Notes to Accounts of Indostar Capital Finance Ltd.

Mar 31, 2025

m) Provisions

A provision is recognised when the Company
has a present obligation as a result of past
event; it is probable that outflow of resources
will be required to settle the obligation, in
respect of which a reliable estimate can be
made. Provisions are not discounted to its
present value and are determined based
on best estimate required to settle the
obligation at the balance sheet date. These
are reviewed at each balance sheet date
and adjusted to reflect the current best
estimates.

n) Taxes

(i) Current tax

Current tax assets and liabilities for the
current and prior years are measured at
the amount expected to be recovered
from, or paid to, the taxation authorities.
The tax rates and tax laws used to
compute the amount are those that
are enacted, or substantively enacted,
by the reporting date in the countries
where the Company operates and
generates taxable income.

Current income tax relating to items
recognised outside profit or loss
is recognised outside profit or loss
(either in other comprehensive income
or in equity). Current tax items are
recognised in correlation to the
underlying transaction either in OCI
or directly in equity. Management
periodically evaluates positions taken in
the tax returns with respect to situations
in which applicable tax regulations are

subject to interpretation and establishes
provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided on temporary
differences at the reporting date
between the tax bases of assets and
liabilities and their carrying amounts for
financial reporting purposes.

Deferred tax assets are recognised for
all deductible temporary differences,
the carry forward of unused tax credits
and any unused tax losses. Deferred
tax assets are recognised to the extent
that it is probable that taxable profit
will be available against which the
deductible temporary differences, and
the carry forward of unused tax credits
and unused tax losses can be utilised,
except:

The carrying amount of deferred tax
assets is reviewed at each reporting
date and reduced to the extent that
it is no longer probable that sufficient
taxable profit will be available to allow
all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting
date and are recognised to the extent
that it has become probable that future
taxable profits will allow the deferred
tax asset to be recovered.

Deferred tax assets and liabilities are
measured at the tax rates that are
expected to apply in the year when the
asset is realised or the liability is settled,
based on tax rates (and tax laws) that
have been enacted or substantively
enacted at the reporting date.

Deferred tax relating to items
recognised outside profit or loss
is recognised outside profit or loss
(either in other comprehensive income
or in equity). Deferred tax items
are recognised in correlation to the
underlying transaction either in OCI or
directly in equity.

Deferred tax assets and deferred
tax liabilities are offset if a legally
enforceable right exists to set off
current tax assets against current tax

liabilities and the deferred taxes relate
to the same taxable entity and the same
taxation authority.

(iii) Indirect tax

Expenses and assets are recognised
net of the Goods and Services Tax
paid, except when the tax incurred on
a purchase of assets or services is not
recoverable from the taxation authority,
in which case the tax paid is recognised
as part of the cost of acquisition of
the asset or as part of the respective
expense item, as applicable.

o) Earnings Per Share

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

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

p) Contingent Liabilities

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

q) Segment reporting

Operating segments are those components
of the business whose operating results are
regularly reviewed by the chief operating
decision making body in the Company to
make decisions for performance assessment
and resource allocation.

The reporting of segment information is the
same as provided to the management for
the purpose of the performance assessment
and resource allocation to the segments.

Segment accounting policies are in line with
the accounting policies of the Company. In
addition, the following specific accounting
policies have been followed for segment
reporting:

i) Segment revenue includes operational
revenue directly identifiable with/
allocable to the segment.

ii) Expenses that are directly identifiable
with/allocable to segments are
considered for determining the
segment result.

iii) Income which relates to the Company as
a whole and not allocable to segments
is included in âunallocable corporate
income / (expenditure) (net)â.

iv) Segment result includes the finance
costs incurred on interest bearing
advances with corresponding credit
included in âunallocable corporate
income/(expenditure)(net)â.

v) Segment assets and liabilities include
those directly identifiable with the
respective segments. Unallocable
corporate assets and liabilities represent
the assets and liabilities that relate to
the Company as a whole.

r) Cash and cash equivalents

Cash and cash equivalent in the balance
sheet and for the purpose of statement
of cash flows comprise cash at bank and
cheques in hand and short-term deposits
with an original maturity of three months
or less, which are subject to an insignificant
risk of changes in value. They are held for
the purposes of meeting short-term cash
commitments (rather than for investment or
other purposes).

s) Non-current assets held for sale:

Non-current assets and disposable
groups are classified as held for sale if
their carrying amount is intended to be
recovered principally through a sale (rather
than through continuing use) when the
asset (or disposal Company) is available
for immediate sale in its present condition
subject only to terms that are usual and
customary for sale of such asset (or disposal
Company) and the sale is highly probable
and is expected to qualify for recognition
as a completed sale within one year from
the date of classification except in some
circumstances this period can be extended
if it is beyond the control of management
and there are sufficient evidence that the
entity remains committed to its plan to sell
the asset.

Non-current assets and disposal groups
classified as held for sale are measured at
lower of their carrying amount and fair value
less costs to sell.

2.4 Significant accounting judgements, estimates
and assumptions

property, plant and equipment & intangible
assets, allowance for expected credit losses,
fair value measurement, business projections
for impairment assessment of goodwill etc.
Difference, if any, between the actual results and
estimates is recognised in the period in which
the results are known.

2.5 Securities premium account

a) Securities premium includes:

- The difference between the face value of
the equity shares and the consideration
received in respect of shares issued;

- The fair value of the stock options
which are treated as expense, if any, in
respect of shares allotted pursuant to
Stock Options Scheme.

b) The issue expenses of securities which
qualify as equity instruments are written
off against securities premium account/
retained earning in accordance with Ind AS.

2.6 Recent accounting pronouncements

Ministry of Corporate Affairs (âMCAâ) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
For the year ended March 31, 2025, MCA has
notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to
sale and leaseback transactions, applicable to
the Company w.e.f. April 01, 2024. The Company
has reviewed the new pronouncements and
based on its evaluation has determined that
it does not have any significant impact in its
financial statements.

22.2Nature and purpose of reserves
Capital Reserve

Capital reserve comprises of the amount received on shares forfeited by the Company on non-payment of
call money.

Statutory reserves u/s 45-IC of The RBI Act, 1934

Statutory reserves fund is required to be created by a Non-Banking Financial Company as per Section 45-
IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with
authorisation of Reserve Bank of India.

Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised in accordance with
the provision of the Companies Act, 2013.

Share options outstanding account

The shares options outstanding account is used to recognise the grant date fair value of equity settled
options issued to employees under stock option schemes of the Company.

Retained earnings

Retained earnings represents surplus of accumulated earnings of the Company and which are available for
distribution to shareholders.

General reserve

General reserve represents transfer of fair value of options granted to employees from ESOP Reserve to
General Reserve on lapse/forfeiture of vested options by employees.

Debt instruments through other comprehensive income

It includes gain/(loss) on fair valuation of investment in treasuy bills
Share application money pending allotment

It represents money received on exercise of vested options by the employees pending allotment of shares.
The shares have been alloted subsequent to March 31, 2025

Money received against share warrant

The Board of Directors at its meeting held on February 27, 2024 approved issuance of 2,48,18,888 warrants
of the Company to BCP V Multiple Holdings PTE Limited (the âHolding Companyâ) and Florintree Tecserv
LLP, each convertible into, or exchangeable for, 1 fully paid-up equity share of the Company of face value
of '' 10 by way of a preferential issue on a private placement basis at a issue price of '' 184 per equity
share, in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2018 (âSEBI ICDR Regulationsâ), the Companies Act, 2013 (âActâ),
as amended and other applicable laws, and subject to the approval of regulatory/ statutory authorities and
the shareholders of the Company (the âPreferential Issueâ).

The Preferential Issue has subsequently been approved by the Shareholders at the Extra-Ordinary General
Meeting of the Members held on March 22, 2024.

During the year, the Board of Directors of the Company vide its Circular Resolution passed on May 26, 2024,
approved the allotment of 1,08,69,565 warrants of the Company on a preferential basis by way of a private
placement, to Florintree Tecserv LLP. The Company received consideration of '' 5,000 lakhs on the date of
allotment.

The Board of Directors at its meeting held on October 18, 2024 approved change in subscription amount
to be received from BCP V Multiple Holdings PTE Limited (the âHolding Companyâ) at the time of the
subscription of the warrants from 25% to 80%.

The Company received requisite approvals for issue of warrants to the Holding Company. Accordingly, the
Board of Directors of the Company vide its Circular Resolution passed on November 26, 2024, approved the
allotment of 1,39,49,323 warrants of the Company on a preferential basis by way of a private placement, to
the Holding Company. The Company received consideration of '' 20,533.40 lakhs on the date of allotment.

NOTE 32 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

A. Accounting classification and fair values

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date under current market
conditions, regardless of whether that price is directly observable or estimated using a valuation technique.
The management has assessed that the carrying amounts of cash and cash equivalents, loans carried at
amortised cost, other financial assets, trade payables, borrowings, bank/book overdrafts and other financial
liabilities are a reasonable approximation to their fair value.

B. Risk Management Framework:

The Company''s risk management framework is based on

(a) Clear understanding and identification of various risks

(b) Disciplined risk assessment by evaluating the probability and impact of each risk

(d) Adequate review mechanism to monitor and control risks.

The Company''s risk management division works as a value centre by constantly engaging with the business
providing reports based on key analysis and insights. The key risks faced by the Company are credit risk,
liquidity risk, interest rate risk, operational risk, reputational and regulatory risk, which are broadly classified
as credit risk, market risk and operational risk. The Company has a an established risk reporting and
monitoring framework. The Company identifies and monitors risks periodically. This Process enables the
Company to reassess all the critical risks in a changing environment that need to be focused on.

C. Risk governance structure:

established to identify and analyse the risks faced by the Company, to set appropriate limits and controls
and to monitor risks and adherence to limits. The RMC reviews the risk management policies regularly to
reflect the changes in market conditions and Company''s activities.

The Audit Committee oversees how management monitors compliance with risk management policies and
procedures and reviews the adequacy of risk management framework in relation to the risk faced by the
Company.

The risk management committee has established a comprehensive risk management framework across
the business and provides appropriate reports on risk exposures and analysis in its pursuit of creating
awareness across the Company about risk management.

D. Fair value hierarchy

Ind AS 107, ''Financial Instrument - Disclosure'' requires classification of the valuation method of financial
instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which
reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to
un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy
under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximise the use of observable market data and place limited reliance on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument
is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level.

