Notes to Accounts of Piramal Finance Ltd.

Mar 31, 2026

(“Held for collection till maturity" to “held for collection of contractual cash flows and for selling the financial assets" with effect from April 1, 2024 considering change in intention to hold such assets till maturity and liquidate basis market condition. Consequently, the Company has re-classified the same from amortised cost to FVTOCI.

(ii) Government securities of '' 8.00 crores (March 31, 2025 - '' 16.00 crores) are pledged for availing lending/investment under triparty repo dealing and settlement (TREPs) facilities.

(e) As on March 31, 2026, investment in mutual funds amounting to '' 55.58 crores (March 31, 2025 - '' 74.87 crores) are lien marked against securitisation deals.

(f) In earlier year, based on review of internal and external factors, the management has reassessed the assumptions, strategy and business model pertaining to its overall exposure in Real Estate fund management business. The projected cash flows used reflect the management''s assessment of the net cash flows available to the Company from the operations of the subsidiary. It was concluded that the fair value less costs of disposal did not exceed the value in use. As a result of this analysis, the Company is carrying impairment provision of '' 271.63 crores (March 31, 2025 - '' 271.63 crores) towards investments in equity shares of the subsidiary.

(g) The Company does not have any direct investments outside India.

(h) The Company has made provision of '' 535.40 crores (March 31, 2025 - '' Nil) on security receipts based on risk assessment and regulatory requirements.

As at March 31, 2026, the Company has accumulated unabsorbed tax losses amounting upto '' 24,281.44 crores (March 31, 2025 - '' 24,742.96 crores) (including assessed carried forward tax losses of '' 24,281.44 crores (March 31, 2025 -'' 14,566.85 crores)), which give rise to potential deferred tax assets (DTA) amounting upto to '' 6,111.64 crores (March 31, 2025 - '' 6,213.72 crores) on such carried forward losses within the time period allowed under the applicable tax laws. In accordance with the principles of prudence and based on a detailed assessment of projected conservative future taxable income over the next five years, the Company has recognised deferred tax assets on carried forward business losses to the extent of '' 2,135.63 crores (March 31, 2025 - '' 1,904.44 crores). The amount of Business Loss on which DTA is not recognised is '' 15,796.53 crores (March 31, 2025 - '' 17,124.53 crores). Expiry date of above unabsorbed tax losses on which deferred tax assets is not recognised is between financial year 2029-30 to financial year 2031-32.

I investment property consists of land development rights for real estate property located in suburban in Mumbai. During the year ended March 31, 2026, pursuant to deemed cancellation of letter of interest (LOI) which was in the name of proposed developer and as an alternate developer in accordance with order issued by the Apex Grievance Redressal Committee (AGRC) could not be identified and the timeline for such appointment has expired, the Company has impaired its remaining carrying value of '' 675.00 crores lying under Investment Property, represented by Land development charges, and the same has been disclosed under Depreciation, amortisation and impairment.

Direct operating expenses (including repairs and maintenance) arising from investment property that did not generate rental income during the year is '' Nil (March 31, 2025 - '' Nil).

(b) During the current year there was increase in scope/design of the Projects in progress pertaining to "Project -Right to Name" on account of which there has been change in timelines and project cost. Further, there are no intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan during the previous year.

(c) Refer note 39(b) for the contractual capital commitments for purchase of Property, plant & equipment & Intangible assets.

(d) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) included above are held in the name of the Company as at the balance sheet date except for 8 properties (including 4 lands) having Gross Carrying Value of '' 1.40 crores as at balance sheet date which are acquired pursuant to the scheme of amalgamation / arrangement / merger / demerger and Company is in the process of getting the same transferred in its name.

(b) During the current year there was increase in scope/design of the Projects in progress pertaining to "Project -Right to Name" on account of which there has been change in timelines and project cost. Further, there are no intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original plan during the previous year.

(v) Terms/rights/restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(vi) Equity shares reserved for issue under ESOP Scheme - 18,79,088 shares (March 31, 2025 - 23,17,222 Equity shares) (refer note 44(iv)).

39 (a) CONTINGENT LIABILITIES
Particulars	As at March 31, 2026	As at March 31, 2025
Disputed Tax Dues
Dues towards Income Tax	1,043.77	1,145.10
Dues towards Goods and Services Tax |iv|	13.61	1,513.94
Dues towards Sales tax	9.76	9.76
Dues towards Central / State Excise / Service Tax / Customs	54.93	54.93
Stamp duty	9.37	9.37
Claims against the Company not acknowledged as debts - Legal Cases	14.12	13.47
Guarantees provided by bank on behalf of Company	0.25	0.25
(i) The Company has a process whereby periodically all long term contracts including derivatives contracts are assessed for material foreseeable losses. At year end the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts has been made in the books of account. (ii) The Company has also reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements. (iii) Vide Demand dated June 5, 1984, the Government has asked for payment to the credit of the Drugs Prices Equalisation Account, the difference between the common sale price and the retention price on production of Vitamin ''A'' Palmitate (Oily Form) from January 28, 1981 to March 31, 1985 which was not accepted by the Company. The Company was legally advised that the demand is untenable. (iv) During the previous year, the Company had received demand order of '' 1,502 crores relating to Slump Sale ''Business Undertaking'' of Pharma business by the Company to Piramal Pharma Limited in Financial Year 2021. The Company has filed an appeal against the same and during the current year, the Appellate Authority has passed a favourable judgement in the matter thereby reducing the demand, including penalty, imposed upon the Company from '' 1,502 crores to '' 9.22 crores. The same has not been contested.

