Notes to Accounts of Satin Creditcare Network Ltd.

Mar 31, 2025

m) Provisions, contingent assets and contingent
liabilities

Provisions are recognized only when there is a present
obligation, as a result of past events, and when a
reliable estimate of the amount of obligation can
be made at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect
the current best estimates. Provisions are discounted
to their present values, where the time value of money
is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only
by future events not wholly within the control of
the Company or

• Present obligations arising from past events where
it is not probable that an outflow of resources will
be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot
be made.

Contingent assets are not recognized but disclosed
where an inflow of economic benefits is probable.

n) Leases

Company as a lessee

A lease is defined as ''a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset)
for a period of time in exchange for consideration’. To
apply this definition the Company assesses whether

the contract meets three key evaluations which are
whether:

• the contract contains an identified asset, which
is either explicitly identified in the contract or
implicitly specified by being identified at the time
the asset is made available to the Company

• the Company has the right to obtain substantially
all of the economic benefits from use of the
identified asset throughout the period of use,
considering its rights within the defined scope of
the contract the Company has the right to direct
the use of the identified asset throughout the
period of use.

The Company assess whether it has the right to
direct ''how and for what purpose’ the asset is used
throughout the period of use.

At lease commencement date, the Company
recognizes a right-of-use asset and a lease liability on
the balance sheet. The right-of-use asset is measured
at cost, which is made up of the initial measurement
of the lease liability, any initial direct costs incurred by
the Company, an estimate of any costs to dismantle
and remove the asset at the end of the lease, and
any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Company depreciates the right-of-use assets on a
straight-line basis from the lease commencement date
to the earlier of the end of the useful life of the right-of-
use asset or the end of the lease term. The Company
also assesses the right-of-use asset for impairment
when such indicators exist.

At the commencement date, the Company measures
the lease liability at the present value of the lease
payments unpaid at that date, discounted using the
interest rate implicit in the lease if that rate is readily
available or the Company’s incremental borrowing rate.
Subsequent to initial measurement, the liability will
be reduced for payments made and increased for
interest. It is remeasured to reflect any reassessment
or modification, or if there are changes in in-substance
fixed payments. When the lease liability is remeasured,
the corresponding adjustment is reflected in the right-
of-use asset, or profit and loss if the right-of-use asset
is already reduced to zero.

The Company has elected to account for short-term
leases and leases of low-value assets using the
practical expedients. Instead of recognising a right-of-
use asset and lease liability, the payments in relation to
these are recognized as an expense in profit or loss on
a straight-line basis over the lease term.

Determining the lease term of contracts with renewal
and termination options where Company is lessee

The Company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.

The Company has several lease contracts that include
extension and termination options. The Company
applies judgement in evaluating whether it is reasonably
certain whether or not to exercise the option to renew
or terminate the lease. That is, it considers all relevant
factors that create an economic incentive for it to
exercise either the renewal or termination.

o) Financial instruments

A Financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Initial recognition and measurement
Financial assets and financial liabilities are recognized
when the Company becomes a party to the contractual
provisions of the financial instrument and are
measured initially at fair value adjusted for transaction
costs. Subsequent measurement of financial assets
and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement

i. Financial assets carried at amortized cost - a

financial asset is measured at the amortized cost
if both the following conditions are met:

• The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

• Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.

After initial measurement, such financial assets
are subsequently measured at amortized cost
using the effective interest rate (EIR) method.
Amortized cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortization is included in interest
income in the Statement of Profit and Loss.

ii. Financial assets are measured at FVOCI: - a
financial asset is measured at the FVOCI if both
the following conditions are met:

• The instrument is held within a business
model, the objective of which is achieved by
both collecting contractual cash flows and
selling financial assets

• The contractual terms of the financial asset
meet the SPPI test

FVOCI debt instruments are subsequently
measured at fair value with gains and losses
arising due to changes in fair value recognized
in OCI. Interest income are recognized in profit or
loss in the same manner as for financial assets
measured at amortized cost.

Investment in security receipts issued by trust
floated by asset reconstruction companies
are accounted for at fair value through other
comprehensive income (FVOCI).

iii. Investments in equity instruments - Investments
in equity instruments which are held for trading
are classified as at fair value through profit or
loss (FVTPL). For all other equity instruments,
the Company makes an irrevocable choice upon
initial recognition, on an instrument by instrument
basis, to classify the same either as at fair value
through other comprehensive income (FVOCI) or
fair value through profit or loss (FVTPL). Amounts
presented in other comprehensive income are
not subsequently transferred to profit or loss.
However, the Company transfers the cumulative
gain or loss within equity. Dividends on such
investments are recognized in profit or loss unless
the dividend clearly represents a recovery of part
of the cost of the investment.

iv. Investments in mutual funds - Investments in
mutual funds are measured at fair value through
profit and loss (FVTPL).

v. Financial assets measured at FVTPL - FVTPL

is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria
for categorization as at amortized cost or as
FVTOCI, is classified as at FVTPL, with all changes
recognized in profit and loss.

De-recognition of financial assets
Financial assets (or where applicable, a part of financial
asset or part of a group of similar financial assets)
are de-recognized (i.e. removed from the Company’s
balance sheet) when the contractual rights to receive
the cash flows from the financial asset have expired, or
when the financial asset and substantially all the risks
and rewards are transferred. Further, if the Company
has not retained control, it shall also de-recognize the

financial asset and recognize separately as assets or
liabilities any rights and obligations created or retained
in the transfer.

Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all non-derivative
financial liabilities are measured at amortized cost
using the effective interest method.

De-recognition of financial liabilities

A financial liability is de-recognized when the obligation
under the liability is discharged or cancelled or expired.
When an existing financial liability is replaced by another
from the same lender on substantially different terms,
or the terms of an existing liability are substantially
modified, such an exchange or modification is treated
as the de-recognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognized in the
Statement of Profit and Loss.

Financial Guarantees

Financial guarantees are initially recognized at fair
value. Subsequently, the liability is measured at the
higher of the amount of loss allowance determined as
per impairment requirements of Ind AS 109 and the
amount recognized less cumulative amortization.

The premium received (if any) is recognized as income
on a straight-line basis over the life of the guarantee.
Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle the
liabilities simultaneously.

Derivative contracts

The Company enters into certain derivative contracts
to hedge risks which are not designated as hedges.
Such contracts are accounted for at fair value through
profit and loss using mark to market information.

Fair value measurement

The Company measures financial instruments at
fair value at each balance sheet date using valuation
techniques. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at
the measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

a) In the principal market for the asset or liability, or

b) In the absence of a principal market, in the most
advantageous market for the asset or liability.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs. All assets
and liabilities for which fair value is measured are
categorized with fair value hierachy into Level I, Level II
and Level III based on level of input.

p) Foreign currency

Functional and presentation currency

Items included in the financial statement of the
Company are measured using the currency of the
primary economic environment in which the entity
operates (''the functional currency’). The financial
statements have been prepared and presented in Indian
Rupees (INR), which is the Company’s functional and
presentation currency.

Transactions and balances

Foreign currency transactions are translated into
the functional currency, by applying the exchange
rates on the foreign currency amounts at the date of
the transaction. Foreign currency monetary items
outstanding at the balance sheet date are converted
to functional currency using the closing rate. Non¬
monetary items denominated in a foreign currency
which are carried at historical cost are reported using
the exchange rate at the date of the transaction.
Exchange differences arising on monetary items on
settlement, or restatement as at reporting date, at
rates different from those at which they were initially
recorded, are recognized in the Statement of Profit and
Loss in the year in which they arise.

q) Significant management judgement in applying
accounting policies and estimation uncertainty

The preparation of the Company’s financial statements
requires management to make judgements, estimates
and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the
related disclosures. Actual results may differ from
these estimates.

Significant management judgements
Recognition of deferred tax assets - The extent to
which deferred tax assets can be recognized is based
on an assessment of the probability of the future
taxable income against which the deferred tax assets
can be utilized.