E. Credit risk

Credit risk arises when a borrower is unable to meet his contractual obligations to the lender. The effective
management of credit risk requires the establishment of appropriate credit risk policies and processes.
The Company has comprehensive and well defined credit policies across various businesses, products and
segments, which encompass credit approval process for all businesses along with guidelines for mitigating
the risks associated with them. The appraisal process includes detailed risk assessment of the borrowers,
physical verifications and field visits. The Company has a well-defined post sanction monitoring process to
identify portfolio-wise credit risk trends and early warning signals. This enables it to implement necessary
changes to the credit policy, whenever the need arises to prevent any further slippage in the credit quality.

Grouping financial assets measured on a collective basis

The Company splits its exposure into smaller homogeneous portfolios, based on shared credit risk
characteristics, as described below in the following order:

- Customer i.e. corporate and retail

- Nature of product i.e. commercial vehicle, corporate lending, SME and Micro lap
Significant increase in credit risk

The credit risk on a financial asset of the Company are assumed to have increased significantly since
initial recognition when contractual payments are more than 30 days past due. The retail loans where the
renegotiated terms are not substantially different and involve repayment terms to be extended including
interest or the EMI amount readjusted over the tenure are classified as Stage 2. In case of corporate loan the
assessment of significant increase in credit risk is performed on a case to case basis. Additionally, accounts
identified and reviewed by the credit committee for labelling as breaching pre-defined critical credit risk
parameters will also be classified as Stage 2. Accordingly, the financial assets shall be classified as Stage 2,
based on the quantitative as well as qualitative factors.

Write off !

The Company writes off a financial asset when there is information indicating that the counterparty is in ;
severe financial difficulty and there is no realistic prospect of recovery. Financial assets written off may still :
be subject to enforcement activities under the Company''s recovery procedures, taking into account legal Â¦
advice where appropriate. Any recoveries made are recognised in Statement of profit and loss. ,

Restructured financial assets ;

A loan where repayment terms are renegotiated on substantially different terms as compared to the original
contracted terms due to significant increase in credit risk of the borrower are classified as stage 2. Such
loans continue to be in stage 2 until they exhibit regular payment of renegotiated principal and interest over
a minimum observation period typically 12 months-post renegotiation, and there are no other indicators
of impairment. Having satisfied the conditions of timely payment over the observation period these loans
could be transferred to stage 1 or 2 and a fresh assessment of the risk of default is done.

Overview of the Expected Credit Loss principles

The Company records allowance for expected credit losses for all loans, debt financial assets not held at
FVTPL, undrawn loan commitments (referred to as ''financial instruments'').

For the computation of ECL on the financial instruments, the Company categories its financial instruments
as mentioned below:

Stage 1: All exposures where there has not been a significant increase in credit risk since initial recognition
or that has low credit risk at the reporting date and that are not credit impaired upon origination are
classified under this stage. The Company classifies all advances upto 30 days overdue under this category.

Stage 2: Exposures are classified as Stage 2 when the amount is due for more than 30 days but less than
90 days. All exposures where there has been a significant increase in credit risk since initial recognition but
are not credit impaired are classified under this stage.

Stage 3: All exposures are assessed as credit impaired when one or more events that have a detrimental
impact on the estimated future cash flows of that asset have occurred. Exposures where the amount remains
due for 90 days or more are considered as to be stage 3 assets.

The Company has established a policy to perform an assessment, at the end of each reporting period, of
whether a financial instrument''s credit risk has increased significantly since initial recognition, by considering
the change in the risk of default occurring over the remaining life of the financial instrument. The Company
undertakes the classification of exposures within the aforesaid stages at borrower level.

Definition of default

A default on a financial asset is when the counterparty fails to make the contractual payments within 90
days of when they fall due. Accordingly, the financial assets shall be classified as Stage 3, if on the reporting
date, it has been 90 days and above past due. Non-payment on another obligation of the same customer
is also considered as a Stage 3. In addition, Company shall also classify those accounts as default which
meets the criteria as per the RBI circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 dated
November 12, 2021.

The calculation of ECL

ECL is a probability weighted credit losses (i.e. present value of all cash shortfalls) over the expected life of
the financial instruments. Cash shortfalls are the difference between the cash flows that the entity is entitled
to receive on account of contract and the cash flows that the entity expects to receive.

The mechanics of the ECL calculations are outlined below and the key elements are as follows:

Portfolio Segmentation:

For ECL purpose, the loan portfolio is broadly segmented as below :

1) Corporate lending

2) Small and medium enterprises lending (''SME'')

3) Commercial vehicle lending

4) Micro lap

Exposure-At-Default (EAD) : The Exposure at Default is the amount the Company is entitled to receive as
on reporting date including repayments due for principal and interest, whether scheduled by contract or
otherwise, expected drawdowns on committed facilities.

Probability of Default (PD) : The Probability of Default is an estimate of the likelihood of default of the
exposure over a given time horizon. A default may only happen at a certain time over the assessed period,
if the facility has not been previously derecognised and is still in the portfolio.

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

The ECL allowance is applied on the financial instruments depending upon the classification of the financial
instruments as per the credit risk involved. ECL allowance is computed on the below mentioned basis:

12-month ECL: 12-month ECL is the portion of Lifetime ECL that represents the ECL that results from
default events on a financial instrument that are possible within the 12 months after the reporting date.
12-month ECL is applied on stage 1 assets.

Lifetime ECL: Lifetime ECL for credit losses expected to arise over the life of the asset in cases of credit
impaired loans and in case of financial instruments where there has been significant increase in credit
risk since origination. Lifetime ECL is the expected credit loss resulting from all possible default events
over the expected life of a financial instrument. Lifetime ECL is applied on stage 2 and stage 3 assets. The
Company computes the ECL allowance either on individual basis or on collective basis, depending on the
nature of the underlying portfolio of financial instruments. The Company has grouped its loan portfolio into
Corporate loans, SME loans, Commercial vehicle loans and Micro lap.

Forward looking information

The Company employs statistical models to analyse the data collected and generate estimates of the
remaining lifetime PD of exposures and how these are expected to change as a result of the passage of time.
Such statistical models are selected considering the availability of information related to the probability of
default for each product. This analysis includes the identification and calibration of relationships between
changes in GNPA as proxy for default rates and changes in key macro-economic factors. Key economic
indicators considered for forward looking includes:

â¢ Gross national income growth

â¢ Inflation % change over previous year

For the purpose of determination of impact of forward looking information, the Company applies macro
economic (ME) variables as stated above to each product and assess the trend of the historical probability
of defaults as compared to the forecasted probability of default. Based on the directional trend of output,
management applies an overlay if required. Overtime, new ME variable may emerge to have a better
correlation and may replace ME being used now.

F. Liquidity risk

Liquidity is the Company''s capacity to fund increase in assets and meet both the expected and unexpected
obligations without incurring unacceptable losses. Liquidity risk is the inability to meet such obligations
as they become due without adversely affecting the Company''s financial conditions. The Asset Liability
Management Policy of the Company stipulates a broad framework for Liquidity risk management to ensure
that the Company can meet its liquidity obligations. The Asset Liability Management Committee (''ALCO'')
monitors composition, characteristics and diversification of funding sources to ensure there is no over
reliance on single source of funding. The Company tracks the cash flow mismatches for measuring and
managing net funding requirement and reviews short-term liquidity profiles based on business projections
and other commitments for planning purposes through Liquidity analysis. The ALCO also reviews the
individual mismatch in each time bucket and cumulative mismatch and ensures the bucket wise limits are
not breached.

The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily
liquidated in the event of an unforeseen interruption in cash flow. The liquidity position of the Company is
assessed under a variety of scenarios giving due consideration to stress factors relating to both the market
in general and risk specifics to the Company. Basis the liquidity position assessed under various stress
scenarios; the Company reviews the following to effectively handle any liquidity crisis:

â¢ Adequacy of contingency funding plan in terms of depth of various funding sources, time to activate,
cost of borrowing, etc

â¢ Availability of unencumbered eligible assets

G. Market risk

Market Risk is the possibility of loss arising from changes in the value of a financial instrument as a result of
changes in market variables such as interest rates, exchange rates and other asset prices. The Company''s
exposure to market risk is a function of asset liability management and interest rate sensitivity assessment.
The Company is exposed to interest rate risk and liquidity risk, if the same is not managed properly. The
Company continuously monitors these risks and manages them through appropriate risk limits. The Asset
Liability Management Committee (''ALCO'') reviews market related trends and risks and adopts various
strategies related to assets and liabilities, in line with the Company''s risk management framework.

H. Operational risk

To manage fraud risk effectively, the Company has Independent Risk Containment Unit (''RCU'') which
is responsible for implementing fraud risk management framework and ensure compliance. The RCU
undertakes various activities such as pre-sanction loan applicant verification, pre-sanction and post
disbursement documents verification, vendor verification, etc to prevent and manage frauds.

I. Capital Disclosure

The Company maintains adequate capital to cover risks inherent in the business and is meeting the capital
adequacy requirements of our regulator, Reserve Bank of India (''RBI''). The adequacy of the Company''s
capital is monitored using, among other measures, the regulations issued by RBI.

The Company has complied in full with all its externally imposed capital requirements over the reported
period.

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

The Company maintains its capital structure in line with economic conditions and the risk characteristics
of its activities. The Company has adopted a dividend distribution policy and the Board reviews the capital
position on a regular basis.

NOTE 42 OTHER NOTES
Note 42.1

In relation to the loans portfolio, the Management has on a best effort basis and knowledge, has identified
transactions with Nil financiers (previous year Nil) aggregating '' Nil (previous year Nil) used for refinancing
loans of the customers.

Note 42.2

The disclosure on the following matters required under Schedule III as amended not being relevant or applicable
in case of the Company, same are not covered:

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 Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) and rules made thereunder.

c) The Company has not been declared wilful defaulter by any bank or financial institution or government or
any government authority.

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

e) Charges or satisfaction to be registered with Registrar of Companies (ROC) have been registered within the
stipulated statutory timelines.

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) In respect of the disclosure required vide notification dated March 24, 21 issued by Ministry of Corporate
Affairs, the Company has taken steps to identify transactions with the struck-off companies and considering
the nature of business which is primarily lending to individuals and other small players, there are no such
transactions which may be required to be reported.

h) The provision related to number of layers as prescribed under section 2(87) of the Companies Act read with
Companies (Restriction on number of Layers) Rules, 2017 is not applicable to Company.

i) Other than the loans and advances given in normal course of business, no funds have been advanced or
loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds)
by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ) with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party
identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has also not received any
fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or
indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

j) Title deed of immovable property has been held in the name of the Company

k) The Company has used seven accounting software, for maintaining its books of account (including two
accounting software managed and maintained by a third-party software service provider) which has a
feature of recording audit trail (edit log) facility, except that no audit trail feature was enabled at database
level in respect of Four accounting software and in case of one accounting software, the audit trail feature
at the database level was enabled with effect from July 01, 2024 to log any direct data changes.