40. SEGMENT REPORTING

The chief operational decision maker monitors its principle business segment i.e. ''lending and investing'' for the purpose of making decision about resource allocation and performance assessment. The Company is operating in a single reportable and geographical segment in accordance with Ind AS 108 - Operating Segments as notified under section 133 of the Companies Act, 2013 and accordingly there are no separate reportable segments.

Further, no clients individually accounted for more than 10% of the revenue in financial year ended March 31, 2026 and March 31, 2025.

41. A. MATERIAL EVENTS DURING THE YEAR

(i) The Board of Directors of the respective companies vide their meeting held on February 21, 2025, had approved the Scheme of Amalgamation amongst Piramal Finance Sales and Service Private Limited, DHFL Holdings Limited, DHFL Advisory & Investments Private Limited, Piramal Systems & Technologies Private Limited, Piramal Securities Limited, PEL Finhold Private Limited (collectively, the "Transferor Companies") and Piramal Investment Advisory Services Private Limited (the "Transferee Company") and their respective shareholders ("the Scheme of Amalgamation") for amalgamation of the Transferor Companies into the Transferee Company pursuant to the provisions of Section 233 of the Companies Act, 2013 read with relevant rules with Appointed Date of April 01, 2025.

Further, on November 18, 2025, the certified copy of the order of the Hon''ble National Company Law Tribunal, Mumbai Bench (''NCLT''), under Section 233 of the Companies Act, 2013 approving the Scheme of Amalgamation, along with a copy of Scheme of Amalgamation, was filed with the Registrar of Companies, Mumbai, Ministry of Corporate Affairs, Government of India.

Accordingly, the Scheme of Amalgamation had become effective November 18, 2025 (''Effective Date'') and consequently, the aforesaid Transferor companies stand amalgamated with the Transferee Company and dissolved without being wound up, in accordance with the Scheme of Amalgamation.

(ii) The Board of Directors of the respective companies vide their meeting held on March 27, 2026, have approved the Scheme of Amalgamation amongst the Company, Piramal Corporate Tower Private Limited, Piramal Agastya Offices Private Limited (formerly known as PRL Agastya Private Limited) and DHFL Investments Limited (the wholly-owned subsidiaries of the Company) and their respective shareholders and creditors under Sections 230 to 232 of the Companies Act, 2013 read with relevant rules with Appointed Date of April 1, 2026 ("the Scheme"). The Company and the Transferor Companies have filed a Company Application in relation to the Scheme with the NCLT on April 18, 2026. The aforesaid Scheme is subject to sanction of the NCLT and receipt of necessary approvals from the Insurance Regulatory and Development Authority of India, shareholders and creditors, as may be directed by the NCLT, and other regulatory authorities, as may be required.

(iii) Dividend income includes interim dividend of '' 1,321.80 crores received from its wholly owned subsidiary, Piramal Fund Management Limited ("PFML") (formerly known as Piramal Fund Management Private Limited) during the year.

(iv) During the previous year, the Company has sold its following wholly owned subsidiaries at given consideration to Piramal Investment Advisory Services Private Limited (Wholly owned subsidiary) and became step-down subsidiary of the Company from January 17, 2025.

(B) EXCEPTIONAL ITEMS INCLUDES FOLLOWING:

(i) During the year, the Company has paid/provided '' 59 crores for amalgamation related cost. (Refer note 57)

(ii) During the year, as part of sale agreement, the Company has paid '' 22 crores for compensation in relation to tax matters of earlier years for one of the erstwhile subsidiary.

42.B. AMALGAMATION OF DEWAN HOUSING FINANCE CORPORATION LIMITED WITH ERSTWHILE PIRAMAL CAPITAL & HOUSING FINANCE LIMITED

The Company holds 100% of equity share capital of DHFL Investments Limited (DIL). The wholly owned subsidiary of the Company, DIL holds 50% of equity share capital of Pramerica Life Insurance Company Limited (PLIL). Pursuant to the approval of the Resolution Plan by the Hon''ble NCLT (which has been affirmed by the Hon''ble Supreme Court on April 1, 2025), WGC and a limited liability partnership by the name of TDH Realty LLP, have pursued litigations in relation to the Resolution Plan, purportedly as the ultimate beneficiary of the CCDs. However, the litigation initiated by TDH Realty LLP before the NCLAT was disposed of as withdrawn by an order dated September 27, 2023, pursuant to settlement between the parties. Based on the approval of the Resolution Plan by Hon''ble NCLT, the Company has considered DIL as a subsidiary given its ability to exercise control over DIL with effect from the implementation date as per the Resolution Plan. Based on the evaluation of rights available under the shareholders agreement, PLIL has been considered as a joint venture and has been accounted based on equity method of accounting in the consolidated financial statements.

