risk exists in all products and business activities.

The Company recognizes that operational risk event types that have the potential to result in substantial losses includes Internal fraud, External fraud, employment practices and workplace safety, clients, products and business practices, business disruption and system failures, damage to physical assets, and finally execution, delivery and process management.

The Company cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework and by monitoring and responding to potential risks. Controls include effective segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes, such as the use of internal audit.

Note: 35 Earnings per share

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year after considering the adjustment mentioned in Note 44(i).

Diluted EPS is calculated by dividing the 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 after considering the adjustment mentioned in Note 44(i).

Excess / (Shortfall) (A-B)*_(190.92)_(136.21)

* The Company has provided for the shortfall in CSR expenditure as at March 31,2021.

(i) None of the CSR projects undertaken by the Company falls under the definition of "On-going Projects".

(ii) There is no amount required to be contributed to specified fund u/s 135 (6) by the Company.

Note: 38 Transferred financial assets that are not derecognised in their entirety

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

Note: 40 Share-based payments (Refer Note 44(iii))Employee share option plan

40.1 Details ofthe employee share option plan

(a) I n the Annual General Meeting held on August 7, 2015, the shareholders approved the issue of up to 18,00,000 options under the Scheme titled "Aptus Employees Stock Option Scheme 2015" (hereinafter referred to as Aptus ESOS, 2015).

The Schemes allow the issue of options to employees of the Company. Each option comprises one underlying equity share.

As per the Scheme, the Nomination and Remuneration Committee ("The Committee") grants the options to the employees deemed eligible and also governs the operation of the scheme.

The difference between the fair price of the the options granted on the date of grant of option and the exercise price of the option representing Stock compensation expense is expensed over the vesting period.

Note: 41 Disclosure pursuant to RBI notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 on Implementation of Indian Accounting Standards

RBI has issued Notification no. RBI/2020-21/60 DOR.NBFC (HFC).CC.No.118/03.10.136/2020-21 dated October 22, 2020 and RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 in respect of recognition of impairment on financial instruments starting from financial year 2020-21 for Housing Finance Companies. The Company has complied with the requirements of Ind AS and the guidelines and policies approved by the Board in this regard.

Any shortfall in ECL provision compared to the requirements as per IRAC norms are apportioned by the Company to Impairment Reserve at reporting periods. Such balance can be utilised / withdrawn by the Company only with prior permission of the Reserve Bank of India as per the said Circular. The shortfall in ECL provision compared to IRACP requirement as at March 31, 2021 is ''301.53 lakhs. The balance in the impairment reserve as at March 31, 2021 is ''610.36 lakhs (Refer Note 19.1 and Note 19.2.4).

The Company has lease contracts for buildings used for the branches. Leases of such assets generally have lease terms between 3 and 9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases for buildings with lease terms of 12 months or less. The Company applies the ‘shortterm lease'' recognition exemptions for these leases.

Set out below are the carrying amounts of lease liabilities included under financial liabilities and the movements during the year:

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

Note: 44 Events after reporting period

(i) The Board of Directors of the Company in its meeting held on May 05, 2021 and shareholders in the Extraordinary General Meeting held on May 06, 2021 approved the sub-division of shares from ''10 per share to ''2 per share. The number of shares used for the calculation of earnings per share, and the earnings per share in Note 35 (including that in the comparative year), have been adjusted for pursuant to Paragraph 64 of Ind AS 33 - "Earnings Per Share", prescribed under Section 133 of the Companies Act, 2013. No other adjustments are made in the Standalone Financial Statements on account of the share split.

(ii) The Board of Directors of the Company in its meeting held on May 05, 2021 has made the first and final call of ''525.03 per share on the 15,00,000 equity shares allotted to Mr. M Anandan, Chairman and Managing Director. No adjustments are made in the Standalone Financial Statements for these calls made by the Company.

(iii) The Board of Directors of the Company in its meeting held on November 12, 2020 approved the Aptus Employee Stock Option Scheme, 2021 ("ESOS 2021") with such number of options which shall not exceed 1,00,00,000 options. The shareholders in the Extraordinary General Meeting held on May 06, 2021 approved the ESOS 2021 with such number of options which shall not exceed 1,00,00,000 options. No adjustments are made in the Standalone Financial Statements on account of this proposed new ESOP Scheme.

(iv) Based on the approval of the Board of Directors of the Company in their meeting held on May 12, 2021, the Company has filed the draft red herring prospectus dated May 14, 2021 with the Securities and Exchange Board of India, pursuant to Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended in connection with the initial public offering of equity shares of ''2 each of the Company and offer for sale by the selling shareholders of the Company.