Further, to the extent enabled, audit trail feature has operated throughout the year for all relevant transactions
recorded in the accounting software. Also, we did not come across any instance of audit trail feature being
tampered with. Additionally, the audit trail of previous year has been preserved by the Company as per
the statutory requirements for record retention to the extent it was enabled and recorded in previous year.

The Company has established and maintained an adequate internal control framework and based on its
assessment, believes that this was effective throughout the year.

Note: NPA represent Stage 3 loan assets and classified as Stage 3 as per Ind AS 109

NOTE 47 The Company does not have any unhedged foreign currency exposure for the year ended March 31,
2025

NOTE 48 Figures for the previous year have been regrouped, and / or reclassified wherever considered necessary
to make them comparable to the current year presentation.

In terms of our report attached For and on behalf of the Board of Directors of

For M S K A & Associates IndoStar Capital Finance Limited

Chartered Accountants

ICAI Firm Registration Number:105047W

Tushar Kurani Naina Krishnamoorthy Randhir Singh Karthikeyan Srinivasan

Partner Non-Executive Independent Executive Vice Chairman Chief Executive Officer &

Membership No. 118580 Chairperson & Whole Time Director Whole Time Director

DIN: 01216114 DIN: 05353131 DIN: 10056556

Jayesh Jain Shikha Jain

Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: April 29, 2025 Date: April 29, 2025

m) Provisions

n) Taxes

(i) Current tax

subject to interpretation and establishes
provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided on temporary
differences at the reporting date
between the tax bases of assets and
liabilities and their carrying amounts for
financial reporting purposes.

Deferred tax assets and deferred
tax liabilities are offset if a legally
enforceable right exists to set off
current tax assets against current tax

liabilities and the deferred taxes relate
to the same taxable entity and the same
taxation authority.

(iii) Indirect tax

o) Earnings Per Share

p) Contingent Liabilities

q) Segment reporting

The reporting of segment information is the
same as provided to the management for
the purpose of the performance assessment
and resource allocation to the segments.

Segment accounting policies are in line with
the accounting policies of the Company. In
addition, the following specific accounting
policies have been followed for segment
reporting:

i) Segment revenue includes operational
revenue directly identifiable with/
allocable to the segment.

ii) Expenses that are directly identifiable
with/allocable to segments are
considered for determining the
segment result.

iii) Income which relates to the Company as
a whole and not allocable to segments
is included in âunallocable corporate
income / (expenditure) (net)â.

iv) Segment result includes the finance
costs incurred on interest bearing
advances with corresponding credit
included in âunallocable corporate
income/(expenditure)(net)â.

r) Cash and cash equivalents

s) Non-current assets held for sale:

Non-current assets and disposal groups
classified as held for sale are measured at
lower of their carrying amount and fair value
less costs to sell.

2.4 Significant accounting judgements, estimates
and assumptions

2.5 Securities premium account

a) Securities premium includes:

- The difference between the face value of
the equity shares and the consideration
received in respect of shares issued;

- The fair value of the stock options
which are treated as expense, if any, in
respect of shares allotted pursuant to
Stock Options Scheme.

b) The issue expenses of securities which
qualify as equity instruments are written
off against securities premium account/
retained earning in accordance with Ind AS.

2.6 Recent accounting pronouncements

22.2Nature and purpose of reserves
Capital Reserve

Capital reserve comprises of the amount received on shares forfeited by the Company on non-payment of
call money.

Statutory reserves u/s 45-IC of The RBI Act, 1934

Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised in accordance with
the provision of the Companies Act, 2013.

Share options outstanding account

The shares options outstanding account is used to recognise the grant date fair value of equity settled
options issued to employees under stock option schemes of the Company.

Retained earnings

Retained earnings represents surplus of accumulated earnings of the Company and which are available for
distribution to shareholders.

General reserve

General reserve represents transfer of fair value of options granted to employees from ESOP Reserve to
General Reserve on lapse/forfeiture of vested options by employees.

Debt instruments through other comprehensive income

It includes gain/(loss) on fair valuation of investment in treasuy bills
Share application money pending allotment

It represents money received on exercise of vested options by the employees pending allotment of shares.
The shares have been alloted subsequent to March 31, 2025

Money received against share warrant

The Preferential Issue has subsequently been approved by the Shareholders at the Extra-Ordinary General
Meeting of the Members held on March 22, 2024.

NOTE 32 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

A. Accounting classification and fair values

B. Risk Management Framework:

The Company''s risk management framework is based on

(a) Clear understanding and identification of various risks

(b) Disciplined risk assessment by evaluating the probability and impact of each risk

(d) Adequate review mechanism to monitor and control risks.

The Comp

Mar 31, 2024

m) Provisions

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

n) Taxes

(i) Current tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, by the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided on temporary differences at the reporting date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(iii) Indirect tax

Expenses and assets are recognized net of the Goods and Services Tax

paid, except when the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the tax paid is recognized as part of the cost of acquisition of the asset or as part of the respective expense item, as applicable.

o) Earnings Per Share

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

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

p) Contingent Liabilities

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

q) Segment reporting

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to

make decisions for performance assessment and resource allocation.

The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments.

Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting:

i) Segment revenue includes operational revenue directly identifiable with/ allocable to the segment.

ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result.

iii) Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income / (expenditure) (net)â.

iv) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "unallocable corporate income/ (expenditure)(net)â.

v) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole.

r) Cash and cash equivalents

risk of changes in value. They are held for the purposes of meeting short-term cash commitments (rather than for investment or other purposes).

2.4 Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for expected credit losses, fair value measurement, business projections for impairment assessment of goodwill etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.

2.5 Securities premium account

a) Securities premium includes:

- The difference between the face value of the equity shares and the consideration received in respect of shares issued;

- The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme.

b) The issue expenses of securities which qualify as equity instruments are written off against securities premium account/ retained earning in accordance with Ind AS.

2.6 Recent accounting pronouncements

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

21.2 Nature and purpose of reserves Capital Reserve

Capital reserve comprises of the amount received on shares forfeited by the Company on non-payment of call money.

Statutory reserves u/s 45-IC of The RBI Act, 1934

Statutory reserves fund is required to be created by a Non-Banking Financial Company as per Section 45-IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of Reserve Bank of India.

Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised in accordance with the provision of the Companies Act, 2013.

Share options outstanding account

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under stock option schemes of the Company.

Retained earnings

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

General reserve

General reserve represents transfer of fair value of options granted to employees from ESOP Reserve to General Reserve on lapse/forfeiture of vested options by employees.

Debt instruments through other comprehensive income

It includes gain/(loss) on fair valuation of investment in treasuy bills

Note 31

Financial instruments - Fair values and Risk management

A. Accounting classification and fair values

The management has assessed that the carrying amounts of cash and cash equivalents, loans carried at amortised cost, other financial assets, trade payables, borrowings, bank/book overdrafts and other financial liabilities are a reasonable approximation to their fair value.

B. Risk Management Framework:

The Company''s risk management framework is based on

(a) Clear understanding and identification of various risks

(b) Disciplined risk assessment by evaluating the probability and impact of each risk

(d) Adequate review mechanism to monitor and control risks.

and monitoring framework. The Company identifies and monitors risks periodically. This Process enables the company to reassess all the critical risks in a changing environment that need to be focused on.

C. Risk governance structure:

The Company''s risk governance structure operates with a well-defined Board and Risk Management Committee (''RMC'') with a clearly laid down charter and roles and responsibilities. The Board oversees the risk management process and monitors the risk profile of the Company directly as well as through a Board constituted Risk Management Committee. The Committee reviews the risk management policy, implementation of risk management framework, monitoring of critical risks, review and approval of exposures with conflict of interest and review of various other initiatives. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate limits and controls and to monitor risks and adherence to limits. The RMC reviews the risk management policies regularly to reflect the changes in market conditions and Company''s activities.

The Audit Committee oversees how management monitors compliance with risk management policies and procedures and reviews the adequacy of risk management framework in relation to the risk faced by the Company.

The risk management committee has established a comprehensive risk management framework across the business and provides appropriate reports on risk exposures and analysis in its pursuit of creating awareness across the Company about risk management.

D. Fair value hierarchy

Ind AS 107, ''Financial Instrument - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

E. Credit risk

Credit risk arises when a borrower is unable to meet his contractual obligations to the lender. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The Company has comprehensive and well defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. The appraisal process includes detailed risk assessment of the borrowers, physical verifications and field visits. The company has a well-defined post sanction monitoring process to identify portfolio-wise credit risk trends and early warning signals. This enables it to implement necessary changes to the credit policy, whenever the need arises to prevent any further slippage in the credit quality.

Grouping financial assets measured on a collective basis

The company splits its exposure into smaller homogeneous portfolios, based on shared credit risk characteristics, as described below in the following order:

- Customer i.e. corporate and retail

- Nature of product i.e. commercial vehicle, corporate lending and SME

Significant increase in credit risk

The credit risk on a financial asset of the Company are assumed to have increased significantly since initial recognition when contractual payments are more than 30 days past due. The retail loans where the renegotiated terms are not substantially different and involve repayment terms to be extended including interest or the EMI amount readjusted over the tenure are classified as Stage 2. In case of corporate loan the assessment of significant increase in credit risk is performed on a case to case basis. Additionally, accounts identified and reviewed by the credit committee for labelling as breaching pre-defined critical credit risk parameters will also be classified as Stage 2. Accordingly, the financial assets shall be classified as Stage 2, based on the quantitative as well as qualitative factors.

Write off

The Company writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery. Financial assets written off may still be subject to enforcement activities under the Company''s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in Statement of profit and loss.

Restructured financial assets

A loan where repayment terms are renegotiated on substantially different terms as compared to the original contracted terms due to significant increase in credit risk of the borrower are classified as stage 2. Such loans continue to be in stage 2 until they exhibit regular payment of renegotiated principal and interest over a minimum observation period typically 12 months-post renegotiation, and there are no other indicators of impairment. Having satisfied the conditions of timely payment over the observation period these loans could be transferred to stage 1 or 2 and a fresh assessment of the risk of default is done.