Business model assessment - The Company
determines the business model at a level that reflects
how groups of financial assets are managed together
to achieve a particular business objective. This
assessment includes judgement reflecting all relevant
evidence including how the performance of the assets
is evaluated and their performance measured, the risks
that affect the performance of the assets and how these
are managed and how the managers of the assets are
compensated. The Company monitors financial assets
measured at amortized cost that are derecognized
prior to their maturity to understand the reason for their
disposal and whether the reasons are consistent with
the objective of the business for which the asset was
held. Monitoring is part of the Company’s continuous
assessment of whether the business model for which
the remaining financial assets are held continues to be
appropriate and if it is not appropriate whether there
has been a change in business model and accordingly
prospective change to the classification of those
assets are made.

Evaluation of indicators for impairment of assets

- The evaluation of applicability of indicators of
impairment of assets requires assessment of several
external and internal factors which could result in
deterioration of recoverable amount of the assets.

Expected credit loss (‘ECL'') - The measurement of
expected credit loss allowance for financial assets
measured at amortized cost requires use of complex
models and significant assumptions about future
economic conditions and credit behaviour (e.g.
likelihood of customers defaulting and resulting
losses). The Company makes significant judgements
with regard to the following while assessing expected
credit loss:

• Determining criteria for significant increase in
credit risk;

• Establishing the number and relative weightings
of forward-looking scenarios for each type of
product/market and the associated ECL; and

• Establishing groups of similar financial assets for
the purposes of measuring ECL.

Provisions - At each balance sheet date basis of the
management judgment, changes in facts and legal
aspects, the Company assesses the requirement
of provisions against the outstanding contingent
liabilities. However, the actual future outcome may be
different from this judgement.

Significant estimates

Useful lives of depreciable/amortizable assets -

Management reviews its estimate of the useful lives
of depreciable/amortizable assets at each reporting
date, based on the expected utility of the assets.
Uncertainties in these estimates relate to technical and
economic obsolescence that may change the utility of
assets.

Defined benefit obligation (DBO) - Management s
estimate of the DBO is based on a number of underlying
assumptions such as standard rates of inflation,
mortality, discount rate and anticipation of future
salary increases. Variation in these assumptions may
significantly impact the DBO amount and the annual
defined benefit expenses.

Fair value measurements - Management applies
valuation techniques to determine the fair value of

financial instruments (where active market quotes are
not available). This involves developing estimates and
assumptions consistent with how market participants
would price the instrument.

r) Statement of Cash Flows

Statement of Cash Flows is prepared segregating the
cash flows into operating, investing and financing
activities. Cash flow from operating activities is
reported using indirect method adjusting the net profit
for the effects of:

I. Changes during the period in operating receivables
and payables transactions of a non-cash nature;

II. Non-cash items such as depreciation, provisions,
deferred taxes, unrealized foreign currency gains
and losses; and

III. All other items for which the cash effects are
investing or financing cash flows.

^: i) During the year ended March 31, 2024, pursuant to the approval accorded by the Board of Directors of the

Company ("the Board"), at its meeting held on October 19, 2023 and the special resolution passed by the
shareholders of the Company at the Extra Ordinary General Meeting (EGM) held on November 27, 2023, the
Fund Raising Committee of the Board at its meeting held on December 14, 2023 had approved the Qualified
Institutions Placement of equity shares of face value of INR 10 each of the Company.

Subsequently, the Fund Raising Committee at its meeting held on December 19, 2023 had approved the allotment
of 1,08,36,584 equity shares of face value of INR 10 each to eligible qualified institutional buyers at the issue
price of INR 230.70 per equity share (including a premium of INR 220.70 per equity share) aggregating to INR
25,000.00 Lakh.

ii) During the year ended March 31,2024, the Company has allotted 1,44,10,256 equity shares of face value of INR
10/- each to Trishashna Holdings & Investments Private Ltd’ (THIPL) (entity belonging to promoter group) and
Florintree Ventures LLP (entity belonging to non-promoter group) pursuant to conversion of Fully Convertible
Warrants of INR 10 each at issue price of INR 81.25 per warrant including premium of INR 71.25 per warrant.

Nature and purpose of other reserve
Capital redemption reserve

The same had been created in accordance with provisions of the Companies Act 2013 on account of redemption of
preference shares.

Share options outstanding account

The reserve is used to recognize the fair value of the options granted to employees of the Company and subsidiary
companies under the Company’s employees stock option plans.

Statutory reserve

The reserve is created as per the provision of Section 45(IC) of the Reserve Bank of India Act, 1934. This is a restricted
reserve and no appropriation can be made from this reserve fund except for the purpose as may be prescribed by the
Reserve Bank of India.

General reserve

The Management has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the
provision of erstwhile Companies Act.

Securities premium

Securities premium represents premium received on issue of shares. The amount is utilised in accordance with the
provisions of the Companies Act, 2013.

Retained earnings

This represents undistributed accumulated earnings of the Company as on the balance sheet date.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value
through other comprehensive income.

Changes in fair value of loan assets

This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business
model of hold and hold to collect and sell.

B Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statements and are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:

The categories used are as follows:

Level 1: Quoted prices (unadjusted) for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1
inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the
consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial
instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask
prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include
discounted cash flow method, market comparable method, recent transactions happened in the Company and other
valuation models. The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

(c) The value of derivative contracts are determined using mark to market value shared by contracting bank at
balance sheet date.

(d) The use of net asset value for security receipts on the basis of the value declared by investee party.

(e) The use of net asset value for government securities on the basis of the value declared by government.

(f) The use of valuation report obtained from registered valuer for investment in subsidiaries.

B.2 Fair value of instruments measured at amortized cost

Fair value of instruments measured at amortized cost for which fair value is disclosed is as follows, these fair
values are calculated using Level 3 inputs:

Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Eligible loans valued by discounting the aggregate future cash flows (both principal and interest cash flows)
with discount rate that commensurate with the risk inherent in the expected cash flows for the remaining
portfolio tenor.

(b) The use of net asset value for certificate of deposits and mutual funds on the basis of the statement
received from investee party.

The management assessed that fair values of cash and cash equivalents, other bank balances, trade receivables,
other financial assets, trade payables, other payables and other financial liabilities approximate their respective
carrying amounts, largely due to the short-term maturities of these instruments. The following methods and
assumptions were used to estimate the fair values for other assets and liabilities:

(i) The fair values of the Company’s fixed interest bearing loans are determined by applying set of discount
rates and then averaged out to arrive at the fair value.

(ii) The fair values of the Company’s fixed rate interest-bearing debt securities, borrowings and subordinated
liabilities are determined by applying discount rate that reflects the issuer’s borrowing rate as at the end
of the reporting period. For variable rate interest-bearing debt securities, borrowings and subordinated
liabilities, carrying value represent best estimate of their fair value as these are subject to changes in
underlying interest rate indices as and when the changes happen.

44 | FINANCIAL RISK MANAGEMENT
i) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board
overall responsibility for the establishment and oversight of the Company risk management framewori
manages the risk basis policies approved by the board of directors. The board of directors provide
overall risk management. This note explains the sources of risk which the entity is exposed to anc
manages the risk and the related impact in the financial statements.

Risk Exposure arising from Measurement Risk manageme

Credit risk Cash and cash equivalents Credit limit, ageing Highly rated bar

(excluding cash on hand), other analysis, default rate, diversification i

In order to avoid excessive concentration of risk, the Company’s policies and procedures include specific guidelines
to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed
accordingly.

A) Credit risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their
contractual obligations. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, other
bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously
monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.
a) Credit risk management

Based on business environment in which the Company operates, a default on a financial asset is considered
when the counter party fails to make payments within the agreed time period as per contract. The Company
assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for
each class of financial instruments with different characteristics. The Company has established a credit quality
review process to provide early identification of possible changes in the creditworthiness of counterparties,
including regular collateral revisions. The Company assigns the following credit ratings to each class of financial
assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

* These represent gross carrying values of financial assets, without netting off impairment loss allowance.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only
accepting highly rated deposits from banks and financial institutions across the country.

