Note 5.3

The Company has acquired certain assets under SARFAESI Act which are retained for the purpose of sale under the rules and regulations of SARFAESI Act involving realisable value of H 10,081.97 lakhs ( Market value as at March 31,2023 : H 4,666.53 lakhs), which are part of NPA portfolio aggregating to H 8,688.56 lakhs (As at March 31,2023: H 4,220.43 lakhs) for which necessary provisions have already been made. These assets are accounted as and when they are realised.

a. The Total Outstanding Amount means Principal accrued interest other charges pertaining to loans excluding Ind AS adjustments

b. As on March 31,2024 the NHL category includes Commerial Housing Loan of H 3,45,263.90 Lakhs (As at March 31, 2023 -H 2,88,590.92 Lakhs)

(i) The above asset classification are as per the Non-Banking Financial Company-Housing Finance Company (Reserve Bank) Directions, 2021 as on March 31,2024 and March 31,2023.

The Company has calculated ECL based on the DPD as it existed before the loan was considered for OTR. However, the OTR cases are shown in Stage 2 in all cases, except those which are above 90 DPD, which is shown in Stage 3. ECL for OTR cases which are in 'Not due' bucket are considered as if it is in '1 to 30 days' bucket.

Note 6.2

The above investments (investment SI No. 1 to 9 ) are made to comply with the Statutory Liquidity Assets to be maintained under NHB/Non-Banking Financial Company-Housing Finance Company (Reserve Bank) Direction, 2021. These carry a floating charge created in favour of trustees of depositors. The total investments under Statutory Liquidity Assets include H 7,315.95 lakhs (As at March 31, 2023 - H 7,403.29 lakhs) [valued at amortised cost] in Government securities and H 459.07 lakhs (As at March 31,2023 - H 436.95 lakhs) in deposits with Nationalised Bank.

11.1 Trade payables include H Nil (As at March 31,2023 H Nil) payable to "Suppliers" registered under The Micro, Small & Medium Enterprises Development Act 2006. No interest has been paid by the company during the year to the "suppliers" covered under The Micro, Small & Medium Enterprises Development Act, 2006. The above information has been presented based on the information received by the Company in this regard from the suppliers and relied by the auditors.

12.2 Nature of security and terms of repayment

Secured by first and exclusive floating charge on specified assets by hypothecation of book debts and loan receivables. Interest will be paid annually and principal amount will be paid on maturity.

13.1 Secured loans includes borrowings from National Housing Bank, Canara Bank, HDFC Bank, and State Bank of India etc., are secured by way of specific charge on book debts, outstanding, receivables, etc., of the Company. The tenure of the Long term borrowings are more than one year and upto 10 years and that of short term borrowings are repayable on demand.

13.2 There is no amount of continuing default as on the Balance Sheet date in terms of repayment of loans & interest on Borrowings by the Company.

13.3 There is no pending charges or satisfaction yet to be registered with ROC within the statutory period as on March 31,2024.

Further, the Company has issued Unsecured Debentures in the nature of Tier II capital worth H 10,000 lakhs in the financial year 2014-15 for a term of 10 years through private placement. These Debentures are subordinated to present and future senior indebtedness of the Company and qualify as Tier II Capital under the National Housing Bank (NHB) guidelines for assessing capital adequacy. Based on the balance term to maturity as at March 31,2024, 0% (As at March 31,2023 20%) of the book value of the subordinated debt is considered as Tier II Capital for the purpose of Capital Adequacy computation.

16.1 As required under Section 125 of the Companies Act, 2013, the Company has transferred H 15.69 lakhs as unclaimed deposits including interest accrued thereon (As at March 31,2023 H 25.11 lakhs), except to the extent of H 23.10 lakhs (As at March 31, 2023 H 35.09 lakhs) in respect of claims that are disputed deposits on account of legal heirs amounting to H 4.90 lakhs, in respect of H 5.96 lakhs, the company has received the restraining orders from the competent authorities not to carry any operations in these accounts and H 12.24 lakhs which includes cheques issued not encashed by the depositor, renewal letter received from depositor without original receipts and amount not transferred to IEPF which has exceeded a period of more than 7 years from the date of maturity.

16.2 As required under Section 125 of the Companies Act, 2013, the Company has transferred H 26.21 lakhs as unclaimed dividend to Investor Education and Protection Fund (IEPF) during the year as of March 31, 2024. There are no dividends which are pending to be transferred to Investor Education and Protection Fund as per Sec 125 of the Companies Act, 2013 as at year end.

Note 20.1: As per Section 29C of the National Housing Bank Act, 1987 (the "NHB Act"), the Comapny is required to transfer at least 20% of its net profits every year to a reserve before any dividend is declared and no appropriation from the statutory reserves except for the purpose as may be specified by the National Housing Bank (NHB) from time to time and every such appropriation shall be reported to the NHB.