Note: 45 Disclosure as required by National Housing Bank

The following disclosures have been given in terms of National Housing Bank''s notification no. NHB.HFC.CG-DIR.1/MD&CEO/2016 dated February 9, 2017 and in terms of the circular no. NHB/ND/DRS/PoJ-No.35/2010-11 dated October 11, 2010. Further, the disclosures which are for regulatory and supervisory purpose, have been made so as to comply with NHB''s Policy Circular No. NHB(ND)/DRS/PoJicy Circular No. 89/2017-18 dated June 14, 2018 which requires Housing Finance Companies to continue to follow the extant provisions of National Housing Bank Act, 1987 and Housing Finance Companies (NHB) Directions 2010 including framework on prudential norms and other related circulars issued in this regards by NHB from time to time and the same have been compiled by the Management in accordance with Accounting Standards prescribed under section 133 of the Companies Act, read with the Companies (Accounting Standards) Rules, 2006, as amended (Indian GAAP) and relied upon by the auditors.

B. Exposure to Capital Market : Nil

C. Details of financing of Parent Company products:

These details are not applicable since the Company is not a subsidiary of any company.

D. Details of Single Borrower Limit (SGL)/ Group Borrower Limit (GBL) exceeded by the HFC:

The Company has not exceeded Single Borrower Limit (SGL) / Group Borrower Limit (GBL) during the financial year ended March 31,2021.

E. Unsecured Advances: Nil

F. Exposure to group companies engaged in real estate business: Nil

45.10 Disclosure of Penalties imposed by NHB and other regulators

(i) An amount of ''5,000, including GST (March 31, 2020: Nil) has been levied by National Housing Bank for contravention of Section 29C(1) of the National Housing Bank Act, 1987. Also, an amount of ''5,000, including GST (March 31, 2020: Nil) has been levied by National Housing Bank for non-compliance with respect to the provisions of Para 28 of the Housing Finance Companies (NHB) Directions, 2010.

(ii) The Company has not received any adverse comments in writing by NHB or other Regulators on regulatory compliances, with a specific communication to disclose the same to the public.

45.11 Related party transactions

Details of the related parties, nature of the relationship with whom Company has entered transactions, remuneration of directors and balances in related party account at the year end, are given in Note no. 33. There were no material transaction with related parties and all these transactions with related parties were carried out in ordinary course of business at arm''s length price.

45.12 Group Structure

The Company has only one wholly owned subsidiary - Aptus Finance India Private Limited. There are no other entities in the group.

45.14 Net Profit or Loss for the period, prior period items and changes in accounting policies

During the year,

(a) no prior period items occurred which has impact on Statement of Profit and loss,

(b) no change in Accounting policy,

(c) there is no withdrawal from reserve fund.

45.15 Revenue Recognition

There are no circumstances in which revenue recognition has been postponed by the Company pending the resolution of significant uncertainties.

45.16 Consolidated Financial Statements (CFS)

The Company has a wholly owned Subsidiary and the Consolidated financial statements is prepared in accordance with Ind AS 110.

45.27 Disclosure on frauds pursuant to Master Direction - Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016

There were no instances of fraud reported during the years ended March 31,2021 and March 31, 2020.

45.28 Percentage of outstanding loans granted against the collateral of gold jewellery to their outstanding total assets - Nil (March 31,2020: Nil)

45.29 Details on Principal Business Criteria

Principal Business Criteria for the Company to be classified as "Housing Finance Company" as per the Paragraph 4.1.17 of Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021, RBI/2020-21/73 DOR.FIN.HFCCCNo.120/03.rn136/2020-21, February 17, 2021 is given below:

Note: The amortised costs of housing finance assets and individual housing finance assets amounting to ''2,06,848.94 lakhs is measured using effective interest rate method which required netting off of deferred processing fees and sourcing costs from gross housing finance assets and individual housing finance assets amounting to ''3,566.63 lakhs as at March 31,2021.

(f) Institutional set-up for liquidity risk management

The Board of Directors of the Company have adopted a Risk Management Policy. The Board adopted policy contains the framework and guidelines for Risk management. The changes brought in the Liquidity Risk Management Framework vide its Circular No. RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 November 04, 2019 are also being covered as part of the Risk Management Policy which will be reviewed by the Board periodically for compliance and implementation.

The Board shall have the overall responsibility for management of liquidity risk by reviewing the implementation of the Risk Management Policy. The Company has also constituted Risk Management Committee and Asset-Liability Management Committee (ALCO) to carry out the functions as listed out in the said circular.

45.31 Moratorium

Pursuant to the Reserve Bank of India circulars dated March 27, 2020 and May 23, 2020 ("RBI circular”) allowing lending institutions to offer moratorium to borrowers on payment of installments, the Company has extended moratorium to its borrowers in accordance with its Board approved policy. The disclosures in relation to asset classification and its related provisioning as required by RBI Circular DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020, is as below:

45.32 Disclosure on one - time restructuring for the year ended March 31, 2021 pursuant to RBI notification RBI/2020- 21/16/DOR.NO.BP.BC/3/21.04.048/2020-21 dated August 6, 2020

No assets have been restructured during the year ended March 31, 2021.

Note: 46 Comparatives

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / presentation.