Trade receivables

Trade receivables measured at amortized cost and credit risk related to these are managed by monitoring the
recoverability of such amounts continuously.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits,
insurance claim receivables and other recoverable. Credit risk related to these other financial assets is managed by
monitoring the recoverability of such amounts continuously.

Loans

The Company closely monitors the credit-worthiness of the borrower’s through internal systems and appraisal
process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk by setting limits
on the amount of risk it is willing to accept for individual counterparties. These processes include a detailed appraisal
methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company
assesses increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default
is considered to have occurred when amounts receivable become 90 days past due.

Wherever required, the Company holds other types of collateral and credit enhancements, such as cross¬
collateralisation on other assets of the borrower, pledge of securities, guarantees of promoters/proprietors,
hypothecation of receivables via escrow account, hypothecation of receivables in other bank accounts, etc.

The Company does not physically possesses properties or other assets in its normal course of business but
makes efforts toward recovery of outstanding amounts on delinquent loans. Once contractual loan repayments
are overdue, the Company initiate the legal proceedings against the defaulted customers.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities (other than derivatives) that are settled by delivering cash or another financial asset. The Company’s
approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities
when they are due.

The Company maintains flexibility in funding by maintaining availability under committed credit lines. Management
monitors the Company’s liquidity positions (also comprising the undrawn borrowing facilities) and cash and cash
equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which
the entity operates.

(ii) Maturities of financial assets and liabilities

The tables below analyses the Company financial assets and liabilities into relevant maturity groupings based on their
contractual maturities. The table below shows an analysis of assets and liabilities analysed according to when they
are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months,
regardless of the actual contractual maturities of the products. With regard to loans and advances to customers, the
Company uses the same basis of expected repayment behaviour as used for estimating the EIR. Issued debt reflect
the contractual coupon amortizations.

C) Market risk

a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange
risk arises from recognized assets and liabilities denominated in a currency that is not the functional currency of
the Company. To mitigate the Company’s exposure to foreign currency risk, non-rupee cash flows are monitored
and derivative contracts are entered into in accordance with the Company’s risk management policies. Currency
risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
Foreign currency risk arise majorly on account of foreign currency borrowings. The Company manages its foreign
currency risk by entering in to cross currency swaps, interest rate swaps and forward contract. When a derivative
is entered in to for the purpose of being as hedge, the Company negotiates the terms of those derivatives to
match with the terms of the hedge exposure.

b) Interest rate risk
i) Liabilities

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or
the fair values of financial instruments. ''The Company’s policy is to minimise interest rate cash flow risk
exposures on long-term financing. As at March 31, 2025, the Company is exposed to changes in market
interest rates through debt securities, other borrowings and subordinated liabilities at variable interest
rates.

45 | CAPITAL MANAGEMENT

The primary objectives of the Company’s capital management policy is to ensure that the Company complies with capital
adequacy requirements required by the Reserve Bank of India and maintains strong credit ratings and healthy capital ratios
in order to support its business and to maximise shareholder value.

The Company’s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to comply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure
while avoiding excessive leverage. This takes into account the sub-ordination levels of the Company’s various classes
of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets (including investments in Subsidiary companies). In order
to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, or sell assets to reduce debt.

The Company records a liability when it is both probable that a loss has been incurred and the amount can be reasonably
estimated. Significant judgement is required to determine both probability and the estimated amount. The Company reviews
these provisions periodically and adjust these provisions accordingly to reflect the impact of negotiations, settlements,
rulings, advice of legal counsel and update information. The Company believes that the amount or estimable range of
reasonably possible loss, will not, either individually or aggregate, have a material adverse effect on its business, financial
position, results of the Company, or cash flows with respect to loss contingencies for legal and other contingencies as at
March 31,2025.

Disputed claims against the Company, including claims raised by the tax authorities and which are pending with appeal /
court and for which no reliable estimate can be made of the amount of the obligation, are not provided for in the accounts.
However, the present obligation, if any, as a result of past events with a possibility of outflow of resources, when reliably
estimable, is recognized in the accounts as an expense as and when such obligation crystallizes.

54 | EMPLOYEE STOCK OPTION PLAN / SCHEME (ESOP/ ESOS)

Pursuant to the approval accorded by Shareholders of Satin Creditcare Network Limited ("the Company") at their Annual
General Meeting held on July 06, 2017, the Nomination and Remuneration Committee of the Company formulated a new
scheme ''Satin Employee Stock Option Scheme 2017’ (ESOS 2017) in accordance with the Securities and Exchange Board
of India (Share Based Employee Benefits) Regulations, 2014 (or any amendment thereto or any other provisions as may
be applicable). ESOS is applicable to all permanent and full-time employees (as defined in the Plan), excluding Promoters
of the Company. The eligibility of employees to receive grants under the Plan has to be decided by the Nomination and
Remuneration Committee from time to time at its sole discretion. Vesting of the options and vesting period shall take place
in the manner determined by the Nomination and Remuneration Committee at the time of grant. Vesting of options shall be
subject to the condition that the Grantee shall be in continuous employment with the Company and such other conditions
as provided under ESOS 2017. The Exercise Price of each grant is determined by the Nomination and Remuneration
Committee at the time of grant.

Presently, stock options have been granted under Satin Employee Stock Option Scheme 2017 (ESOS 2017).

Earlier, the Company had implemented ESOP schemes in 2010, namely Satin ESOP 2010 and Satin ESOP II 2010. These
schemes were subsequently repealed pursuant to the Shareholders’ Resolution dated July 06, 2017, and the outstanding
options under these schemes were transferred to the Satin ESOS 2017.

The ESOP pool under the ESOS 2017 has 4,82,946 Options and Satin Employee Welfare Trust holds 4,82,946 shares
(including the impact of Right Issue) in its Demat account during the year ended March 31,2025.

As on 31 March 2025, under ESOS 2017 the options granted are 85,000 and the balance available ESOS pool for future
grant is 3,97,946 options.

The expected volatility was determined based on historical volatility data of the Company’s shares listed on the
National Stock Exchange of India Limited.

iv) The Company has INR 169.84 Lakhs (March 31, 2024: INR 169.74 Lakhs) recoverable from Satin Employees
Welfare Trust pursuant to ESOP schemes.

v) During the year ended March 31, 2025, the Company has recognized an expense of INR 43.29 lakh (March 31,
2024: INR Nil) towards share based payment expenses in the Statement of Profit and Loss.

55 | RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended on March 31, 2025, MCA has not
notified any new standards or amendments to the existing standards which are applicable from April 01,2025.

Below notes starting from 56 to 58 are non Ind AS information as required by different laws and regulations.

56 | DISCLOSURE AS PER MASTER DIRECTION RBI/DOR/2023-24/105 DOR.FIN.REC.NO.45/03.10.119/2023-24 DATED

OCTOBER 19, 2023 (UPDATED FROM TIME TO TIME) ARE AS UNDER

Disclosure of expected credit loss and provisions required as per Income Recognition and Asset Classification norms;

Qualitative Disclosures

The Company, in accordance with regulations set forth by the Reserve Bank of India for Non-Banking Financial
Companies engaged in Microfinance (NBFC-MFIs), complies with FEMA Regulations, notifications, and circulars
issued for External Commercial Borrowings.

Given the inherent volatilities and uncertainties in the global Foreign Exchange markets, the Company faces
potential risk due to adverse currency movements as it holds foreign currency liabilities. Additionally, the
Company is also exposed to interest rate risk on its long-term Foreign Currency Loans.

To mitigate these risks, the Company has implemented a Forex Risk Management policy aimed at reducing the
probability and potential costs of financial distress by achieving currency and interest rate neutrality.