For this purpose, any Special Reserve created by the Company under Section 36(1)(viii) of the Income-tax Act, 1961 is considered to be an eligible transfer. The Company has transferred an amount of H 21000 lakhs (Previous Year H 16864.94 Lakhs) to Special Reserve in terms of Section 36(1)(viii) of the Income-tax Act, 1961.

Note 20.2: The Company has paid final dividend of H 2 per share on the equity shares of face value of H 2/- each pertaining to FY 2022-23, post approval by the members in the 36th AGM held on 19th July, 2023. The Board of Directors had declared an interim dividend of H 2 per share on equity share of face value of H 2 each at their meeting held on January 20, 2024 and paid subsequently.

Note 20.3 : The Board of Directors, have recommended final dividend of H 4/- per equity share, this proposed dividend is subject to the approval of the members at the ensuing AGM. According to the requirements of Ind AS 10- Events occurring after Balance sheet date, the dividend declared shall only be recognised as a liability in the books of account in the year in which the dividends are declared on approval by members. The total estimated dividend on equity shares to be paid is H 5,326.17 lakhs.

Note 35:

During the financial year ended 31st March 2024 the Company has not created DTL on special reserve due to differences in treatment of deferred tax on special reserves between Non-Banking Financial Company -Housing Finance Company (Reserve Bank) Directions, 2021 and Ind AS 12 "Income Taxes".

Note 37 Employee Benefit Expenses

Defined Benefit Plans:

1. Gratuity is an Employee Benefit payable on retirement / superannuation / resignation on completion of 5 years of service.

2. Privilege Leave is an employee benefit wherein confirmed Officer/Employee is entitled to 30 days of PL every year, which can be accumulated upto a maximum of 240 days.

3. Provident Fund is a statutory employee benefit wherein contributions are made by the employee and employer in prescribed proportion.

4. Sick Leave is a Benefit, which an Officer/Employee is entitled to 15 days in a year, which can be accumulated upto a maximum of 270 days.

5. Leave Fare Concession is an employee benefit wherein all confirmed Employees/Officers are entitled once in two years.

Sensitivity Analysis

The sensitivity analysis presented below 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 reporting year, which is same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Note 40.1

In compliance with RBI notification number RBI/DNBS/2016-17/49/Master Direction DNBS. PPD.01/66.15.001/2016- 17 dated September 29, 2016, the Company has reported frauds in 10 branches involving 55 loan accounts amounting to H 1646.43 lakhs (Previous year 26 cases amounting to H 285.83 lakhs) to NHB during the current year.

Note 41 Financial Risk Management

i) Credit Risk

It is defined as the inability or unwillingness of the counterparty to meet the commitment in relation to lending, trading, hedging, settlement and other financial transactions. Also it is defined as the possibility of losses associated with diminution in the credit quality of borrowers or counter parties. The Credit policy articulates credit risk strategy to effectively communicate it throughout the company and all relevant personnel to understand company's approach to grant of credit. The Policy covers products/borrower category, frame work for appraisal process, guidelines for takeover of accounts, entry level matrix (credit scoring system) and flexibility in pricing, dispensation of credit, monitoring and review mechanism, limit structure/prudential exposure levels, reporting frame work. The Company has put in place a proper Loan Review Mechanism with responsibilities assigned in various areas such as, evaluating the effectiveness of loan administration, maintaining the integrity of credit grading process, assessing the loan loss provision, portfolio quality, etc. Credit grading involves assessment of credit quality, identification of problem loans, and assignment of risk ratings. Monitoring is being done through guidelines to branches; follow up by overseeing executives and other regular follow up.

As at balance sheet date, the Company does not have significant concentration of credit risk (Refer Note 46.10(ii)).

ECL Model and Assumptions considered in the ECL model

Markov chain model is used for estimating the probability of default on loans receivable. In a Markov chain model for loans receivable an account moves through different delinquency states each month. For example, an account in the "Regular" state this month will continue to be in the "Regular" state next month if a payment is made by the due date and will be in the "30 days past due" state if no payment is received during that month.

The transition matrix in the Markov chain represents the period-by-period movement of receivables between delinquency classifications or states. The transition evaluates loan quality or loan collection practice. The matrix elements are commonly referred to as "roll-rates" since they denote the probability that an account will move from one state to another in one period. The transition matrix is sometimes referred to as the "roll-rate matrix" or the "delinquency movement matrix".

The loan portfolio for the past several months are analysed to arrive at the transition matrix. Each loan identified by the Loan ID is traced to find out how the loan has performed over the last several months. The days past due is grouped into 6 states as follows: A. Regular [0 days past due] B. 1 to 30 days past due C. 31 to 60 days past due D. 61 to 90 days past due E. 91 to 120 days past due F. Above 120 days past due.