(i)(b) Disclosures for defined benefit plans based on actuarial valuation reports as on March 31, 2026

The Company has scheme for gratuity as part of post retirement plan. The Company has a defined benefit gratuity plan in India which is funded. The Company''s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund.

The fund is managed by Employees Group Gratuity Trusts which is governed by the Board of Trustees. The Board of Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy.

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

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

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

Notes:

Actuarial gains/losses are recognized in the period of occurrence under Other Comprehensive Income (OCI).

All above reported figures of OCI are gross of taxation.

Maturity Analysis of Benefit Payments is undiscounted cashflows considering future salary, attrition & death in respective year for members as mentioned above.

Average Expected Future Service represents Estimated Term of Post - Employment Benefit Obligation.

Weighted Average Duration of the Defined Benefit Obligation is the weighted average of cash flow timing, where weights are derived from the present value of each cash flow to the total present value.

Any benefit payment and contribution to plan assets is considered to occur end of the year to depict liability and fund movement in the disclosures. Expected Contribution in the Next Year is considered as the sum of net liability/assets at the end of the current year and current service cost for next year, subject to maximum allowable contribution to the Plan Assets over the next year as per the Income Tax Rules.

Qualitative Disclosures

- Risks associated with defined benefit plan

Gratuity is a defined benefit plan and entity is exposed to the Following Risks:

Interest rate risk

A fall in the discount rate which is linked to the G.Sec rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

Salary Risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Investment Risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality risk

Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk:

Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow stringent regulatory guidelines which mitigate risk.

- Characteristics of defined benefit plans

There is a change in the eligible salary for this benefit or introduction of FTEs (if applicable) due to change in labour codes during this period. Change in liability (if any) due to this scheme change/introduction is recognised as past service cost.

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

(iii) Long term service employee benefits

During the year, the Company has recognised long term service reward aggregating to '' 0.18 crores (March 31, 2025 - '' 0.17 crores) which is unfunded.

(iv) Share Based payment

Piramal Enterprises Limited (''PEL'') had formulated the Employees'' Stock Ownership Plan - 2015 ("ESOP Scheme 2015"), under which, such eligible employees of PEL and its subsidiaries could exercise Stock Options that were vested in them under the ESOP Scheme 2015. However, pursuant to the composite scheme of arrangement (Refer note 57) amongst PEL, Piramal Finance Limited (Formerly known as Piramal Capital & Housing Finance Limited) ("PFL" or "Company") and their respective shareholders and creditors and as approved and sanctioned by the Hon''ble National Company Law Tribunal, Mumbai Bench (''NCLT''), vide its order dated September 10, 2025, the Piramal Finance Limited Employees'' Stock Ownership Plan 2025 has been formulated and implemented with effect from September 16, 2025 to replace the ESOP Scheme 2015.

Under the above ESOP Scheme, 43,66,612 stock options are granted on various grant dates.

For above options:

Mode of settlement: Equity settled

Basis of determination of volatility: The volatility assumption was estimated based on the historical price fluctuations of the Company''s shares over the relevant period. The selected period reflects the expected life of the options, and appropriate adjustments have been made to ensure consistency with market conditions at the date of grant.

Vesting Conditions: Employee to remain in service and achievement of applicable performance on the date of vesting Modification to share based payment plans: N.A.

45. FAIR VALUE DISCLOSURES

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques.

The Company determines fair values of its financial instruments according to the fair value hierarchy as explained in Note 1(B)(iv).

This note describes the fair value measurement of financial instruments.

The Company''s valuation framework includes:

(i) Benchmarking prices against observable market prices or other independent sources.

(ii) Development and validation of fair valuation models using model logic, inputs, outputs and adjustments.

(iii) Use of fair values as determined by the derivative counter parties.

These valuation models are subject to a validation before they become operational and are continuously calibrated. The Company ensures that the fair values are in compliance with the requirements of Indian Accounting Standards.