Under this policy, any exposure in foreign currency is fully hedged covering the currency risk as well as the
interest rate risk on the day of the liability''s emergence. The authority to make decisions regarding the quantum
and tenor of hedging is delegated by the Board committee/Board of Directors as necessary.

Furthermore, the Company adheres to accounting standards and guidance notes issued by the Institute of
Chartered Accountants of India for the recognition of losses, gains, creation of assets, or liabilities.

In addition to these measures, the management conducts monthly monitoring to track gains and losses
recognized. Moreover, foreign currency exposure reporting is provided to the board on an annual basis to ensure
comprehensive oversight.

*The Company has entered into Full Currency Swaps that allows to convert long term FCY liability (Interest and
Principal) to a fixed INR liability.

(iv) (a) Disclosures relating to securitisation:-

The Company has entered into various agreements for the securitisation of loans with assignees, wherein
it has securitized a part of its loans portfolio amounting to INR 79,584.31 Lakhs during the year ended
March 31,2025 (March 31,2024 INR 1,23,480.00 Lakhs), being the principal value outstanding as on the
date of the deals that are outstanding. The Company is responsible for collection and getting servicing
of this loan portfolio on behalf of investors/buyers. In terms of the said securitisation agreements, the
Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual
agreement terms.

9 Pursuant to RBI circular RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001 /2019-20 dated November 04,
2019, Liquidity credit risk disclosures are presented as below:

Qualitative Disclosure on LCR

As per Reserve Bank of India guidelines, all deposit-taking NBFCs irrespective of their asset size and non-deposit¬
taking NBFCs with an asset size of INR5,000 Crores and above are required to maintain a liquidity coverage ratio
(LCR) to ensure availability of adequate high-quality liquid assets (HQLA) to survive any acute liquidity stress
scenario i.e, cash outflow increased to 115% and cash inflow decreased to 75%, lasting for 30 days. As per RBI
guidelines, LCR has been calculated using the simple average of daily observations over the previous quarter
(over a period of 90 days).

Cash outflows under secured and unsecured wholesale funding include contractual payments of the term loan,
NCDs, and other debt obligations including interest payments due in next 30 days. Other contractual funding
obligations include contractual payments due in next 30 days.

To compute inflow from fully performing exposures, the Company considers collection from performing
advances including interest due in the next 30 days. Other cash inflows include cash from unencumbered fixed
deposits, Certificates of deposits, undrawn lines of credit, and mutual fund investments maturing in the next 30
days. The LCR as of March 31,2025 is 130.4%, which is well above the regulatory requirement of 100%.

(vii) Institutional set-up for liquidity risk management

The Company has a robust risk management system in place. To ensure smooth functioning of business
operations, the Company maintains adequate liquidity in the form of cash, bank balances, fixed deposits,
T-Bills and mutual funds. The Board has the ultimate responsibility for the SCNL’s risk management
including liquidity risk.The Board has delegated the oversight and review of liquidity risk management to
the Risk Management Committee of the Board (RMCB) which is supported by Executive Risk Management
Committee (ERMC) and the Asset Liability Management Committee (ALCO). The responsibility of the ALCO
is to manage liquidity risk, ensures compliance with policies, frameworks, internal limits, and regulatory
limits related to ALM and update the same to the board. The Executive Risk Management Committee is
responsible for overseeing the implementation of risk management framework across SCNL and providing
recommendations to the RMCB. ERMC, RMCB, and ALCO meetings are held at periodic intervals.

60 | ADDITIONAL INFORMATION PURSUANT TO MINISTRY OF CORPORATE AFFAIRS NOTIFICATION DATED MARCH 24,

2021 WITH RESPECT TO AMENDMENTS IN SCHEDULE III OF COMPANIES ACT, 2013

(i) All the borrowings of the Company are used for the specific purpose for which it was taken.

(ii) 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 rules made thereunder.

(iii) The Company is not a wilful defaulter as declared by any bank or financial Institution or any other lender.

(iv) The Company reviews transactions on an ongoing basis to identify if there are any transactions with struck off
companies. To the extent information is available on struck off companies, there are no transactions with struck off
companies except as mentioned below.

(v) There are no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory
period.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.

(vii) There are no transactions which are 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).

(viii) The Company has not traded or invested in Crypto currency or Virtual Currency during the current year and previous
year.

61 | Previous year figures have been regrouped/rearranged, wherever considered necessary, to confirm to the classification/
disclosure adopted in the current year.

For J C Bhalla & Co. For and on behalf of the Board of Directors

Chartered Accountants Satin Creditcare Network Limited

Firm’s Registration No. 001111N

Rajesh Sethi Harvinder Pal Singh Satvinder Singh

Partner (Chairman cum Managing Director) (Director)

Membership Number: 085669 DIN: 00333754 DIN: 00332521

Anil Kumar Kalra Manoj Agrawal

(Chairman Audit Committee cum Director) (Chief Financial Officer)

DIN: 07361739

Vikas Gupta

(Company Secretary & Chief Compliance Officer)

Membership Number: A24281

Place : Gurugram Place : Gurugram

Date : May 07, 2025 Date : May 07, 2025

---

Mar 31, 2024

m) Provisions, contingent assets and contingent liabilities

Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

• Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognized but disclosed where an inflow of economic benefits is probable.

n) Leases

Company as a lessee

A lease is defined as ''a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether:

• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Company

• the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract the Company has the right to direct the use of the identified asset throughout the period of use.

The Company assess whether it has the right to direct ''how and for what purpose’ the asset is used throughout the period of use.

At lease commencement date, the Company recognizes a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance

fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.

Determining the lease term of contracts with renewal and termination options where Company is lessee -The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

o) Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognition and measurement Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs. Subsequent measurement of financial assets and financial liabilities is described below.

Non-derivative financial assets Subsequent measurement

i. Financial assets carried at amortized cost - a

financial asset is measured at the amortized cost

if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in interest income in the Statement of Profit and Loss.

ii. Financial assets are measured at FVOCI when both of the following conditions are met: - a financial asset is measured at the FVOCI if both the following conditions are met:

• The instrument is held within a business model, the objective of which is achieved by both collecting contractual cash flows and selling financial assets

• The contractual terms of the financial asset meet the SPPI test

FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value recognized in OCI. Interest income are recognized in profit or loss in the same manner as for financial assets measured at amortized cost.

Investment in security receipts issued by trust floated by asset reconstruction companies are accounted for at fair value through other comprehensive income (FVOCI).

iii. Investments in equity instruments - Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

iv. Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).

v. Financial assets measured at FVTPL - FVTPL

is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL, with all changes recognized in the P&L.

De-recognition of financial assets

Financial assets (or where applicable, a part of financial asset or part of a group of similar financial assets) are de-recognized (i.e. removed from the Company’s balance sheet) when the contractual rights to receive the cash flows from the financial asset have expired, or when the financial asset and substantially all the risks and rewards are transferred. Further, if the Company has not retained control, it shall also de-recognize the financial asset and recognize separately as assets or liabilities any rights and obligations created or retained in the transfer.

Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortized cost using the effective interest method.

De-recognition of financial liabilities A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Derivative contracts

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges. Such contracts are accounted for at fair value through profit and loss using mark to market information.

Fair value measurement

The Company measures financial instruments at fair value at each balance sheet date using valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

a) In the principal market for the asset or liability, or

b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured are categorized with fair value hierachy into Level I, Level II and Level III based on level of input.

p) Foreign currency

Functional and presentation currency

Items included in the financial statement of the Company are measured using the currency of the primary economic environment in which the entity operates (''the functional currency’). The financial statements have been prepared and presented in Indian Rupees (INR), which is the Company’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency, by applying the exchange rates on the foreign currency amounts at the date of the transaction. Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Nonmonetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transaction.

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the Statement of Profit and Loss in the year in which they arise.

q) Significant management judgement in applying accounting policies and estimation uncertainty

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

of revenues, expenses, assets and liabilities, and the related disclosures. Actual results may differ from these estimates.