No significant increase in credit risk [Stage 1]: Based on Markov model, the monthly normalized transition matrix is converted into a 12-month transition matrix for determining the probability of default for those loan accounts on which the risk has not increased significantly from the time the debt is originated. We use the same criteria mentioned in the standard and assume that when the days past due exceeds '30 days', the risk of default has increased significantly. Therefore, for those loans for which the days past due is not more than 30 days, one-year default probability is considered. The probability of default is arrived at to determine the quantum of the loan that is likely to move into the states '90 days past due' and greater. After analysing the historical behaviour pattern of the days past due, we are of the opinion that probability of default should be arrived based on the sum of the matrix that is likely to move into the state '60 days past due'.

Significant increase in credit risk [Stage 2]: The credit risk is presumed to have increased significantly for loans that are more than 30 days past due and not more than 90 days past due. For such loans, lifetime default probability should be considered. Based on the maturity date of the loan, the probability of default is arrived at to determine the quantum of the loan that is likely to move into the states '90 days past due' and greater. After analysing the historical behaviour pattern of the days past due, we are of the opinion that probability of default should be arrived based on the sum of the matrix that is likely to move into the state '60 days past due'. The respective transition matrix is used to find out the transition matrix applicable for the loan considering the maturity date of such loan.

The probability of default (PD) of a loan which is less than 30 days past due is represented by the one-year transition matrix as explained above. This PD is used to measure the quantum of the loan that is likely to move into the states 90

days past due and above over the next 12 months. The respective PD multiplied by the exposure at default (EAD) would give us the quantum of the loan that would move into the each of the 6 states* over the next 12 months. Typically, the sum total of all the values of the states representing 90 days past due or higher would be the quantum of amount defaulted. However, we have considered the PD to be the sum of all the values of the states representing 60 days past due or higher.

Exposure at default

The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the impairment calculation, addressing both the client's ability to increase its exposure while approaching default and potential early repayments too.

Probabity of Default

Probability of default is the probability of whether borrowers will default on their obligations which are calculated based on historical default rate summary of past years.

Loss Given Default

LGD: The loans are secured by adequate property. The present value of such collateral property is considered while calculating the Expected Credit Loss. The Company initiates recovery process of Non Performing accounts within the statutory time limit as per SARFAESI and other applicable laws and accordingly the realizable period has been considered for computing the Realisable Present Value of Collateral.

ii) Financial Risk

The market risk is the possibility of loss to the Company prices of security due to changes in the market factors, mainly the changes in interest rates, and competition. It is the risk to the Company's earnings and capital due to the changes in the market interest rates. Market Risk also includes company's ability to meet its obligations as and when due. The limited avenues at the disposal of the Company for raising low cost/cost effective resources and our operating on thin spreads make market risk management all the more significant. The Company has an Investment Policy/ Borrowing Policy in place which addresses the Market Risk which defines safety and liquidity will have preference over returns. Our majority of investment is by way of Bank Deposits and Govt. securities for the purpose of maintenance of SLR as prescribed by NHB. All these deposits are held to maturity. There is an ALM Committee of Executives at RO (ALCO), which functions as the operational unit for managing the balance sheet and asset liability mismatches. All the borrowing decisions and raising short term funds in the form of Non Convertible Debentures, Commercial Papers, Securitization and such other modes, are taken at appropriate level as per the Board approved policy on borrowings. Refer Note 5.8 for Asset Liability Management.

The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31,2024, March 31,2023.

Probability of loss arising from a situation where (1) there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, (2) sale of illiquid assets will yield less than their fair value, or (3) illiquid assets will not be sold at the desired time due to lack of buyers. ALM Policy is in place which has set prudential limits for structural liquidity and interest rate risk. The ALCO committee of the Company analyzes the ALM position of the Company as at the end of each quarter and appraises the Board the ALM position of the respective quarters along with the proposed measure to improve the ALM position.

Earnings risk is the danger that income may fluctuate due to changes in economic conditions or other factors. It is also the potential negative impact on the net interest income. The risk refers to vulnerability to movement in interest rates. Changes in interest rates effects earning, value of asset and cash flow. Asset Liability Management Committee (ALCO) meets at periodical intervals and assesses the earning risk and gives proper directions to the management to improve the NIM. Company shall monitor the income earned by way of interest and other income at quarterly intervals and place suitable notes to Board while placing notes on quarterly/half yearly/annual financial results of the Company. The limited avenues at the disposal of the Company for raising low cost/cost effective resources and our operating on thin spreads make market risk management all the more significant. The credit rating of our borrowings also have a significant impact on our net interest margin. Refer Note 46.4 for credit rating details.