Notes:

i. Discounted cash flow method has been used to determine the fair value. The yield used for discounting has been determined based on trades, market polls, levels for similar issuer with same maturity, spread over matrices, etc.

ii. Net Asset Value (NAV) as at the reporting period have been used to determine the Fair Value of the mutual fund investments/Security receipts. Refer note 7(h).

iii. Fair values of borrowings are based on discounted cash flow using a current borrowing rate. Discounted cash flow method has been used to determine the fair value. The discounting factor used has been arrived at after adjusting the rate of interest for the financial assets and financial liabilities by the difference in the G-SEC rates from date of initial recognition to the reporting dates. Floating rate instruments are presumed to be at fair value.

iv. Fair value of Preference Shares and Equity Instruments (other than subsidiaries) has been determined using the Comparable Transactions Multiples (CTM) and Comparable Companies Multiples (CCM) methods.

v. Fair value of Government Securities, T-Bills, and CROMS has been determined based on market quotes or prices published by FBIL/CCIL.

vi. Derivative financial instruments are valued using market-based MTM rates and standard valuation models with observable inputs.

* The fair value of investments & loans at amortised cost is gross of ECL provision excluding stage 3 loans which are presented net of ECL provisions.

46. CAPITAL MANAGEMENT

The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings as detailed in notes 14 to 17 offset by cash and cash equivalents and earmarked balances with banks (excluding lien marked)) and total equity of the Company.

The Company being a NBFC-ICC has to maintain a Capital Adequacy Ratio of 15% (Refer note 58 (xi)). The Company determines the amount of capital required on the basis of annual as well as long term operating plans and other strategic investment plans. The funding requirements are met through equity or non convertible debt securities or other long-term /short-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company. The Company has complied with all regulatory requirements related to capital and capital adequacy ratios as prescribed by NHB/RBI.

47. RISK MANAGEMENT

Risk Management is an integral part of the Company''s business strategy. The Risk Management oversight structure includes Committees of the Board and Management Committees. Company''s risk philosophy is to develop and maintain a healthy portfolio which is within its risk appetite and the regulatory framework. While the Company is exposed to various types of risks, the most important among them are liquidity risk, interest rate risk, credit risk, regulatory risk, market risk, foreign exchange risk and fraud and operational risk. The measurement, monitoring and management of risks remain a key focus area for the Company.

The Risk Management Committee of the Board provides direction to and monitors the quality of the internal audit function and also monitors compliance with NHB/RBI and other regulators.

The Company''s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with market best practices.

The Risk Management Committee of the Board ("RMC") reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyses risk exposure and provides oversight of risk across the organization. The RMC nurtures a healthy and independent risk management function to inculcate a strong risk management culture in the Company and broadly perceives the risk arising from (i) liquidity risk (ii) interest rate risk (iii) credit risk (iv) regulatory risk (v) fraud risk, operational and outsourcing risk (vi) market risk and (vii) foreign exchange risk.

47.1 LIQUIDITY RISK

Liquidity Risk refers to insufficiency of funds to meet the financial obligations. Liquidity Risk Management implies maintenance of sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit lines to meet obligations when due.

The Company has an Asset Liability Management Policy in place, which is in line with RBI guidelines. The ALCO is responsible for the management of the Company''s funding and liquidity requirements. The Company manages liquidity risk by maintaining unutilised banking facilities, credit lines and by continuously monitoring forecast and actual cash flows, and by assessing the maturity profiles of financial assets and liabilities.

The following table details the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the rate applicable as of March 31, 2026 and March 31, 2025 respectively has been considered. The contractual maturity is based on the earliest date on which the Company may be required to pay.

47.2 INTEREST RATE RISK Retail lending:

The Company is exposed to minimal interest rate risk as it has most of assets and liabilities are based on floating interest rates. The Company has an approved Asset and Liability Management Policy which empowers the ALCO assess the interest rate risk run by it and provide appropriate guidelines to the Treasury to manage the risk.

Wholesale lending:

The Company is exposed to interest rate risk as it has assets and liabilities based on both fixed and floating interest rates. The Company has an approved Asset and Liability Management Policy which empowers the Asset and Liability Management Committee (ALCO) to assess the interest rate risk run by it and provide appropriate guidelines to the Treasury to manage the risk. The ALCO reviews the interest rate risk on periodic basis and decides on the asset profile and the appropriate funding mix. The ALCO reviews the interest rate gap statement and the interest rate sensitivity analysis.

Borrowings:

The exposure of the Company''s borrowings to the interest rate risk at the end of the year for variable rate borrowing is '' 44,114.58 crores (March 31, 2025 - '' 21,376.55 crores) and fixed rate borrowings are '' 34,609.09 crores (March 31, 2025 - '' 34,656.28 crores)

The sensitivity analysis below have been determined based on the exposure to interest rates for assets and liabilities at the end of the reporting period. For floating rate assets and liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year and the rates are reset as per the applicable reset dates. The basis risk between various benchmarks used to reset the floating rate assets and liabilities has been considered to be insignificant.

Floating rate instruments that have been effectively hedged (cashflow hedge) using derivative instruments are excluded from the sensitivity analysis, as they are no longer exposed to interest rate risk.