Significant management judgements Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.

Business model assessment - The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including how the performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these are managed and how the managers of the assets are compensated. The Company monitors financial assets measured at amortized cost that are derecognized prior to their maturity to understand the reason for their disposal and whether the reasons are consistent with the objective of the business for which the asset was held. Monitoring is part of the Company’s continuous assessment of whether the business model for which the remaining financial assets are held continues to be appropriate and if it is not appropriate whether there has been a change in business model and accordingly prospective change to the classification of those assets are made.

Evaluation of indicators for impairment of assets - The

evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Expected credit loss (‘ECL'') - The measurement of expected credit loss allowance for financial assets measured at amortized cost requires use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. likelihood of customers defaulting and resulting losses). The Company makes significant judgements with regard to the following while assessing expected credit loss:

• Determining criteria for significant increase in credit risk;

• Establishing the number and relative weightings of forward-looking scenarios for each type of product/market and the associated ECL; and

• Establishing groups of similar financial assets for the purposes of measuring ECL.

Provisions - At each balance sheet date basis of the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

Significant estimates

Useful lives of depreciable/amortizable assets -

Management reviews its estimate of the useful lives of depreciable/amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of assets.

Defined benefit obligation (DBO) - Management s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may

significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements - Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

r) Statement of Cash Flows

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:

I. Changes during the period in operating receivables and payables transactions of a non-cash nature;

II. Non-cash items such as depreciation, provisions, deferred taxes, unrealized foreign currency gains and losses; and

III. All other items for which the cash effects are investing or financing cash flows.

G Rights, preferences and restrictions

The Company has only one class of equity shares having face value of INR 10 per share. Each equity shareholder is eligible for one vote per fully paid share held. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders or in case of partly paid shares the paid-up amount.

Nature and purpose of other reserve Capital redemption reserve

The same had been created in accordance with provisions of the Companies Act 2013 on account of redemption of preference shares.

Statutory reserve

The reserve is created as per the provision of Section 45(IC) of Reserve Bank of India Act, 1934. This is a restricted reserve and no appropriation can be made from this reserve fund except for the purpose as may be prescribed by Reserve Bank of India. General reserve

The Management has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the provision of erstwhile Companies Act.

Securities premium

Securities premium represents premium received on issue of shares. The amount is utilised in accordance with the provisions of the Companies Act 2013.

Retained earnings

This represents undistributed accumulated earnings of the Company as on the balance sheet date.

Money received against share warrants

During the year ended March 2022, the Company had allotted Fully Convertible Warrants of INR 10 each at issue price of INR 81.25 per warrant including premium of INR 71.25 per warrant (25% of which was paid on allotment of warrant and 75% shall be payable at the time of exercising the warrants) on preferential basis to Trishashna Holdings & Investments Private Ltd (THIPL) (1,23,07,692 warrants) (entity belonging to promoter group) and Florintree Ventures LLP (1,23,07,692 warrants) (entity belonging to non-promoter group) on January 25, 2022. Out of the said warrants 1,02,05,128 warrants (61,02,564 warrants by THIPL and 41,02,564 warrants by Florintree Ventures LLP) were converted during the year ended March 2023 and remaining 1,44,10,256 warrants (62,05,128 warrants by THIPL and 82,05,128 warrants by Florintree Ventures LLP) have been converted during the year ended March 31,2024 upon receipt of balance 75% amount of warrants by respective investors.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income.

Changes in fair value of loan assets

This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business model of hold and hold to collect and sell.

Cash flow hedge reserve

Cash flow hedge reserve is used to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.

B Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statements and are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

The categories used are as follows:

Level 1: Quoted prices (unadjusted) for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method,

PH FINANCIAL RISK MANAGEMENT i) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company manages the risk basis policies approved by the board of directors. The board of directors provides principles for overall risk management. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

A) Credit risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. a) Credit risk management

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. ''The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only accepting highly rated deposits from banks and financial institutions across the country.

Trade receivables

Trade receivables measured at amortized cost and credit risk related to these are managed by monitoring the recoverability of such amounts continuously.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits, insurance claim receivables and other recoverable. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

Loans

The Company closely monitors the credit-worthiness of the borrower''s through internal systems and appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default is considered to have occurred when amounts receivable become 90 days past due.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities (other than derivatives) that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. The Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors the Company''s liquidity positions (also comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity operates.

(ii) Maturities of financial assets and liabilities

The tables below analyzes the Company financial assets and liabilities into relevant maturity groupings based on their contractual maturities. The table below shows an analyzis of assets and liabilities analyzed according to when they are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months, regardless of the actual contractual maturities of the products. With regard to loans and advances to customers, the Company uses the same basis of expected repayment behaviour as used for estimating the EIR. Issued debt reflect the contractual coupon amortizations.

C) Market risk a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the functional currency of the Company. To mitigate the Company’s exposure to foreign currency risk, non-rupee cash flows are monitored and derivative contracts are entered into in accordance with the Company’s risk management policies. Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk arise majorly on account of foreign currency borrowings. The Company manages its foreign currency risk by entering in to cross currency swaps and forward contract. When a derivative is entered in to for the purpose of being as hedge, the Company negotiates the terms of those derivatives to match with the terms of the hedge exposure.

1E1 CAPITAL MANAGEMENT

The primary objectives of the Company’s capital management policy is to ensure that the Company complies with capital adequacy requirements required by the Reserve Bank of India and maintains strong credit ratings and healthy capital ratios in order to support its business and to maximize shareholder value.

The Company’s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to comply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the sub-ordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets (including investments in Subsidiary companies). In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

TTH TRANSFERRED FINANCIAL ASSETS

In the course of its micro finance activity, the Company makes transfers of financial assets, where legal rights to the cash flows from the asset are passed to the counterparty and where the Company retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty.

The Company has securitized its loan assets to unrelated and unconsolidated entities. As per the terms of the agreements, the Company is exposed to first loss default guarantee in range of 12% to 20% of the amount securitized and therefore continues to be exposed to significant risk and rewards relating to the underlying loan receivables. Hence, these loan assets are not derecognized and proceeds received are presented as borrowings.

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

E4B EMPLOYEE STOCK OPTION PLAN / SCHEME (ESOP/ ESOS)

Pursuant to the approval accorded by Shareholders of Satin Creditcare Network Limited (Company) at their Annual General Meeting held on July 06, 2017, the Nomination and Remuneration Committee of the Company formulated a new scheme ''Satin Employee Stock Option Scheme 2017’ (ESOS 2017) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (or any amendment thereto or any other provisions as may be applicable). ESOS is applicable to all permanent and full-time employees (as defined in the Plan), excluding Promoters of the Company. The eligibility of employees to receive grants under the Plan has to be decided by the Nomination and Remuneration Committee from time to time at its sole discretion. Vesting of the options and vesting period shall take place in the manner determined by the Nomination and Remuneration Committee at the time of grant. Vesting of options shall be subject to the condition that the Grantee shall be in continuous employment with the Company and such other conditions as provided under ESOS 2017. The Exercise Price of each grant is determined by the Nomination and Remuneration Committee at the time of grant.

There were no grants existed during the year ended March 31,2024 (previous year: Nil). Hence, other disclosures under Ind AS 102 are not applicable.

However, the ESOP pool under the ESOP 2017 has a balance of 4,82,946 Options available for future grants and Satin Employee Welare Trust holds 4,82,946 shares (including the impact of Right Issue) in its demat account during the year ended March 31, 2024.

The Company has INR 169.74 Lakhs (March 31, 2023: INR 169.69 Lakhs) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes. Satin Employees Welfare Trust is holding 4,82,946 fully paid up equity shares of INR 10 each of the Company.

1551 RECENT ACCOUNTING PRONOUNCEMENTS:

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended on March 31,2024, MCA has not notified any new standards or amendments to the existing standards which are applicable from April 01,2024.

Below notes starting from 56 to 60 are non Ind AS information as required by different laws and regulations.