Overview of the Expected Credit Loss principles

The Company records allowance for expected credit losses for all loans, debt financial assets not held at FVTPL, undrawn loan commitments (referred to as ''financial instruments'').

For the computation of ECL on the financial instruments, the Company categories its financial instruments as mentioned below:

Stage 1: All exposures where there has not been a significant increase in credit risk since initial recognition or that has low credit risk at the reporting date and that are not credit impaired upon origination are classified under this stage. The Company classifies all advances upto 30 days overdue under this category.

Stage 2: Exposures are classified as Stage 2 when the amount is due for more than 30 days but less than 90 days. All exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired are classified under this stage.

Stage 3: All exposures are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. Exposures where the amount remains due for 90 days or more are considered as to be stage 3 assets.

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument''s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Company undertakes the classification of exposures within the aforesaid stages at borrower level.

Definition of default

A default on a financial asset is when the counterparty fails to make the contractual payments within 90 days of when they fall due. Accordingly, the financial assets shall be classified as Stage 3, if on the reporting date, it has been 90 days and above past due. Non-payment on another obligation of the same customer is also considered as a Stage 3. In addition, Company shall also classify those accounts as default which meets the criteria as per the RBI circular RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22 dated November 12, 2021.

The calculation of ECL

ECL is a probability weighted credit losses (i.e. present value of all cash shortfalls) over the expected life of the financial instruments. Cash shortfalls are the difference between the cash flows that the entity is entitled to receive on account of contract and the cash flows that the entity expects to receive.

The mechanics of the ECL calculations are outlined below and the key elements are as follows:

Portfolio Segmentation:

For ECL purpose, the loan portfolio is broadly segmented as below :

1) Corporate lending

2) Small and medium enterprises lending (''SME'')

3) Commercial vehicle lending

Exposure-At-Default (EAD) : The Exposure at Default is the amount the Company is entitled to receive as on reporting date including repayments due for principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities.

Probability of Default (PD) : The Probability of Default is an estimate of the likelihood of default of the exposure over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio.

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

The ECL allowance is applied on the financial instruments depending upon the classification of the financial instruments as per the credit risk involved. ECL allowance is computed on the below mentioned basis:

12-month ECL: 12-month ECL is the portion of Lifetime ECL that represents the ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date. 12-month ECL is applied on stage 1 assets.

Lifetime ECL: Lifetime ECL for credit losses expected to arise over the life of the asset in cases of credit impaired loans and in case of financial instruments where there has been significant increase in credit risk since origination. Lifetime ECL is the expected credit loss resulting from all possible default events over the expected life of a financial instrument. Lifetime ECL is applied on stage 2 and stage 3 assets. The Company computes the ECL allowance either on individual basis or on collective basis, depending on the nature of the underlying portfolio of financial instruments. The Company has grouped its loan portfolio into Corporate loans, SME loans and Commercial vehicle loans.

Forward looking information

The company employs statistical models to analyse the data collected and generate estimates of the remaining lifetime PD of exposures and how these are expected to change as a result of the passage of time. Such statistical models are selected considering the availability of information related to the probability of default for each product. This analysis includes the identification and calibration of relationships between changes in GNPA as proxy for default rates and changes in key macro-economic factors. Key economic indicators considered for forward looking includes:

â¢ GNI growth

â¢ GDP deflator

F. Liquidity risk

Liquidity is the Company''s capacity to fund increase in assets and meet both the expected and unexpected obligations without incurring unacceptable losses. Liquidity risk is the inability to meet such obligations as they become due without adversely affecting the company''s financial conditions. The Asset Liability Management Policy of the Company stipulates a broad framework for Liquidity risk management to ensure that the Company can meet its liquidity obligations. The Asset Liability Management Committee (''ALCO'') monitors composition, characteristics and diversification of funding sources to ensure there is no over reliance on single source of funding. The Company tracks the cash flow mismatches for measuring and managing net funding requirement and reviews short-term liquidity profiles based on business projections and other commitments for planning purposes through Liquidity analysis. The ALCO also reviews the individual mismatch in each time bucket and cumulative mismatch and ensures the bucket wise limits are not breached.

The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen interruption in cash flow. The liquidity position of the company is assessed under a variety of scenarios giving due consideration to stress factors relating to both the market in general and risk specifics to the Company. Basis the liquidity position assessed under various stress scenarios; the Company reviews the following to effectively handle any liquidity crisis:

â¢ Adequacy of contingency funding plan in terms of depth of various funding sources, time to activate, cost of borrowing, etc

G. Market risk

Market Risk is the possibility of loss arising from changes in the value of a financial instrument as a result of changes in market variables such as interest rates, exchange rates and other asset prices. The Company''s exposure to market risk is a function of asset liability management and interest rate sensitivity assessment. The company is exposed to interest rate risk and liquidity risk, if the same is not managed properly. The company continuously monitors these risks and manages them through appropriate risk limits. The Asset Liability Management Committee (''ALCO'') reviews market related trends and risks and adopts various strategies related to assets and liabilities, in line with the Company''s risk management framework.

H. Operational risk

To manage fraud risk effectively, the Company has Independent Risk Containment Unit (''RCU'') which is responsible for implementing fraud risk management framework and ensure compliance. The RCU undertakes various activities such as pre-sanction loan applicant verification, pre-sanction and post disbursement documents verification, vendor verification, etc to prevent and manage frauds.

I. Capital Disclosure

The Company maintains adequate capital to cover risks inherent in the business and is meeting the capital adequacy requirements of our regulator, Reserve Bank of India (''RBI''). The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by RBI.

The Company has complied in full with all its externally imposed capital requirements over the reported period.

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

The Company maintains its capital structure in line with economic conditions and the risk characteristics of its activities. The Company has adopted a dividend distribution policy and the Board reviews the capital position on a regular basis.

H. Other information :

I. Plans assets comprises 100% of Insurance funds.

2. The expected contribution for the next year is '' 107.09 lakhs.

3. The average outstanding term of the obligations as at valuation date is 3.25 years.

4. The above disclosure is based on report and assumptions provided by the actuary and has been relied upon by the Auditors.

Note 38

Employee stock option plans

The Company provides share-based employee benefits to the employees of the Company, Subsidiary Company, the Directors, whether a whole time Director or otherwise but excluding Non-Executive Independent Directors, including the Directors of the Company, or a Subsidiary Company, such other entities or individuals as may be permitted by Applicable Laws and any of the aforesaid employees who are on deputation at the request of the Company and during the year ended 31 March 2024, employee stock option plans (ESOPs) were in existence. The relevant details of the schemes and the grant are as below.

A. Description of share-based payment arrangements

As at 31 March 2024, the Company has the following share-based payment arrangements:

Share option plans (equity settled)

According to the Schemes, the employees selected by the Nomination and remuneration committee from time to time will be entitled to options, subject to satisfaction of the prescribed vesting conditions. The contractual life (comprising the vesting period and the exercise period) of options granted is 5 years.

Note 41 - Other notes

Note 41.1

In relation to the loans portfolio, the Management has on a best effort basis and knowledge, has not identified transactions with Nil financiers (previous year Nil) aggregating '' Nil (previous year Nil) used for refinancing loans of the customers.

Note 41.2

The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in case of the Company, same are not covered:

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 Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) and rules made thereunder.

c) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

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

e) Charges or satisfaction to be registered with Registrar of Companies (ROC) have been registered within the stipulated statutory timelines.

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) In respect of the disclosure required vide notification dated March 24, 2021 issued by Ministry of Corporate Affairs, the Company has taken steps to identify transactions with the struck-off companies and considering the nature of business which is primarily lending to individuals and other small players, there are no such transactions which may be required to be reported.

h) The provision related to number of layers as prescribed under section 2(87) of the Companies Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to Company.

i) Other than the loans and advances given in normal course of business, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has also not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

j) Title deed of immovable property has been held in the name of the Company

Note 46 - The Company does not have any unhedged foreign currency exposure for the year ended 31 March 2024

Note 47 - Figures for the previous year have been regrouped, and / or reclassified wherever considered necessary to make them comparable to the current year presentation.

In terms of our report attached For and on behalf of the Board of Directors of

For M S K A & Associates IndoStar Capital Finance Limited

Chartered Accountants

ICAI Firm Registration Number:105047W

Tushar Kurani Bobby Parikh Karthikeyan Srinivasan

Partner Non-Executive Independent Chief Executive Officer &

Membership No. 118580 Chairman Whole Time Director

DIN: 00019437 DIN: 10056556

Vinodkumar Panicker Shikha Jain

Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: 29 April 2024 Date: 29 April 2024

Mar 31, 2023

The Company has assessed that there is no impairment of Goodwill as at and for the year ended March 2023. The recoverable amount has been determined based on a value in use calculation. The calculation uses cash flow projections of commercial vehicle business based on financial budgets covering a five-year period and a discount rate of 19%. The Company has determined that the recoverable amount calculations are most sensitive to changes in the assumptions of yield/spread during the budget period and the discounting rate. The management believes that any reasonably possible change in the key assumptions, on which recoverable amount is based would not cause carrying amount to exceed its recoverable amount.

Nature of Security:

1. Security is created in favour of the Debenture Trustee, as follows:

(i) First pari-passu charge (along with banks, financial institutions and other lenders which provide credit facilities to the Issuer) by way of hypothecation of standard asset portfolio of receivables (Net of NPA) of the Issuer and / or cash / cash equivalent and / or such other asset, as may be identified by the Company of '' 459,596 lakhs (March 2022: '' 96,932 lakhs); and

(ii) First pari-passu charge on immovable property situated at village Maharajpura of Kadi taluka, Mehsana district, Gujarat.

2. Debentures may be bought back subject to applicable statutory and/or regulatory requirements, upon the terms and conditions as may be decided by the Company.

Footnote : The Statutory Dues includes contribution to Provident Fund of Rs. 134,907/- which the Company is unable to pay to the regulatory authority as the respective employee have not enabled the Company to make the payment by linking their Provident Fund Identifcation number to their Aadhar number issued by the UIDAI.

(i) As per records of the Company, including its register of shareholders/members, the above shareholding represents legal ownerships of shares.

(ii) As at 31 March 2023, the Company has not complied with Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) to maintain minimum public shareholding in accordance with Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957.

(iii) As on date of approval of these financial statements, the Company has complied with Regulation 38 of SEBI (LODR) regulations.

(e) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to proportionate vote on basis of his contribution to fully paid up share capital.

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 proportionate amount of contribution made by the equity shareholder to the total equity share capital.