Impact on the Company''s profit before tax if interest rates had been 100 basis points higher / lower is given below:

47.4 CREDIT RISK

The Company is exposed to Credit Risk through its lending activity. Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Retail lending:

For retail lending the credit policy has been reviewed and approved by Risk Team. The Credit Risk management structure includes credit policies and procedures. The Credit Policy defines customer segments, income assessment criteria, underwriting standards, target market definition, appraisal and approval processes, product limits, Delegation of Authority metrics (DoA) and cover risk assessment for product offerings etc. to ensure consistency of credit buying patterns.

Wholesale lending:

The Company''s Risk management team has developed proprietary internal rating models to evaluate credit risk for the loans and investments made by the Company. The output of traditional credit rating model is an estimate of probability of default. These models are different from the traditional credit rating models as they integrate both probability of default and loss given default into a single model.

Credit Risk Management

The Risk Management Committee of the Board provides direction to and monitors the quality of the internal audit function and also monitors compliance with NHB/RBI and other regulators.

• Assessment of borrower''s capability to pay - detailed assessment of borrower''s capability to pay is conducted. The approach to the assessment is uniform across the entire Company and is spelt out in the Credit Policy.

• Security cover - this is an assessment of the value of security under stress scenario which is further adjusted for factors like liquidity, enforceability, transparency in valuation, etc of the collateral.

• Geographic region - the Company monitors loan performances in a particular region to assess if there is any stress due to natural calamities, etc impacting the performance of loans in a particular geographic region

For wholesale lending business, credit risk management is achieved by considering various factors like :

• Promoter strength - This is an assessment of the promoter from financial, management and performance perspective.

• Industry & micro-market risk - This is an assessment of the riskiness of the industry and/or micro-market to which the borrower/project belongs

• Project risk - This is an assessment of the standalone project from which interest servicing and principal repayment is expected to be done.

• Structure risk - This is an assessment of the loan structure which is characterized by its repayment tenor, moratorium, covenants, etc.

• Security cover - This is an assessment of the value of the security under stress scenario which is further adjusted for factors like liquidity, enforceability, transparency in valuation etc. of the collateral.

• Micro Market- This is an assessment of the micro-market in which the underlying project is located

Each of the above components of the risk analysis are assigned a specific weight which differ based on type of loan. The weights are then used with the scores of individual components for conversion to a risk rating.

Based on the above assessment the risk team categorises the deals in to the below Risk Grades

Further, a periodic review of the performance of the portfolio is also carried out by the Risk Group. The Risk Group adjusts the stress case considered during the initial approval based on actual performance of the deal, developments in the sector, regulatory changes etc. The deal level output is combined to form a portfolio snapshot. The trends from portfolio are used to provide strategic inputs to the management.

The credit risk on liquid funds and other financial instruments is limited because the counterparties are banks with high credit-ratings assigned by credit-rating agencies or mutual funds.

Provision for Expected Credit Loss

The Company has assessed the credit risk associated with its financial assets for provision of Expected Credit Loss (ECL) at the reporting dates. For different product categories (Real Estate, Senior debt, Lease Rental Discounting, Loan Against Shares, Mezzanine etc), the Company has developed scorecard that makes use of various reasonable supportive forward looking parameters which are both qualitative as well as quantitative in nature. These scorecards helps in determining the change in credit risk and the probability of default. These parameters have been detailed out in Note No. iv of Material Accounting Policies information. Based on the result yielded by the above assessment, the financial assets are classified into (1) Standard (Performing) Asset, (2) Significant Credit Deteriorated (Under-Performing) Asset (3) Default (Non-Performing) Asset (Credit Impaired).

For the year ended March 31, 2026 and March 31, 2025 the Company has developed a PD Matrix after considering some parameters as stated below :

For provisioning on the wholesale financial assets, the key parameters for various scorecards are highlighted as follows -Real Estate products (Construction Finance, Structured Debt, LRD) - (1) Developer Grade (2) Past Overdue History (3) Tenant profile (4) sales and collection deviations (5) Stage of the project (6) Geography etc. Some of the Parameters for Non Real Estate products (Senior lending, mezzanine, project finance etc) - (1) Sponsor strength (2) Overdues (3) Average debt service coverage ratio (4) Regulatory Risk (5) Stability of EBITDA (6) Quality of underlying assets etc. based

on these parameters the Company has computed the PD. The Company has also in built model scorecards to determine the internal LGD. However, due to lack of default history to statistically substantiate the internal LGD, the Company has made use of a combination of both internal as well as external LGD. The Company also maintains Expected Credit Loss for undisbursed limits.

The Company uses ECL allowance for retail financial assets measured at amortised cost, which are not individually significant, and comprise of a large number of homogeneous loans that have similar characteristics. The expected credit loss is a product of exposure at default, probability of default and loss given default. Due to lack of sufficient internal data, the Company uses a mix of internal and external PD from credit bureau agency (TransUnion) for last 7 years for potential credit losses.