56.| Disclosure as per Master Direction RBI/DoR/2023-24/105 DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 (updated from time to time) are as under:-

Qualitative Disclosures

The Company, in accordance with regulations set forth by the Reserve Bank of India for Non-Banking Financial Companies engaged in Microfinance (NBFC-MFIs), complies with FEMA Regulations, notifications, and circulars issued for External Commercial Borrowings.

Given the inherent volatilities and uncertainties in the global Foreign Exchange markets, the Company faces potential risk due to adverse currency movements as it holds foreign currency liabilities. Additionally, the Company is also exposed to interest rate risk on its long-term Foreign Currency Loans.

To mitigate these risks, the company has implemented a Forex Risk Management policy aimed at reducing the probability and potential costs of financial distress by achieving currency and interest rate neutrality.

Under this policy, any exposure in foreign currency is fully hedged covering the currency risk as well as the interest rate risk on the day of the liability''s emergence. The authority to make decisions regarding the quantum and tenor of hedging is delegated by the Board committee/Board of Directors as necessary.

Furthermore, the company adheres to accounting standards and guidance notes issued by the Institute of Chartered Accountants of India for the recognition of losses, gains, creation of assets or liabilities.

In addition to these measures, the management conducts monthly monitoring to track gains and losses recognized. Moreover, foreign currency exposure reporting is provided to the board on an annual basis to ensure comprehensive oversight.

| Previous year figures have been regrouped/rearranged, wherever considered necessary, to conform to the classification/ disclosure adopted in the current year.

For S S Kothari Mehta & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants Satin Creditcare Network Limited

Firm’s Registration No. 000756N/ N500441

Naveen Aggarwal Harvinder Pal Singh Satvinder Singh

Partner (Chairman cum Managing Director) (Director)

Membership Number: 094380 DIN: 00333754 DIN: 00332521

Sanjay Kumar Bhatia Rakesh Sachdeva

(Chairman Audit Committee cum Director) (Chief Financial Officer)

DIN:07033027

Vikas Gupta

(Company Secretary & Chief Compliance Officer)

Membership Number: A24281

Place : Gurugram Place : Gurugram

Date: April 29, 2024 Date: April 29, 2024

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Mar 31, 2023

The Company enters into derivative contracts for risk management purposes.

The table above represents the fair value of derivate financial instruments recorded as assets together with the notional amounts.

The notional amounts indicates the value of transaction outstanding at the year end and are not indicative of either the market risk or credit risk.

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk and interest rate risk. The Company’s risk management strategy and how it is applied to manage risk are explained below.

Derivatives designated as hedging instruments Foreign currency risk

The Company is exposed to foreign currency risk arising from its fixed rate foreign currency borrowing amounting to US $ 9.4 million. Interest on the borrowing is payable at a fixed rate of 5.93% per annum. (on semi-annual basis starting from February 5, 2020) and the principal amount was repaid on August 5, 2022. The Company economically hedged the foreign currency risk arising from the debt with a ‘receive fixed pay fixed’ cross-currency interest rate swap (‘swap’) on July 24, 2019. The notional amount of swap was H 6,487.41 lakhs. The swap contract converted the cash outflows of the foreign currency fixed rate borrowing of US $ 9.4 million to cash outflows in H with a notional amount of H 6,487.41lakhs and fixed interest of 11.18% per annum.

Offsetting

The Company does not have derivative financial assets and financial liabilities which are subject to master netting arrangements. Master netting arrangements are those arrangements wherein in the case of insolvency, derivative financial assets and financial liabilities will be settled on a net basis.

The Company has not entered in to any credit derivative to mitigate the credit risk (if any). investment has been written off and therefore shown at zero value.

~The Board of Directors of Taraashna Financial Services Limited (“TFSL”) and Satin Finserv Limited (“SFL”), in their respective meetings held on August 03, 2021, have considered and approved the Scheme of Arrangement for Amalgamation of TFSL (“Transferor Company”) with SFL (“Transferee Company”) and their respective shareholders and creditors (‘Scheme’) under Sections 230 to 232 of the Companies Act, 2013 (“Act”) and other applicable provisions of the Act and rules made thereunder. Consequently, the first motion application was filed before Hon’ble National Company Law Tribunal (“NCLT”), Chandigarh Bench after obtaining requisite NOCs from shareholders and creditors of TFSL and SFL. The said first motion application was reserved and allowed by the said Hon’ble NCLT on hearing dated April 6, 2022. The said order was pronounced on hearing dated May 17, 2022 by Hon’ble NCLT. Both the companies filed joint second motion application with Hon’ble NCLT on May 25, 2022. The said joint second motion application was admitted by Hon’ble NCLT in its hearing dated July 08, 2022 and issued necessary directions of serving notices and newspapers advertisements. Both the companies have served the notices to government authorities and completed publication in requisite newspapers as per order. The Hon’ble NCLT vide its order dated January 31, 2023 has approved the scheme of amalgamation and the necessary form has been filed to the Registrar of Companies on March 1,2023 which is considered as effective date.

*During the year ended March 31, 2023 the Company has changed its accounting policy for valuation of its investments in 3 wholly owned subsidiaries from cost basis to fair value through profit and loss (FVTPL) basis. The Company believes that this change to fair value through profit and loss (FVTPL) is preferable as it reflects value of the Company’s investment on current market price basis and it is in sync with the cost of funds involved in it and charged to the statement of profit and loss account by the Company. Hence, it provides reliable and more relevant information to the users of financial statements about the Company’s Value of Investment on an on-going basis. In accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors, this change in accounting policy is required to be retrospectively applied to all prior periods presented, unless impracticable to do so. The same has been explored as per below mentioned fact -

Significant assumptions and estimations are involved in the fair valuation of the investments, considering the fact that March 31, 2021 was covid impacted year, when the economic conditions were uncertain, it is not possible for the management to accurately consider the assumptions and estimates in the valuation of investments for that prior period without the use of hindsight. Use of hindsight is not the intention of Ind AS 8. Hence, it is not practicable for the management to calculate the fair valuation of investments for the prior periods.

In view of above, one of the conditions, as given in Ind AS 8, for impracticability is satisfied, hence entity qualifies for the exemption of retrospective application. Therefore, in view of above the change in accounting policy is made effective on a prospective basis from the year ended March 31,2023. Following is the impact .i.e. increase/decrease of the said change in policy on each item of statement of profit and loss for the year ended March 31,2023 :

The Company’s investment properties consist of two residential properties in India. The fair values of the properties are H 828.52 lakhs (March 31,2022 : H 789.06 lakhs). These valuations are based on valuations performed by an independent valuer, the valuer is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. Valuation techniques used by the valuer is fair market value.

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

F During the current financial year, the Company has allotted 1,02,05,128 equity shares of face value of H 10/- to Trishashna Holdings & Investments Private Ltd’ (THIPL) (entity belonging to promoter group) and Florintree Ventures LLP (entity belonging to non-promoter group) pursuant to conversion of Fully Convertible Warrants of H 10 each at issue price of H 81.25 per warrant including premium of H 71.25 per warrant.

G Rights, preferences and restrictions

The Company has only one class of equity shares having par face value of H 10 per share. Each equity shareholder is eligible for one vote per fully paid share held. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. In the event of liquidation of the Company, the holders of equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders or in case of partly paid shares the paid-up amount.

I Aggregate number of shares issued for consideration other than cash during the last five years

i) On May 30, 2018, the Company had allotted 1,230,098 equity shares of H 10 each on conversion of 1,230,098, 0.01% Optionally Convertible, Redeemable Preference Shares (“OCRPS”) of face value of H 10 each fully paid-up to Capital First Limited (entities belonging to non-promoter group).

ii) On June 27, 2019, the Company has allotted 1,343,283 equity shares of H 10 each on conversion of 1,343,283, Optionally Convertible, Cumulative, Redeemable Preference Shares (“OCCRPS”) of face value of H 10 each fully paid-up to IndusInd Bank Limited (entities belonging to non-promoter group).