Footnote: During the year ended 31 March 2022, 1,20,68,966 Equity Shares were allotted to BCP V Multiple Holdings Pte. Ltd., pursuant to conversion of 1,20,68,966 CCPS into equity shares of the Company in the agreed conversion ratio of 1:1.

(g) Objective of Capital Management

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

The Company maintains its capital structure in line with economic conditions and the risk characteristics of its activities. The Company has adopted a dividend distribution policy and the Board reviews the capital position on a regular basis.

21.2 Nature and purpose of reserves

Capital Reserve

Capital reserve comprises of the amount received on shares forfeited by the Company on non-payment of call money. Statutory reserves u/s 45-IC of The RBI Act, 1934

Statutory reserves fund is required to be created by a Non-Banking Financial Company as per Section 45-IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of Reserve Bank of India.

Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised in accordance with the provision of the Companies Act, 2013.

Share options outstanding account

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under stock option schemes of the Company.

Retained earnings

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

General reserve

General reserve represents transfer of fair value of options granted to employees from ESOP Reserve to General Reserve on lapse/forfeiture of vested options by employees.

Footnote : During the quarter ended 31 March 2023, certain employees to whom stock options issued in accordance with ESOP plans disassociated from the Company. Accordingly, unvested and vested but not exercised options granted to these employees were cancelled. Employee cost includes effect of reversal of such cost of unvested options aggregating to Rs 4,421.94 lakh for the year ended 31 March 2023.

The Management considers the deferred tax assets recognised on carried forward losses to be fully set-off against future available profits considering the expected net interest income (NIM) from the existing loan book over the tenure of the loan.

Deferred tax asset of '' 4,584.61 lakhs on Unused Carried forward losses is yet to be recognized.

Note 30

Earnings per share (EPS)

Basic EPS calculated by dividing the net profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders (after adjusting profit impact of dilutive potential equity shares, if any) by the aggregate of weighted average number of equity shares outstanding during the year and the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Note 31

Financial instruments - Fair values and Risk management

A. Accounting classification and fair values

The management has assessed that the carrying amounts of cash and cash equivalents, loans carried at amortised cost, other financial assets, trade payables, borrowings, bank/book overdrafts and other current liabilities are a reasonable approximation to their fair value.

B. Risk Management Framework:

The Company''s risk management framework is based on

(a) Clear understanding and identification of various risks

(b) Disciplined risk assessment by evaluating the probability and impact of each risk

(d) Adequate review mechanism to monitor and control risks.

The Company''s risk management division works as a value centre by constantly engaging with the business providing reports based on key analysis and insights. The key risks faced by the Company are credit risk, liquidity risk, interest rate risk, operational risk, reputational and regulatory risk, which are broadly classified as credit risk, market risk and operational risk. The Company has a an established risk reporting and monitoring framework. The Company identifies and monitors risks periodically. This Process enables the company to reassess all the critical risks in a changing environment that need to be focused on.

C. Risk governance structure:

The Audit Committee oversees how management monitors compliance with risk management policies and procedures and reviews the adequacy of risk management framework in relation to the risk faced by the Company.

The risk management committee has established a comprehensive risk management framework across the business and provides appropriate reports on risk exposures and analysis in its pursuit of creating awareness across the Company about risk management.

D. Fair value hierarchy

Ind AS 107, ''Financial Instrument - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level.

E. Credit risk

Credit risk arises when a borrower is unable to meet his contractual obligations to the lender. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The Company has comprehensive and well defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. The appraisal process includes detailed risk assessment of the borrowers, physical verifications and field visits. The company has a well-defined post sanction monitoring process to identify portfolio-wise credit risk trends and early warning signals. This enables it to implement necessary changes to the credit policy, whenever the need arises to prevent any further slippage in the credit quality.

Grouping financial assets measured on a collective basis

The company splits its exposure into smaller homogeneous portfolios, based on shared credit risk characteristics, as described below in the following order:

â¢ Customer i.e. corporate and retail

â¢ Nature of product i.e. commercial vehicle and SME

Significant increase in credit risk

The credit risk on a financial asset of the Company are assumed to have increased significantly since initial recognition when contractual payments are more than 30 days past due. The retail loans where the renegotiated terms are not substantially different and involve repayment terms to be extended including interest or the EMI amount readjusted over the tenure are classified as Stage 2. In case of corporate loan the assessment of significant increase in credit risk is performed on a case to case basis. Additionally, accounts identified and reviewed by the credit committee for labelling as breaching pre-defined critical credit risk parameters will also be classified as Stage 2. Accordingly, the financial assets shall be classified as Stage 2, based on the quantitative as well as qualitative factors.

Write off

Restructured financial assets

A loan where repayment terms are renegotiated on substantially different terms as compared to the original contracted terms due to significant increase in credit risk of the borrower are classified as stage 2. Such loans continue to be in stage 2 until they exhibit regular payment of renegotiated principal and interest over a minimum observation period typically 12 months-post renegotiation, and there are no other indicators of impairment. Having satisfied the conditions of timely payment over the observation period these loans could be transferred to stage 1 or 2 and a fresh assessment of the risk of default is done.

Overview of the Expected Credit Loss principles

The Company records allowance for expected credit losses for all loans, debt financial assets not held at FVTPL, undrawn loan commitments (referred to as ''financial instruments'').

For the computation of ECL on the financial instruments, the Company categories its financial instruments as mentioned below:

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

Stage 2: Exposures are classified as Stage 2 when the amount is due for more than 30 days but do not exceed 90 days. All exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired are classified under this stage.

Stage 3: All exposures are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. Exposures where the amount remains due for 91 days or more are considered as to be stage 3 assets.

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument''s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Company undertakes the classification of exposures within the aforesaid stages at borrower level.

Definition of default

The calculation of ECL

ECL is a probability weighted credit losses (i.e. present value of all cash shortfalls) over the expected life of the financial instruments. Cash shortfalls are the difference between the cash flows that the entity is entitled to receive on account of contract and the cash flows that the entity expects to receive.

The mechanics of the ECL calculations are outlined below and the key elements are as follows:

Portfolio Segmentation:

For ECL purpose, the loan portfolio is broadly segmented as below:

1) Corporate lending

2) Small and medium enterprises lending (''SME'')

3) Commercial vehicle lending

Exposure-At-Default (EAD): The Exposure at Default is the amount the Company is entitled to receive as on reporting date including repayments due for principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities.

Probability of Default (PD): The Probability of Default is an estimate of the likelihood of default of the exposure over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio.

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

The ECL allowance is applied on the financial instruments depending upon the classification of the financial instruments as per the credit risk involved. ECL allowance is computed on the below mentioned basis:

12-month ECL: 12-month ECL is the portion of Lifetime ECL that represents the ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date. 12-month ECL is applied on stage 1 assets.

Lifetime ECL: Lifetime ECL for credit losses expected to arise over the life of the asset in cases of credit impaired loans and in case of financial instruments where there has been significant increase in credit risk since origination. Lifetime ECL is the expected credit loss resulting from all possible default events over the expected life of a financial instrument. Lifetime ECL is applied on stage 2 and stage 3 assets. The Company computes the ECL allowance either on individual basis or on collective basis, depending on the nature of the underlying portfolio of financial instruments. The Company has grouped its loan portfolio into Corporate loans, SME loans and Commercial vehicle loans.

Forward looking information

â¢ Gross national saving

â¢ WPI (Wholesale price index)

For the purpose of determination of impact of forward looking information, the company applies macro economic (ME) variables as stated above to each product and assess the trend of the historical probability of defaults as compared to the forecasted probability of default. Based on the directional trend of output, management applies an overlay if required. Overtime, new ME variable may emerge to have a better correlation and may replace ME being used now.

F. Liquidity risk

Liquidity is the Company''s capacity to fund increase in assets and meet both the expected and unexpected obligations without incurring unacceptable losses. Liquidity risk is the inability to meet such obligations as they become due without adversely affecting the company''s financial conditions. The Asset Liability Management Policy of the Company stipulates a broad framework for Liquidity risk management to ensure that the Company can meet its liquidity obligations. The Asset Liability Management Committee (''ALCO'') monitors composition, characteristics and diversification of funding sources to ensure there is no over reliance on single source of funding. The Company tracks the cash flow mismatches for measuring and managing net funding requirement and reviews short-term liquidity profiles based on business projections and other commitments for planning purposes through Liquidity analysis. The ALCO also reviews the individual mismatch in each time bucket and cumulative mismatch and ensures the bucket wise limits are not breached.

The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen interruption in cash flow. The liquidity position of the company is assessed under a variety of scenarios giving due consideration to stress factors relating to both the market in general and risk specifics to the Company. Basis the liquidity position assessed under various stress scenarios; the Company reviews the following to effectively handle any liquidity crisis:

â¢ Adequacy of contingency funding plan in terms of depth of various funding sources, time to activate, cost of borrowing, etc

â¢ Availability of unencumbered eligible assets

- The Company has borrowing facilities with various Banks. Few of such facilities have overriding clause to terminate, reduce, suspend or cancel the facility in future, at the absolute discretion of the lender. As at the date of approval of financial statements, none of lenders have terminated, reduced, suspended or cancelled any facility including undrawn limits. Accordingly, '' 7,486.11 lakhs scheduled for payment after 31 March 2024 for these facilities have been classified as per prevailing contractual maturity.

- in addition to above '' 60,321.50 lakhs classified as per contractual maturity above pertains to borrowings which exceeds the limits specified in the covenants.

- Also refer note Note 42

G. Market risk

Market Risk is the possibility of loss arising from changes in the value of a financial instrument as a result of changes in market variables such as interest rates, exchange rates and other asset prices. The Company''s exposure to market risk is a function of asset liability management and interest rate sensitivity assessment. The company is exposed to interest rate risk and liquidity risk, if the same is not managed properly. The company continuously monitors these risks and manages them through appropriate risk limits. The Asset Liability Management Committee (''ALCO'') reviews market related trends and risks and adopts various strategies related to assets and liabilities, in line with the Company''s risk management framework.

H. Operational risk

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from external events. The operational risks of the Company are managed through comprehensive internal control systems and procedures. Failure of managing operational risk might lead to legal / regulatory implications due to non-compliance and lead to financial loss due to control failures. While it is not practical to eliminate all the operational risk, the Company has put in place adequate control framework by way of segregation of duties, well defined process, staff training, maker and checker process, authorisation and clear reporting structure. The effectiveness of control framework is assessed by internal audit on a periodic basis. To manage fraud risk effectively, the Company has Independent Risk Containment Unit (''RCU'') which is responsible for implementing fraud risk management framework and ensure compliance. The RCU undertakes various activities such as pre-sanction loan applicant verification, pre-sanction and post disbursement documents verification, vendor verification, etc to prevent and manage frauds.