Note 42: Capital Management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company's objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

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 Board shall have the overall responsibility for management of liquidity risk. The Board shall decide the strategy, policies and procedures of the Company to manage liquidity risk in accordance with the liquidity risk tolerance/ limits decided by it.

The Risk Management Committee, which reports to the Board and consisting of Chief Executive Officer (CEO)/ Managing Director, Chief Risk Officer (CRO) and heads of various verticals, shall be responsible for evaluating the overall risks faced by the Company including liquidity risk.

The ALCO, consisting of the Company's top management shall be responsible for ensuring adherence to the risk tolerance/limits set by the Board as well as implementing the liquidity risk management strategy of the Company. The role of the ALCO with respect to liquidity risk should include, inter alia, decision on desired maturity profile and mix of incremental assets and liabilities, sale of assets as a source of funding, the structure, responsibilities and controls for managing liquidity risk.

The Board shall have the overall responsibility for management of liquidity risk. The Board shall decide the strategy, policies and procedures of the Company to manage liquidity risk in accordance with the liquidity risk tolerance/ limits decided by it.

The Risk Management Committee, which reports to the Board and consisting of Chief Executive Officer (CEO)/ Managing Director, Chief Risk Officer (CRO) and heads of various verticals, shall be responsible for evaluating the overall risks faced by the Company including liquidity risk.

The ALCO, consisting of the Company's top management shall be responsible for ensuring adherence to the risk tolerance/limits set by the Board as well as implementing the liquidity risk management strategy of the Company. The role of the ALCO with respect to liquidity risk should include, inter alia, decision on desired maturity profile and mix of incremental assets and liabilities, sale of assets as a source of funding, the structure, responsibilities and controls for managing liquidity risk.

Note 48 Corporate Social Responsibility (CSR)

The Company constituted a Corporate Social Responsibility (CSR) Committee of the Board as prescribed under Section 135 of the Companies Act 2013 and has put the CSR policy in place. The Company has focussed in Promoting education including special education for tribal students, Construction of class room blocks for Government schools, construction of toilet blocks in the Government Schools, providing Stationeries and furniture's to Government schools, setting up of Mini Science Labs (TINKER Labs), Vocational training, Skill enhancement programmes, renovation of Anganawadis, Scholarships for under privileged and girl child education, providing sanitation and drinking water facility under the welfare measures to Government Schools, Government Hospitals, Police stations . The Company also focuses on strengthening the healthcare by providing medical equipment and machineries to Primary Health Centers in Rural Areas, supported old age homes, orphanages and residential homes for differently abled people and for installation of Solar Roof Top systems.

further, the Company has also provided Veterinary equipment and machineries to carryout rescue, treatment and rehabilitation to injured animals, renewable energy sources by setting up solar power capacity at government schools and Solar Lighting systems to various villages, Conservation of Natural resources by Installing RO water purification, welfare measures, women empowerment and sports.

The activities undertaken by the Company under CSR is Pan India basis and the projects are executed by Registered Office and our branches in those areas. The total amount/ budget under CSR for the FY 2023-24 was H 1384.45 lakhs. The total amount spent under the CSR activities in FY 2023-24 is H 723.57 lakhs. The balance amount of H 668.43 lakhs which is already sanctioned in the FY 2023-24 is transferred to unspent CSR Account as per provisions of Companies Act and will be disbursed as per the progress of the work. A summary of CSR details as on March 31,2024 is given below:

Note 49

During the year, there were non-borrower frauds in certain branches amounting to H 4,050.71 Lakhs on account of misuse of

cheque signing authority by certain staff of the Company, issue of duplicate equity share certificate of the Company by the

Registrar and Transfer Agency and anomalies in accounting transactions in book of accounts are reported as Other Receivables

in Note 7 of the financial statements. The company has fully provided for the said amounts.

Note 49.1

There is no divergence in Asset Classification and Provisioning as per National Housing Bank and the HFC.

Note 49.2

In respect of Corporate Governance Disclosures as required by Master Direction Non-Banking Financial Company - Housing

Finance Company (Reserve Bank) Directions, 2021, Refer to the Board Report.

Note 50 Other Disclosures

i) There is no income which is required to be 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.

ii) The Company has not been declared willful defaulter by any Banks/Financial Institutions.

iii) The Company has not traded or invested in Crypto currency or Virtual currency during the year.

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

v) There are no transaction with struck off companies during the current and previous year.

vi) The Code on Social Security 2020 (""the Code"") relating employee benefits, during the employment and post employment, has received presidnetial assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are yet to be issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

vii) 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 person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (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 Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 50.1: Previous years figures have been re-arranged/ regrouped wherever necessary to correspond with the current year's classification/disclosure