Further, the estimates from the above sources have been adjusted with forward looking inputs from anticipated change in future macro-economic conditions to comply with IndAS 109.

For the purpose of expected credit loss analysis the Company defines default as any asset with more than 90 days overdues. This is also as per the rebuttable presumption provided by the Indian Accounting standards.

(c) Description of Collateral held as security and other credit enhancements

The Company has set benchmarks on appropriate level of security cover for various types of deals. The Company periodically monitors the quality as well as the value of the security to meet the prescribed limits. The collateral held by the Company varies on case to case basis and includes:

i) First / Subservient charge on the Land and / or Building of the project or other projects including development rights, properties and vehicles

ii) First / Subservient charge on the fixed and current assets of the borrower

iii) Hypothecation over receivables from funded project or other projects of the borrower

iv) Pledge on Shares of the borrower or their related parties

v) Guarantees of Promoters / Promoter Undertakings

vi) Post dated / Undated cheques

As at the reporting date, the value of the collateral held as security for the credit impaired financial assets is higher than the exposure at default for these assets.

47.5 REGULATORY RISK:

The Company requires certain statutory and regulatory approvals for conducting business and failure to obtain retain or renew these approvals in a timely manner, may adversely affect operations. Any change in laws or regulations made by the government or a regulatory body that governs the business of the Company may increase the costs of operating the business, reduce the attractiveness of investment and / or change the competitive landscape.

47.6 FRAUD RISK AND OPERATIONAL AND OUTSOURCING RISK:

Operational risk refers to the potential loss or disruption resulting from inadequate or failed internal processes, people, systems, or external events. It encompasses risks related to human error, technology failures, legal and compliance issues, and business continuity disruptions that can impact the operations of a finance company.

Operational Risk Management policy provides the structure and techniques that will facilitate consistent functioning of Operational Risk Management (ORM) framework. This Policy is focused on Operational Risk arising on account of People, Process, Systems, and external events. Company has Operational Risk Management Committee (ORMC) consisting of senior executives which monitors the ORM framework. Similarly, outsourcing policy provides structure and techniques that facilitates consistent functioning of Outsourcing Risk Management framework. Company has Central Outsourcing Committee (COC) consisting of senior executives which monitors the Outsourcing risk management framework.

Fraud Risk Management policy focuses on prevention, detection, investigation of fraud and actions that Company should take in the event of fraud. Company has formulated Fraud Risk Management Committee (FRMC) consisting of senior executives. Company has also established a channel for employees to report frauds and related concern in timely manner.

Further, in line with the RBI''s Fraud Risk Management (FRM) guidelines, the Company has constituted a Special Committee of the Board for Monitoring and Follow-up of Frauds (SCBMF) to oversee and evaluate the effectiveness of the fraud risk management framework.

The Company''s risk management framework considers strategic, operations, financial reporting and external laws and regulations related risks

The Company has an elaborate system of internal audit and concurrent audit commensurate with the size, scale and complexity of its operations and covers funding operations, financial reporting, fraud control and compliance with laws and regulations.

Further, Concurrent audit helps prevent and address document related anomalies and deficiencies which strengthening quality assurance during onboarding and processing of transactions.

Internal Auditors monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with laws and regulations, efficacy of its operating systems, adherence to the accounting procedures and policies at all offices of the Company and report directly to Audit Committee and Risk Management Committee of the company.

47.7 FOREIGN EXCHANGE RISK:

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and CHF. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency i.e. INR. The Company has taken foreign currency floating rate borrowing which is linked to various benchmark rates. The risk is measured through a forecast of highly probable foreign currency cash flows. The risk is hedged with the objective of minimising the volatility of the INR cash flows of highly probable forecast transactions.

The Company has entered into cross-currency interest rate swap (CCIRS), principal only swaps (POS), internal rate swaps (IRS) and forwards for the entire loan liability to manage the foreign exchange risk along with interest rate risk arising from changes in benchmark rates on such borrowings. As per the Company''s policy, the critical terms of hedging instrument must align with the hedged items. Refer note 48 for accounting for the cash flow hedge and impact of hedge accounting on the statement of profit and loss.

Foreign currency asset/liability outstanding as on March 31, 2026 are as follows except External Commercial Borrowing of USD 1240 million (March 31, 2025 - USD 365 million), Foreign currency bond of USD 450 million (March 31, 2025-USD 450 million) and foreign currency term loan (FCNR loan) from Indian bank of USD 50 million (March 31, 2025 - Nil which are fully hedged (Refer note 48).

55. EVENTS AFTER REPORTING PERIOD

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

56. ASSETS HELD FOR SALE

(i) (a) During the earlier years, on conclusion of a strategic review of its investments, erstwhile Piramal Enterprises

Limited had initiated identification and evaluation of potential buyers for its associate investments, Shriram Ll Holdings Private Limited, Shriram GI Holdings Private Limited and Shriram Investment Holdings Limited. The Company anticipated completion of the sale in foreseeable future and accordingly, investments amounting to '' 2,277.54 crores in respect of these associates had been reclassified under ''assets held for sale''.