J Shares reserved for issue under options

For details of shares reserved for issue under the Employee Stock Option Plan (ESOP), refer note 54.

K The information required to be disclosed that enables user of its financial statements to evaluate the its objectives, policies and process for managing capital is disclosed in note 45.

Nature and purpose of other reserve Capital redemption reserve

The same had been created in accordance with provisions of the Companies Act 2013 on account of redemption of preference shares.

Statutory reserve

The reserve is created as per the provision of Section 45(IC) of Reserve Bank of India Act, 1934. This is a restricted reserve and no appropriation can be made from this reserve fund except for the purpose as may be prescribed by Reserve Bank of India.

General reserve

The Management has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the provision of erstwhile Companies Act.

Securities premium

Securities premium represents premium received on issue of shares. The amount is utilised in accordance with the provisions of the Companies Act 2013.

Money received against share warrants

During the last year, the Company had allotted Fully Convertible Warrants of H 10 each at issue price of H 81.25 per warrant including premium of H 71.25 per warrant (25% of which was paid on allotment of warrant and 75% shall be payable at the time of exercising the warrants) on preferential basis to Trishashna Holdings & Investments Private Ltd (THIPL) (1,23,07,692 warrants) (entity belonging to promoter group) and Florintree Ventures LLP (1,23,07,692 warrants) (entity belonging to non-promoter group) on January 25, 2022. Out of the said warrants 1,02,05,128 warrants (61,02,564 warrants by THIPL and 41,02,564 warrants by Florintree Ventures LLP) have been converted during the year.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income.

Changes in fair value of loan assets

This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business model of hold and hold to collect and sell.

Cash flow hedge reserve

Cash flow hedge reserve is used to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.

* During the current year the company has changed its accounting policy for investment in subsidiaries from cost method as per Ind AS 27 ‘Seperate Financial Statements’ to fair value through profit and loss (FVTPL) as per Ind AS 109 ‘Financial Instruments’. However the figures pertainig to previous year are not presented here as, investment in subsidiaries was measured at cost as per Ind AS 27, ‘Separate Financial Statements’. (also refer note 9)

B Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statements and are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

The categories used are as follows:

Level 1: Quoted prices (unadjusted) for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method, market comparable method, recent transactions happened in the company and other valuation models. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Eligible loans valued by discounting the aggregate future cash flows (both principal and interest cash flows) with discount rate that commensurate with the risk inherent in the expected cash flows for the remaining portfolio tenor.

(b) The use of net asset value for certificate of deposits and mutual funds on the basis of the statement received from investee party.

(c) The value of derivative contracts are determined using mark to market value shared by contracting bank at balance sheet date.

(d) The use of net asset value for security receipts on the basis of the value declared by investee party.

(e) The use of net asset value for government securities on the basis of the value declared by government.

(f) The use of valuation report obtained from registered valuer for investment in subsidiaries.

The management assessed that fair values of cash and cash equivalents, other bank balances, trade receivables and trade payables approximate their respective carrying amounts, largely due to the short-term maturities of these instruments. The following methods and assumptions were used to estimate the fair values for other assets and liabilities:

(i) The fair values of the Company’s fixed interest bearing loans are determined by applying set of discount rates and then averaged out to arrive at the fair value.

(ii) The fair values of the Company’s fixed rate interest-bearing debt securities, borrowings and subordinated liabilities are determined by applying discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. For variable rate interest-bearing debt securities, borrowings and subordinated liabilities, carrying value represent best estimate of their fair value as these are subject to changes in underlying interest rate indices as and when the changes happen.

Note 44 : Financial risk management

i) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company manages the risk basis policies approved by the board of directors. The board of directors provides principles for overall risk management. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

In order to avoid excessive concentration of risk, the Company’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

A) Credit risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. ‘The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only accepting highly rated deposits from banks and financial institutions across the country.

Trade receivables

Trade receivables measured at amortized cost and credit risk related to these are managed by monitoring the recoverability of such amounts continuously.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits, insurance claim receivables and other recoverable. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

Loans

The Company closely monitors the credit-worthiness of the borrower’s through internal systems and appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default is considered to have occurred when amounts receivable become 90 days past due.

The major guidelines for selection of the client includes:

• The client’s income and indebtedness levels must be within the prescribed guidelines of Reserve Bank of India

• The client’s household must be engaged in some form of economic activity which ensures regular and assured income

• The client must possess the required Know Your Client (KYC) documents

• Client must agree to follow the rules and regulations of the organization

Wherever required, the Company holds other types of collateral and credit enhancements, such as cross-collateralisation on other assets of the borrower, pledge of securities, guarantees of promoters/proprietors, hypothecation of receivables via escrow account, hypothecation of receivables in other bank accounts, etc.

The Company does not physically possesses properties or other assets in its normal course of business but makes efforts toward recovery of outstanding amounts on delinquent loans. Once contractual loan repayments are overdue, the Company initiate the legal proceedings against the defaulted customers.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities (other than derivatives) that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

The Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors the Company’s liquidity positions (also comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity operates.

(ii) Maturities of financial assets and liabilities

The tables below analyses the Company financial assets and liabilities into relevant maturity groupings based on their contractual maturities. The table below shows an analysis of assets and liabilities analysed according to when they are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months, regardless of the actual contractual maturities of the products. With regard to loans and advances to customers, the Company uses the same basis of expected repayment behaviour as used for estimating the EIR. Issued debt reflect the contractual coupon amortisations.

The company has restructured certain loans in accordance with the RBI circular RBI/2021-22/31 DOR.STR. REC.11/21.04.048/2021-22 dated May 05, 2021. The maturities of financial assets and liabilities, as above, are the amount due and payable only to the extent the contractual terms with borrowers and provider of finances were amended as at March 31,2022.

C) Market risk

a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of the Company. To mitigate the Company’s exposure to foreign currency risk, non-rupee cash flows are monitored and derivative contracts are entered into in accordance with the Company’s risk management policies. Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk arise majorly on account of foreign currency borrowings. The Company manages its foreign currency risk by entering in to cross currency swaps and forward contract. When a derivative is entered in to for the purpose of being as hedge, the Company negotiates the terms of those derivatives to match with the terms of the hedge exposure.

b) Interest rate risk i) Liabilities

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. ‘The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. As at March 31,2023, the Company is exposed to changes in market interest rates through debt securities, other borrowings and subordinated liabilities at variable interest rates.

c) Price risk

i) Exposure

The Company’s exposure price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit and loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

ii) Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company’s equity and profit for the period:

Note 45 : Capital management

The primary objectives of the Company’s capital management policy is to ensure that the Company complies with capital adequacy requirements required by the Reserve Bank of India and maintains strong credit ratings and healthy capital ratios in order to support its business and to maximise shareholder value.

The Company’s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to comply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the sub-ordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets (including investments in Subsidiary companies). In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Note 47 : Transferred financial assets

In the course of its micro finance activity, the Company makes transfers of financial assets, where legal rights to the cash flows from the asset are passed to the counterparty and where the Company retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty.

The Company has securitized its loan assets to an unrelated and unconsolidated entities. As per the terms of the agreements, the Company is exposed to first loss default guarantee amounting in range of 12% to 20% of the amount securitised and therefore continues to be exposed to significant risk and rewards relating to the underlying mortgage receivables. Hence, these loan assets are not derecognised and proceeds received are presented as borrowings.

Note 48 : Employee benefits

The Company has adopted Indian Accounting Standard (Ind AS) - 19 on Employee Benefit as under :

A Defined contribution plans Provident and other funds

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and other funds which are defined contribution plans. The Company has no obligations other than this to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue.

B Defined benefit plans Gratuity

The Company has a defined benefit gratuity plan. Every employee is entitled to gratuity as per the provisions of the Payment of Gratuity Act, 1972. The scheme is funded and the scheme is managed by Life Insurance Companies. The liability of Gratuity is recognized on the basis of actuarial valuation.