I. Capital Disclosure

The Company maintains adequate capital to cover risks inherent in the business and is meeting the capital adequacy requirements of our regulator, Reserve Bank of India (''RBI''). The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by RBI.

The Company has complied in full with all its externally imposed capital requirements over the reported period.

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

The Company maintains its capital structure in line with economic conditions and the risk characteristics of its activities. The Company has adopted a dividend distribution policy and the Board reviews the capital position on a regular basis.

The aforementioned is based on the responses received by the Company to its inquiries with suppliers with regard to applicability under the said Act. This has been relied upon by the auditors.

No interest has been paid/is payable by the Company during the year to the suppliers registered under this Act.

Note 37

Gratuity and other post-employment benefit plans:

The Company has a funded defined benefit gratuity plan. Every employee who has completed five years or more of service is eligible for gratuity on separation at 15 days basic salary (last drawn salary) for each completed year of service.

Based on Ind AS 19 ''Employee Benefits'' notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016, the following disclosures have been made as required by the standard:

H. Other information:

I. Plans assets comprises 100% of Insurance funds.

2. The expected contribution for the next year is '' 88.61 lakhs.

3. The average outstanding term of the obligations as at valuation date is 3.07 years.

4. The above disclosure is based on report and assumptions provided by the actuary and has been relied upon by the Auditors.

Note 38

Employee stock option plans

The Company provides share-based employee benefits to the employees of the Company, Subsidiary Company, the Directors, whether a whole time Director or otherwise but excluding Non-Executive Independent Directors, including the Directors of the Company, or a Subsidiary Company, such other entities or individuals as may be permitted by Applicable Laws and any of the aforesaid employees who are on deputation at the request of the Company and during the year ended 31 March 2023, employee stock option plans (ESOPs) were in existence. The relevant details of the schemes and the grant are as below.

A. Description of share-based payment arrangements

As at 31 March 2023, the Company has the following share-based payment arrangements:

Note 41 - Other notes

Note 41.1

As indicated in the prior reporting periods, the Company engaged a leading professional services firm to assist it in undertaking a review of its loan portfolio. The final findings of this review were submitted to the Audit Committee on August 5, 2022. The Company made incremental ECL provisions based, among others, on the findings of this review in its financial statements for the financial year ended March 31, 2022. (also refer note 41.2 to the financial statements).

The Company subsequently engaged a leading law firm, to carry out a review for undertaking root cause analysis of deviations to policies and gaps in the internal financial controls and systems (including of control gap/control override and individuals involved) focusing on the Company''s commercial vehicles and SME businesses (âConduct Reviewâ). The final findings of this review were submitted to the Audit Committee.

The Company, under the guidance and supervision of the Audit Committee, has completed its review of the findings thereon, and has taken necessary remedial and accountability measures. Among others, the Company has initiated measures to strengthen controls and improve the process and control environment of the Company including by way of senior managerial level changes and appointments, improving entity level controls, policy related changes, process improvements and technological enhancements. The Company has also concluded that with respect to the findings in the Conduct Review Report, there is no further reporting requirement under the Companies Act, 2013.

Note 41.2

In the financial statements for the year ended 31 March 2022, the Company had made incremental provision for expected credit loss (ECL) allowances on account of certain deficiencies in the Company''s internal controls that were identified during this period. Considering that these control deficiencies have since been remediated during the current year and the findings of the Conduct Review have been adequately evaluated (refer note 41.1), no incremental provisioning is considered necessary during the year ended 31 March 2023.

Although the possibility that the control deficiencies that were identified could potentially have had an impact on the financial statements for periods ending prior to 1 April, 2021, the Company had concluded that it was impracticable to determine the prior period - specific effects, if any, in respect of the charge to the Statement of Profit and Loss on account of the following:

(i) impairment allowance on loan assets and investment in security receipts;

(ii) loan assets written off; and

(iii) changes in fair value of financial guarantee contracts

when it finalised its financial statements for the year ended 31 March 2022 because significant judgements had been applied in determining the staging of the loan assets and the related impairment allowance for events and conditions which existed as on 31 March 2022. The Company believes it is not practicable to apply the same judgement without hindsight for the prior period(s).

Consequent to the above, in respect of such account balances, related income and the related disclosures, the figures for the year ended 31 March 2023 may not be strictly comparable with the figures for the year ended 31 March 2022.

Note 41.3 - Going Concern

As at 31 March 2023, the Company has equity which is significantly in excess of the minimum Capital Risk Adequacy Ratio (CRAR) that has been stipulated by the Reserve Bank of Indian (RBI) (including the proportion of Tier I Capital). Its liquid assets as of that date are also significantly in excess of the minimum stipulated by the RBI. Based on the Company''s forecast of cashflows over the twelve months following 31 March 2023, the available liquid assets and the expected cash inflows would be sufficient to meet its liabilities even under a stressed scenario. Additionally, during the year ended 31 March 2023 and till the adoption of these financial statements, the Company has been successful in raising additional debt of '' 4,58,698.46 lakhs from banks and financial institutions and through securitisation (including '' 25,500.00 lakh subsequent to the balance sheet date). In view of the above, the Management has concluded that no material uncertainties related to events or conditions that may cast significant doubt upon the entity''s ability to continue as a going concern exist as on the date of the balance sheet.

Note 41.4

In relation to the loans portfolio, the Management has on a best effort basis and knowledge, has not identified transactions with Nil financiers (previous year approximately 32) aggregating '' Nil (previous year '' 21,461.69 lakhs) used for refinancing loans of the customers.

The Company respectfully submits that it is unable to provide the disclosure relating to these transactions in the format as required under Division III of the Schedule III of the Companies Act, 2013 as the transactions are individually small and voluminous.

Note 41.5

The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in case of the Company, same are not covered:

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 wilful defaulter by any bank or financial institution or government or any government authority.

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

e) Charges or satisfaction to be registered with Registrar of Companies (ROC) have been registered within the stipulated statutory timelines.

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.

Notes:

- The above inflows and outflows is based on scheduled maturity of the financial instruments.

- in addition to above '' 60,321.50 lakhs classified as per contractual maturity above pertains to borrowings which exceeds the limits specified in the covenants.

In addition to the investments shown in the table above, the Company also has cash and cash equivalents as mentioned below and undrawn funding lines amounting to '' 13,500.00 lakhs

XI Registration obtained from other financial sector regulators: None

XII Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by NBFC

As per Reserve Bank of India CIRCULAR NO. RBI/2021-22/112 DOR.CRE.REC.No.60/03.10.001/2021-22, limit for SBL and GBL have been revised with effective from 1 October, 2022. As per the revised limit, there are no loans outstanding which exceeds SBL and GBL limit.

XIII Details of financing of parent Company products: None

XIV Disclosure of penalties imposed by RBI and other regulators:

Current year '' 54.20 lakhs excluding taxes paid to Stock exchanges relating to âMinimum Public Shareholding (MPS) Requirementsâ (previous year 26.70 lakhs) and others -'' 3.60 lakhs excluding taxes (previous year -Nil)

(vi) Institutional set-up for liquidity risk management

The Board of Directors of the Company has instituted the Asset Liability Management Committee to monitor and manage liquidity risk inter-alia by way of monitoring the asset liability composition, reviewing the liquidity and borrowing program of the Company, setting-up and monitoring prudential limits on negative mismatches w.r.t. liquidity and interest rate and forecasting and analysing ''what if scenario'' and preparation of contingency plans. Further, the Audit Committee and the Risk Management Committee as a part of evaluation of the overall risks faced by the Company evaluate the liquidity risk faced by the Company.

Footnote - Amount of Securitization is excluded from total borrowing, total assets, total liabilities and public funds.

Note 51

The Company does not have any unhedged foreign currency exposure for the year ended 31 March 2023

Note 52

Figures for the previous year have been regrouped, and / or reclassified wherever considered necessary to make them comparable to the current year presentation.

Mar 31, 2021

Security is created in favour of the Debenture Trustee, as follows:

(i) First pari-passu charge (along with banks, financial institutions and other lenders which provide credit facilities to the Issuer) by way of hypothecation of standard asset portfolio of receivables (net of NPA) of the Issuer and / or cash / cash equivalent and / or such other asset, as may be identified by the Company of '' 1,99,479 lakhs (March 2020: '' 2,09,368 lakhs); and

(ii) First pari-passu charge on immovable property situated at village Maharajpura of Kadi taluka, Mehsana district, Gujarat.

Other Terms: Debentures may be bought back subject to applicable statutory and/or regulatory requirements,

upon the terms and conditions as may be decided by the Company.

e. Terms/rights attached to equity shares

i. Terms/rights attached to Compulsorily Convertible Preference Shares (âCCPSâ):

CCPS are convertible into equity shares of the Company within a period of 18 months and carry a dividend rate of 10% p.a., payable annually, calculated on issue price, net of any taxes. Upon winding up or liquidation of the Company, the CCPS holder shall be entitled to distribution in accordance with applicable law.

21.2 Nature and purpose of reserves

Capital Reserve

Capital reserve comprises of the amount received on shares forfeited by the Company on non-payment of call money.

Statutory reserves u/s 45-IC of The RBI Act, 1934

Statutory reserves fund is required to be created by a Non-Banking Financial Company as per Section 45-IC of the Reserve Bank of India Act, 1934. The Company is not allowed to use the reserve fund except with authorisation of Reserve Bank of India.

Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised in accordance with the provision of the Companies Act, 2013.

Share options outstanding account (ESOP Reserve)

The shares options outstanding account is used to recognise the grant date fair value of options issued to employees under stock option schemes of the Company.

Retained earnings

Retained earnings represents surplus of accumulated earnings of the Company and which are available for distribution to shareholders.

General reserve

General reserve represents transfer of fair value of options granted to employees from ESOP Reserve to General Reserve on lapse/forefeiture of options by employees.

21.3 Dividend

The Board of Directors of the Company at their meeting held on June 17, 2021 declared and approved payment of dividend due on 1,20,68,966 Compulsorily Convertible Preference Shares of face value '' 10 each allotted on May 27, 2020 (CCPS), at rate of 10% p.a. calculated on the issue price ('' 290 per CCPS) amounting to '' 3,888.89 lakhs (dividend of '' 3,500.00 lakhs and withholding tax of '' 388.89 lakhs) for the period from May 27, 2020 to May 26, 2021, pursuant to terms approved by the Shareholders of the Company and fixed the Record Date for the purpose of determining entitlement of CCPS holders for payment of said dividend as Thursday, June 17, 2021.