On reclassification, these investments have been measured at the lower of carrying amount and fair value less cost to sell.

(b) Pursuant to the restructuring of Shriram Group in November 2022, the Company had received shares in multiple Shriram Group companies. It included Company''s ownership of 20% in both Shriram GI Holdings Private Limited and Shriram LI Holdings Private Limited (Holding Companies).

On receipt of these shares, the Company''s intention was to dispose them off and hence were classified as ''assets held for sale''. These Holding Companies own stakes in Shriram General Insurance Company Limited ("SGIC") and Shriram Life Insurance Company Limited ("SLIC") (Operating Companies) respectively. Further, during the year ended March 31, 2025, Shriram Group merged its Holding Companies into the respective Operating Companies, which has resulted in the Company''s holding direct stakes in these Operating Companies.

(c) During the year, the Company entered into a Share Purchase Agreement for the sale of its entire equity stake of 14.72% in SLIC for a consideration of '' 600.00 crores. The Company has received the said consideration, and a net gain of '' 263.09 crores has been recognized under "other operating income".

Investment in SGIC continue to meet the conditions to be classified as "Assets held for Sale" as the management remains committed to its active plan and pursuit to monetise these investments in near future.

(ii) The Company received dividend of '' Nil crores and '' 52.50 crores (March 31, 2025''12.68 crores and '' 44.77 crores) from SLIC and SGIC respectively during the year ended March 31, 2026.

(iii) Based on valuation reports of independent external valuer, no impairment provision was required for the year ended March 31, 2026 on these investments.

57. COMPOSITE SCHEME OF ARRANGEMENT

A. The Board of Directors of the Company, in its meeting dated May 8, 2024, approved the Composite Scheme of Arrangement amongst the Company (hereinafter referred to as the "Transferee Company") and its holding company, Piramal Enterprises Limited (''PEL'') (hereinafter referred to as the "Transferor Company") and their respective shareholders and creditors under Sections 230 to 232 read with Section 52 and Section 66 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder (''Scheme''). The Scheme was subsequently modified by the Committee of Directors (Administration, Authorisation & Finance) of the Company at its meetings held on October 26, 2024 and April 9, 2025. The appointed date of the Scheme is April 1, 2024.

RBI approval on Scheme was received on April 8, 2025 and the Company on April 10, 2025 has filed Application with the National Company Law Tribunal, Mumbai Bench.

The Hon''ble NCLT vide its Order dated September 10, 2025 has sanctioned the Scheme. Upon receipt of all requisite approvals, PEL and the Company have filed the relevant Forms with the Register of Companies on September 16, 2025. Accordingly, the Scheme has become effective on September 16, 2025 ("Effective Date").

The amalgamation has been accounted with principles of ''reverse acquisition'' as stated in Ind AS 103, Business Combinations (''Ind AS 103''), read with ''Pooling of Interest Method'' as laid down in Appendix C (Business Combinations of Entities under Common Control) of Ind AS 103, notified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as specified in the scheme w.e.f. Appointment date. Accordingly:

• All the Assets, Liabilities and reserves of the Transferor Company shall stand transferred to and vested in the Transferee Company pursuant to the Scheme and shall be recorded by the Transferee Company at their respective carrying amounts and in the same form as appearing in the standalone financial statements of the Transferor Company

• The Transferee Company shall measure its own Assets, liabilities and reserves at the carrying values and in the same form as appearing in the consolidated financial statements of the Transferor Company, being the holding company of the Transferee Company and determined to be the accounting acquirer as per Ind AS 103 under this Scheme;

• The value of all investments held by the Transferor Company in the Transferee Company and the entire shareholding of the Transferee Company shall stand cancelled pursuant to amalgamation and there shall be no further obligation/ outstanding in that regard;

• Pursuant to the amalgamation of the Transferor Company with the Transferee Company, inter-company balances between the Transferee Company and Transferor Company, if any, shall stand cancelled, the obligations in respect thereof shall come to an end and there shall be no liability in that regard;

• The difference between the

(a) book value of Assets, liabilities and reserves of both the Transferor and Transferee Companies recorded/ measured basis above and

(b) value of investment in the share capital of the Transferee Company in the books of accounts of the Transferor Company as on the Appointed Date and the new equity share capital issued by the Transferee Company,

if surplus, shall be credited to the capital reserves and presented separately from other capital reserves of the merged entity, and

if deficit, then the same shall be adjusted against the capital reserves or revenue reserves of the merged entity in that order, and if there are no reserves or if there are inadequate reserves, then the remaining deficit will be debited to a separate account titled ''Amalgamation Adjustment Deficit Account'' presented under ''Other Equity'';

• In case of any differences in the accounting policies between the Transferor Company and the Transferee Company, the accounting policies followed by the Transferor Company shall prevail and the impact of the same will be quantified and adjusted in the revenue reserves of the merged entity to ensure that the financial statements reflect the financial position based on consistent accounting policies.

In accordance with the scheme, the Transferee Company shall write off the debit balance in Amalgamation Adjustment Reserve in the books of the Transferee Company as on the Appointed Date against

(a) the credit balance in the capital reserve of the merged entity, and

(b) the balance remaining after adjustment pursuant to (a) above against the securities premium account of the amalgamated entity.

Comparative financial information in the financial statements of the Transferee Company has been restated for the accounting impact of the amalgamation under this Scheme, as stated above, as if the amalgamation had occurred from the beginning of the preceding period presented in the merged financial statements of the combined entity.

Consideration

The face value of new equity shares issued by the Transferee Company to the shareholders of the Transferor Company pursuant to scheme has been credited to the Equity Share Capital Account of the Transferee Company;

As per the terms of the approved scheme, the Transferee Company has issued to the shareholders of the Transferor Company, in consideration of the amalgamation, 1 (one) equity share having face value INR 2/- (Indian Rupees Two only) of the Transferee Company for each equity share held by the shareholders of the Transferor Company. 22,54,77,700 equity Shares of the Company has been allotted to shareholder of PEL as on Record date in accordance with the share exchange ratio (i.e. 1:1) as per scheme. The same was disclosed as "Equity share capital suspense" till the date of issuance of equity shares. During the year, the Company''s equity shares were listed on the stock exchanges pursuant to the amalgamation of the transferor company.

Earnings per share has been computed considering weighted average number of share of Transferor company since the appointed date is April 1, 2024.

57. COMPOSITE SCHEME OF ARRANGEMENT (Contd.)

B. Adjustment of debit balance of amalgamation adjustment reserve account in the books of the transferee company:

As per scheme, the debit balance in ''Amalgamation Adjustment Reserve'' outstanding in the books of the Transferee Company as on the Appointed Date shall be adjusted, (a) against the credit balance in the capital reserve account of the merged entity, and (b) the balance remaining after adjustment pursuant to (a) above against the securities premium account of the merged entity.

C. As on March 31, 2025, pre-amalgamation with transferor company, retail loans were grossed up by '' 5,649.48 crores, ECL provisions of '' 3,479.91 crores and balance gross up as reflected under Fair Value Adjustment on Merger in Transferee company''s books of '' 2,169.57 crores as part a of eDHFL merger (part of NCLT order) which was different from the presentation requirements of Ind AS 32, Financial Instruments Presentation, that requires such adjustment to be netted off with the book value of corresponding assets.

Pursuant to NCLT order of PEL amalgamation and accounting scheme laid down, these numbers have now been presented on Net basis.

58. ADDITIONAL REGULATORY INFORMATION

(i) The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person that are:

(a) repayable on demand; or

(b) without specifying any terms or period of repayment.

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

(iv) As at March 31, 2026, there were no pending charge creations.

Charge satisfaction in respect of term loans is pending for Indian Overseas Bank, for which the No Objection Certificate was received from the lender on March 30, 2026, and for Canara Bank, where the loan was closed on March 30, 2026 and the "No Due Certificate" is awaited.

Charge modification is pending in respect of the term loan from Axis Bank, which was closed on March 24, 2026, pending receipt of the No Due Certificate. Additionally, charge modification is pending for ISIN INE516Y07535 (Non Convertible Debentures) due to pending approval from the Ministry of Corporate Affairs, and for ISINs INE140A07799, INE516Y07261 and INE516Y07279, the requisite forms are in the process.

(v) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(vi) The Company have not traded or invested in Crypto currency or Virtual Currency during the year.

(vii) During the year the Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) During the year the Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

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

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ix) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(xii) Quarterly Asset cover statements submitted to Debenture and Security Trustee''s are in agreement with the books of accounts.

(xiii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2026. In one instance, transfer of unpaid dividend for financial year 2017-18 aggregating to '' 2.10 crores, pertaining to the transferor Company, which was due on September 29, 2025, was paid on November 27, 2025. The delay was due to the fact that the during this period, the Company had made application with the Stock Exchange for its listing of equity shares pursuant to Scheme of Arrangement and the same could have been transferred post listing.

(xiv) The Company has complied with the Rule 3 of Companies (Accounts) Rules, 2014 amended on August 5, 2022 relating to maintenance of electronic books of account and other relevant books and papers. The Company''s books of accounts and relevant books and papers are accessible in India at all times and backup of accounts and other relevant books and papers are maintained in electronic mode within India and kept in servers physically located in India on daily basis.

59. LOANS AGAINST GOLD AND SILVER COLLATERAL

59.1 The Company has not extended any loans against eligible gold and silver collateral