Note 31

Financial instruments - Fair values and Risk management

A. Accounting classification and fair values

The management has assessed that the carrying amounts of cash and cash equivalents, loans carried at amortised cost, other financial assets, trade payables, borrowings, bank/book overdrafts and other current liabilities are a reasonable approximation to their fair value.

B. Risk Management Framework:

Company''s risk management framework is based on

(a) Clear understanding and identification of various risks

(b) Disciplined risk assessment by evaluating the probability and impact of each risk

(d) Adequate review mechanism to monitor and control risks.

Company''s risk management division works as a value centre by constantly engaging with the business providing reports based on key analysis and insights. The key risks faced by the company are credit risk, liquidity risk, interest rate risk, operational risk, reputational and regulatory risk, which are broadly classified as credit risk, market risk and operational risk. The company has a well established risk reporting and monitoring framework. The company identifies and monitors risks periodically. This process enables the company to reassess all the critical risks in a changing environment that need to be focused on.

C. Risk governance structure:

Company''s risk governance structure operates with a robust Board and Risk Management Committee (''RMC'') with a clearly laid down charter and roles and responsibilities. The Board oversees the risk management process and monitors the risk profile of the company directly as well as through a Board constituted Risk Management Committee. The Committee reviews the risk management policy, implementation of risk management framework, monitoring of critical risks, review and approval of exposures with conflict of interest and review of various other initiatives. The risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate limits and controls and to monitor risks and adherence to limits. The RMC reviews the risk management policies regularly to reflect the changes in market conditions and Company''s activities.

The Audit Committee oversees how management monitors compliance with risk management policies and procedures and reviews the adequacy of risk management framework in relation to the risk faced by the Company.

The risk management committee has established a comprehensive risk management framework across the business and provides appropriate reports on risk exposures and analysis in its pursuit of creating awareness across the Company about risk management.

D. Fair value hierarchy

Ind AS 107, âFinancial Instrument - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level. This is the case for unlisted equity securities included in level 3.

E. Credit risk

Credit risk arises when a borrower is unable to meet his contractual obligations to the lender. The effective management of credit risk requires the establishment of appropriate credit risk policies and processes. The Company has comprehensive and well defined credit policies across various businesses, products and segments, which encompass credit approval process for all businesses along with guidelines for mitigating the risks associated with them. The appraisal process includes detailed risk assessment of the borrowers, physical verifications and field visits. The company has a robust post sanction monitoring process to identify portfolio-wise credit risk trends and early warning signals. This enables it to implement necessary changes to the credit policy, whenever the need arises to prevent any further slippage in the credit quality.

Grouping financial assets measured on a collective basis

The company splits its exposure into smaller homogeneous portfolios, based on shared credit risk characteristics, as described below in the following order:

- Customer i.e. corporate and retail

- Nature of product i.e. commercial vehicle and SME

Significant increase in credit risk

The credit risk on a financial asset of the Company are assumed to have increased significantly since initial recognition when contractual payments are more than 30 days past due. The retail loans where the renegotiated terms are not substantially different and involve repayment terms to be extended including interest or the EMI amount readjusted over the tenure are classified as Stage 2. In case of corporate loan the assessment of significant increase in credit risk is performed on a case to case basis. Additionally, accounts identified and reviewed by the credit committee for labelling as breaching pre-defined critical credit risk parameters will also be classified as Stage 2. Accordingly, the financial assets shall be classified as Stage 2, based on the quantitative as well as qualitative factors.

Write off

Restructured financial assets

A loan where repayment terms are renegotiated on substantially different terms as compared to the original contracted terms due to significant increase in credit risk of the borrower are classified as stage 2. Such loans continue to be in stage 2 until they exhibit regular payment of renegotiated principal and interest over a minimum observation period typically 12 months-post renegotiation, and there are no other indicators of impairment. Having satisfied the conditions of timely payment over the observation period these loans could be transferred to stage 1 or 2 and a fresh assessment of the risk of default is done.

Overview of the Expected Credit Loss principles

The Company records allowance for expected credit losses for all loans, debt financial assets not held at FVTPL, undrawn loan commitments (referred to as ''financial instruments'').

For the computation of ECL on the financial instruments, the Company categories its financial instruments as mentioned below:

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

Note 31

Financial Instruments-Fair Values and Risk Management (Continued)

E. Credit Risk (continued)

Stage3: All exposures are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. Exposures where the amount remains due for 91 days or more are considered as to be stage 3 assets.

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument''s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Company undertakes the classification of exposures within the aforesaid stages at borrower level.

Definition of default

The calculation of ECL

ECL is a probability weighted credit losses (i.e. present value of all cash shortfalls) over the expected life of the financial instruments. Cash shortfalls are the difference between the cash flows that the entity is entitled to receive on account of contract and the cash flows that the entity expects to receive.

The mechanics of the ECL calculations are outlined below and the key elements are as follows:

Portfolio Segmentation:

For ECL purpose, the loan portfolio is broadly segmented as below :

1) Corporate lending

2) Small and medium enterprises lending (''SME'')

3) Commercial vehicle lending

Exposure-At-Default (EAD) : The Exposure at Default is the amount the Company is entitled to receive as on reporting date including repayments due for principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities.

Probability of Default (PD) : The Probability of Default is an estimate of the likelihood of default of the exposure over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio.

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

The ECL allowance is applied on the financial instruments depending upon the classification of the financial instruments as per the credit risk involved. ECL allowance is computed on the below mentioned basis:

12-month ECL: 12-month ECL is the portion of Lifetime ECL that represents the ECL that results from default events on a financial instrument that are possible within the 12 months after the reporting date. 12-month ECL is applied on stage 1 assets.

Lifetime ECL: Lifetime ECL for credit losses expected to arise over the life of the asset in cases of credit impaired loans and in case of financial instruments where there has been significant increase in credit risk since origination. Lifetime ECL is the expected credit loss resulting from all possible default events over the expected life of a financial instrument. Lifetime ECL is applied on stage 2 and stage 3 assets. The Company computes the ECL allowance either on individual basis or on collective basis, depending on the nature of the underlying portfolio of financial instruments. The Company has grouped its loan portfolio into Corporate loans, SME loans and Commercial vehicle loans.

Financial Instruments-Fair Values and Risk Management (Continued)

Forward looking information

â¢ GDP growth

â¢ WPI (Wholesale price index)

Risk Management amidst COVID-19:

Estimation uncertainty relating to COVID-19 global health pandemic:

In assessing the recoverability of loans, receivables, goodwill and investments, the Company has considered internal and external sources of information, economic forecasts and industry reports upto the date of approval of these financial results. The Company has performed stress testing on the assumptions used and based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets. The Company has developed estimates and applied management overlays for the purpose of determination of the provision for impairment of financial assets.

The full extent of impact of the pandemic (Wave 2) on the Company''s operations and financial performance (including impact on carrying value of Goodwill and impairment allowances for financial asset) will depend on future developments including governmental and regulatory measures and the Company''s responses thereto, which are highly uncertain at this time.

Further, in view of the matters mentioned above, the Company is regularly assessing and monitoring the impact of the Novel Coronavirus (COVID-19) pandemic on its liquidity and ability to repay its obligations as and when they are due. Based on the foregoing and necessary stress tests considering various scenarios, management believes that the Company will be able to pay its obligations as and when these become due in the foreseeable future.

Liquidity risk

Liquidity is the Company''s capacity to fund increase in assets and meet both the expected and unexpected obligations without incurring unacceptable losses. Liquidity risk is the inability to meet such obligations as they become due without adversely affecting the company''s financial conditions. The Asset Liability Management Policy of the Company stipulates a broad framework for Liquidity risk management to ensure that the Company can meet its liquidity obligations. The Asset Liability Management Committee (''ALCO'') monitors composition, characteristics and diversification of funding sources to ensure there is no over reliance on single source of funding. The Company tracks the cash flow mismatches for measuring and managing net funding requirement through Maturity Ladder approach and reviews short-term liquidity

profiles based on business projections and other commitments for planning purposes through Dynamic Liquidity analysis. The ALCO also reviews the individual mismatch in each time bucket and cumulative mismatch and ensures the bucket wise limits are not breached.

The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen interruption in cash flow. The liquidity position of the company is assessed under a variety of scenarios giving due consideration to stress factors relating to both the market in general and risk specifics to the Company. Basis the liquidity position assessed under various stress scenarios; the Company reviews the following to effectively handle any liquidity crisis:

â¢ Adequacy of contingency funding plan in terms of depth of various funding sources, time to activate, cost of borrowing, etc

â¢ Availability of unencumbered eligible assets

Market risk

Market Risk is the possibility of loss arising from changes in the value of a financial instrument as a result of changes in market variables such as interest rates, exchange rates and other asset prices. The Company''s exposure to market risk is a function of asset liability management and interest rate sensitivity assessment. The company is exposed to interest rate risk and liquidity risk, if the same is not managed properly. The company continuously monitors these risks and manages them through appropriate risk limits. The Asset Liability Management Committee (''ALCO'') reviews market related trends and risks and adopts various strategies related to assets and liabilities, in line with the Company''s risk management framework.

Operational risk

l 1

Financial Instruments-Fair Values and Risk Management (Continued)

control systems and procedures. Failure of managing operational risk might lead to legal / regulatory implications due to non-compliance and lead to financial loss due to control failures. While it is not practical to eliminate all the operational risk, the Company has put in place adequate control framework by way of segregation of duties, well defined process, staff training, maker and checker process, authorisation and clear reporting structure. The effectiveness of control framework is assessed by internal audit on a periodic basis.

To manage fraud risk effectively, the Company has Independent Risk Containment Unit (''RCU'') which is responsible for implementing fraud risk management framework and ensure compliance. The RCU undertakes various activities such as pre-sanction loan applicant verification, pre-sanction and post disbursement documents verification, vendor verification, etc to prevent and manage frauds.

J. Capital Disclosure

The Company maintains adequate capital to cover risks inherent in the business and is meeting the capital adequacy requirements of our regulator, Reserve Bank of India (''RBI''). The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by RBI.

Company has complied in full with all its externally imposed capital requirements over the reported period.

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

The Company maintains its capital structure in line with economic conditions and the risk characteristics of its activities. The Company has adopted a dividend distribution policy and the Board reviews the capital position on a regular basis.

Compensation of the Company''s key managerial personnel includes salaries, non-cash benefits, bonus provision and contributions to post-employment defined benefit plan.

The Company has paid managerial remuneration for the year ended March 31, 2021 to Mr. R. Sridhar, Whole-Time Director designated as Executive Vice-Chairman & CEO, in accordance with the requisite approvals obtained from the Members of the Company under the provisions of Section 197 read with Schedule V to the Companies Act, 2013 (âActâ). Further, managerial remuneration for the year ended March 31, 2021 paid to Mr. Shailesh Shirali, Whole-Time Director for a period from April 1, 2020 to July 10, 2020, is in excess by '' 44.73 lakhs of the limits provided in section 197 read with Schedule V to the Act. The Company proposes to obtain approval of the Members of the Company in General meeting by way of special resolution for waiver of recovery of excess remuneration paid to Mr. Shirali.

Note 38

Employee stock option plans

The Company provides share-based employee benefits to the employees of the Company, Subsidiary Company, the Director, whether a whole time Director or otherwise but excluding Non-Executive Independent Director, including the Director of the Company, or a Subsidiary Company, such other entities or individuals as may be permitted by Applicable Laws and any of the aforesaid employees who are on deputation at the request of the Company and during the year ended March 31, 2021, employee stock option plans (ESOPs) were in existence. The relevant details of the schemes and the grant are as below.

A. Description of share-based payment arrangements

As at March 31, 2021, the Company has the following share-based payment arrangements:

Share option plans (equity settled)

According to the Schemes, the employee selected by the Nomination and Remuneration Committee (''NRC'') from time to time will be entitled to options, subject to satisfaction of the prescribed vesting conditions. The contractual life (comprising the vesting period and the exercise period) of options granted is 5 years.

I. Details of the ESOP

Registration obtained from other financial sector regulators : None

- Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by NBFC

The Company has not exceeded the Single Borrower Limit (SBL) / Group Borrower Limit (GBL) during the financial year/period.

- Details of financing of parent Company products : None

- Disclosure of penalties imposed by RBI and other regulators : None

Note 50

The Company does not have any unhedged foreign currency exposure for the year ended March 31, 2021.

Note 51

The comparative financial information for the previous year prepared in accordance with Ind AS included have been audited by the predecessor auditors. The report of the predecessor auditor expressed an unmodified opinion.

Note 52

To provide more reliable and relevant information about certain items of the financial statements, previous year''s figures have been regrouped or reclassified, to conform to such current year grouping / classification. There is no impact on equity or net loss due to this regrouping / reclassification.

Mar 31, 2018

1. CORPORATE INFORMATION

IndoStar Capital Finance Limited (âthe Companyâ or âICFLâ) was incorporated on 21st July 2009. The Company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company vide Certificate No. N-13.02109. The Company is primarily engaged in Lending business.

2. BASIS OF PREPARATION

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting Standards (AS) notified under Section 133 of the Companies Act 2013 (âthe Actâ), read together with paragraph 7 of the Companies (Accounts) Rules, 2014, the Companies (Accounting Standards) Amendment Rules, 2016 and the directions issued by Reserve Bank of India (RBI) as applicable to Non Banking Finance Company (NBFC). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to proportionate vote on basis of his contribution to fully paid up share capital.

As per records of the Company, including its register of shareholders/members, the above shareholding represents legal and beneficial ownerships of shares.

b. Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the company, please refer note 24.

Nature of Security:

1. Security is created in favour of the Debenture Trustee, as follows:

(i) first pari-passu (with banks and financial institutions providing credit facilities to the Issuer) charge on by way of hypothecation on the standard asset portfolio of receivables of Rs.12,432,920,000/- (March 2017: Rs.11,932,020,000/-); and

(ii) first pari-passu charge on immovable property situated at village Maharajpura of Kadi taluka, Mehsana district, Gujarat

2. Debentures may be bought back subject to applicable statutory and/or regulatory requirements, upon the terms and conditions as may be decided by the Company.

NOTE 3 - GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has an funded defined benefit gratuity plan. Every employee who has completed five years or more of service is eligible for a gratuity on separation at 15 days basic salary (last drawn salary) for each completed year of service.

Based on AS 15 âEmployee Benefitsâ notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016, the following disclosures have been made as required by the standard:

The estimates of future salary increases, considered in actuarial valuation, are on account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected rate of return on plan assets is based on actuarial expectation of the average long term return expected on investments of the fund during the estimated term of the obligation.

NOTE 4- EMPLOYEE STOCK OPTION PLANS

The Company provides share-based employee benefits to the employees of the Company , the Holding Company or Subsidiary Company working in India or outside India, the Director, whether a whole time Director or otherwise but excluding Non-Executive Independent Director; whether in India or outside India, including the Director of the Company, the Holding Company or a Subsidiary Company ,such other entities or individuals as may be permitted by Applicable Laws and any of the aforesaid Employees who are on deputation at the request of the Company and during the year ended 31 March 2018, employee stock option plans (ESOPs) were in existence. The relevant details of the schemes and the grant are as below.

The Board of Directors approved the share based employee benefits i.e. issue of stock options to the key employees and directors of the company under five schemes viz. ESOP Plan 2012, ESOP Plan 2016, ESOP Plan 2016 II, ESOP Plan 2017 and ESOP Plan 2018 in their Meetings held on 20 June 2012, 11 April 2016, 21 September 2016, 18 April 2017 and 12 December 2017 respectively. According to the Schemes, the employee selected by the Nomination and remuneration committee from time to time will be entitled to options, subject to satisfaction of the prescribed vesting conditions. The contractual life (comprising the vesting period and the exercise period) of options granted is 5 years.

The company measures the cost of ESOP using the intrinsic value method. Had the company used the fair value model to determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts indicated below:

NOTE 5- LEASES

In case of assets taken on lease

The Company has taken various office premises under operating lease. The lease payments recognized in the statement of profit & loss are Rs.75,394,134. The non-cancellable operating lease agreements are for a period of 24 months to 60 months. There are no restrictions imposed by lease arrangements. There are no sub leases.

The future minimum lease payments in respect of non-cancellable operating lease as at the balance sheet date are summarized below :

NOTE 6 - DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES AS PER MSMED ACT, 2006

There are no amounts that need to be disclosed in accordance with the Micro Small and Medium Enterprise Development Act, 2006 (the âMSMEDâ) pertaining to micro or small enterprises, as no supplier has intimated the Company about its status as micro or small enterprises or its registration with the appropriate authority under MSMED.

I - Registration obtained from other financial sector regulators : None

II - Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by NBFC

The Company has not exceeded the Single Borrower Limit (SBL) / Group Borrower Limit (GBL) during the financials year/period.

III - Details of financing of parent company products : None

IV - Disclosure of penalties imposed by RBI and other regulators : None

V - Draw down from reserves : None

VI - Rating assigned by credit rating agencies and migration of ratings during the year/period

VII - Unsecured Advances against intangible securities : None

NOTE 7 - Subsequent to the year ended March 31, 2018, the Company has completed an Initial Public Offering (IPO) of 32,237,762 equity shares at Rs.572 per share, out of which :

i) 1,22,37,762 equity shares of Rs.10 each were allotted as fresh issue of equity shares at premium of Rs.562 per share.

ii) 2,00,00,000 equity shares of Rs.10 each were offered for sale by the existing shareholders at premium of Rs.562 per share. The equity shares of the Company got listed on the National Stock Exchange of India Limited and the BSE Limited on May 21, 2018.

NOTE 8- PREVIOUS YEARS COMPARATIVE

Previous year figures have been regrouped / rearranged, wherever considered necessary, to conform with Current year presentation.

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Notes to Accounts of Indostar Capital Finance Ltd.

m) Provisions

n) Taxes

(ii) Deferred tax

(iii) Indirect tax

o) Earnings Per Share

p) Contingent Liabilities

q) Segment reporting

r) Cash and cash equivalents

s) Non-current assets held for sale:

2.4 Significant accounting judgements, estimatesand assumptions

2.5 Securities premium account

2.6 Recent accounting pronouncements

22.2Nature and purpose of reservesCapital Reserve

Statutory reserves u/s 45-IC of The RBI Act, 1934

Securities premium

Share options outstanding account

Retained earnings

Debt instruments through other comprehensive income

Money received against share warrant

NOTE 32 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

B. Risk Management Framework:

C. Risk governance structure:

D. Fair value hierarchy

E. Credit risk

Grouping financial assets measured on a collective basis

Write off !

Restructured financial assets ;

Overview of the Expected Credit Loss principles

Definition of default

The calculation of ECL

Portfolio Segmentation:

F. Liquidity risk

G. Market risk

H. Operational risk

I. Capital Disclosure

NOTE 42 OTHER NOTESNote 42.1

Note 42.2

Tushar Kurani Naina Krishnamoorthy Randhir Singh Karthikeyan Srinivasan

Jayesh Jain Shikha Jain

m) Provisions

n) Taxes

(ii) Deferred tax

(iii) Indirect tax

o) Earnings Per Share

p) Contingent Liabilities

q) Segment reporting

r) Cash and cash equivalents

s) Non-current assets held for sale:

2.4 Significant accounting judgements, estimatesand assumptions

2.5 Securities premium account

2.6 Recent accounting pronouncements

22.2Nature and purpose of reservesCapital Reserve

Statutory reserves u/s 45-IC of The RBI Act, 1934

Securities premium

Share options outstanding account

Retained earnings

Debt instruments through other comprehensive income

Money received against share warrant

NOTE 32 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

B. Risk Management Framework:

m) Provisions

n) Taxes

(ii) Deferred tax

o) Earnings Per Share

p) Contingent Liabilities

q) Segment reporting

2.4 Significant accounting judgements, estimates and assumptions

2.5 Securities premium account

2.6 Recent accounting pronouncements

21.2 Nature and purpose of reserves Capital Reserve

Statutory reserves u/s 45-IC of The RBI Act, 1934

Securities premium

Share options outstanding account

Retained earnings

General reserve

Debt instruments through other comprehensive income

Note 31

B. Risk Management Framework:

C. Risk governance structure:

2.4 Significant accounting judgements, estimates
and assumptions

22.2Nature and purpose of reserves
Capital Reserve

NOTE 42 OTHER NOTES
Note 42.1

2.4 Significant accounting judgements, estimates
and assumptions

22.2Nature and purpose of reserves
Capital Reserve