The Company had lease contracts for office buildings used in its operations. Leases of these buildings generally have lease terms between 1 to 9 years. The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension, termination options, non financial restrictions and non financial covenants. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

The Company does not have any lease contracts that contains variable payments.

The Company does not anticipate any material leases to be terminated in next three years or beyond that.

Operating leases

The Company has taken on lease certain assets under operating lease arrangements. The contractual future minimum lease payment obligation in respect of these leases are as under:

Note 51 : Segment information

The Company operates in a single reportable segment i.e. financing which has similar risks and returns for the purpose of Ind AS 108 “Operating segments” is considered to be the only reportable business segment. The Company derives its major revenues from financing activities and its customers are widespread. Further, the Company operates only in India which is considered as a single geographical segment.

Note 52 : Contingent liabilities and commitments: (to the extent not provided for)

i) The Company has received income tax notice under section 143(3) of the Income Tax Act 1961 dated April 05, 2021 for tax demand amounting to H 194.63 lakhs on account of disallowance of expenses under section 43B and 36(1)(va) for assessment year 2018-19. In response to such notice, the company had filed rectification under section 154 and correspondingly received the order under said section dated March 12, 2023 from asessing office reducing the demand to H 64.96 lakhs. The company has also filed an appeal with CIT (A) against such demand which is pending for hearing.

ii) The Company has received income tax notice under section 143(3) of the Income Tax Act, 1961 dated September 24, 2022 for tax demand amounting to H 67.35 lakhs on account of disallowance under section 14A for assessment year 2020-21. In response to such notice, the company has filed an appeal with CIT (A) against such demand which is pending for hearing.

iii) The Company has received income tax notice under section 143(1) and 143(3) of the Income Tax Act, 1961 dated September 22, 2022 and December 20, 2022 respectively for tax demand amounting to H 389.40 lakhs on account of disallowance under section 41 and section 14A for assessment year 2021-22. In response to such notice, the company has filed an appeal with CIT (A) against such demand which is pending for hearing.

Note 54 : Employee Stock Option Plan / Scheme (ESOP/ ESOS)

Pursuant to the approval accorded by Shareholders of Satin Creditcare Network Limited (Company) at their Annual General Meeting held on July 6, 2017, the Nomination and Remuneration Committee of the Company formulated a new scheme ‘Satin Employee Stock Option Scheme 2017’ (ESOS 2017) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (or any amendment thereto or any other provisions as may be applicable). ESOS is applicable to all permanent and full-time employees (as defined in the Plan), excluding Promoters of the Company. The eligibility of employees to receive grants under the Plan has to be decided by the Nomination and Remuneration Committee from time to time at its sole discretion. Vesting of the options and vesting period shall take place in the manner determined by the Nomination and Remuneration Committee at the time of grant. Vesting of options shall be subject to the condition that the Grantee shall be in continuous employment with the Company and such other conditions as provided under ESOS 2017. The Exercise Price of each grant is determined by the Nomination and Remuneration Committee at the time of grant.

Presently, stock options have been granted or shares have been issued under the following scheme:

A. Satin Employee Stock Option Scheme 2009 (ESOS 2009)

B. Satin Employee Stock Option Scheme 2017 (ESOS 2017) a) Employee stock option schemes:

ESOS 2009: Initially 425,000 equity shares of H 10/- each at a premium of H 10/- each were allotted to Satin Employees Welfare Trust on November 27, 2009. (This scheme was terminated vide Shareholders Resolution dated July 6, 2017)

Satin ESOP 2010: 100,000 equity shares of H 10/- each at a premium of H 12/- were allotted to Satin Employees Welfare Trust on June 22, 2010 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

Satin ESOP II 2010: 150,000 equity shares of H 10/- each at a premium of H 15/- were allotted to Satin Employees Welfare Trust on April 21,2011 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

ESOS Scheme 2017: All options not exceeding 3,61,400 representing 0.96% of the paid-up Capital of the company as on March 31,2017 (or such other adjusted figure for any bonus, stock splits or consolidations or other reorganization of the capital structure of the Company as may be applicable from time to time including the shares lying with the Trust that may remain unutilized pursuant to non-exercisability of options granted under Satin ESOS 2009, 2010 (I) and 2010 (II), to or for the benefit of permanent employees of the Company and its subsidiaries whether working in India or outside India. The said ESOS Scheme, 2017 were approved in twenty seventh Annual General Meeting of the Company held on July 6. 2017.

The expected volatility was determined based on historical volatility data of the Company’s shares listed on the National Stock Exchange of India Limited.

iv) The Company has recognized share based payment expense of H NIL (March 31, 2022: H NIL ) during the year as proportionate cost.

v) The Company has H 169.69 Lakhs (March 31, 2022: H 169.69 Lakhs) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

Note 55 : Recent accounting pronouncements:

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1,2023, as below:

Ind AS 1 “Presentation of Financial Statements”

This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

Ind AS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”

This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.

Ind AS 12 “Income Taxes”

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.

(iv) (a) Disclosures relating to securitisation:-

The Company has entered into various agreements for the securitisation of loans with assignees, wherein it has securitised a part of its loans portfolio amounting to H 1,82,335.58 lakhs during the year ended March 31, 2023 (March 31, 2022 H 71,542.16 Lakhs), being the principal value outstanding as on the date of the deals that are outstanding. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of investors/buyers. In terms of the said securitisation agreements, the Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual agreement terms.

(v) Detail of assignment transactions undertaken:-

The Company has entered into various agreements for the assignments of loans with assignees, wherein it has assigned a part of its loans portfolio amounting to H 2,66,571.74 lakhs during the year ended March 31, 2023 (March 31 2022 H 89,056.92 Lakhs), being the principal value outstanding as on the date of the deals that are outstanding. In terms of accounting policy mentioned in Significant Accounting Policies, The Company has derecognised these loan portfolios. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of investors/buyer In terms of the said assignment agreements, the Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual agreement terms.

(vi) Details of financial asset sold to Securitisation/Reconstruction Company for asset reconstruction:-

The Company has not sold financial assets to Securitisation/Reconstruction Companies for asset reconstruction in the current and previous year.

(vii) Detail of non-performing financial asset purchased/sold:-

The Company has not purchased non-performing financial asset in the current and previous year, however the company has sold some of its non performing assets in current year. Details of the same has been given in point (D) below.

(xiii) Registration obtained from other financial sector regulators:-

The Company is registered with following other financial sector regulators:

(a) Ministry of Corporate Affairs (MCA)

(b) Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)

(xiv) Disclosure of Penalties imposed by RBI & other regulators:-No penalty has been imposed by RBI during the year.

(xv) Related party transactions:-

Please refer to note no 49

(xvi) Rating assigned by credit rating agencies and migration of ratings during the year-

During the current year, Fitch Solutions India Advisory Private Limited has assigned a MFI grading of ‘IRR MFI 1’to our company.

(xvii) Revenue Recognition

Revenue recogniation has not been postponed by the Company during the year (previous year NIL) due to any pending resolutions of significant uncertainties.

9 Pursuant to RBI circular RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 dated November 04, 2019, Liquidity credit risk disclosures are presented as below:

Qualitative Disclosure on LCR

As per Reserve Bank of India guidelines, all deposit-taking NBFCs irrespective of their asset size and non-deposit-taking NBFCs with an asset size of H 5,000.00 crore and above are required to maintain a liquidity coverage ratio (LCR) to ensure availability of adequate high-quality liquid assets (HQLA) to survive any acute liquidity stress scenario i.e, cash outflow increased to 115% and cash inflow decreased to 75%, lasting for 30 days. As per RBI guidelines,LCR has been calculated using the simple average of daily observations (over a period of 90 days).

Cash outflows under secured funding include contractual payments of the term loan, NCDs, and other debt obligations including interest payments. To compute inflow from fully performing exposures, the company considers collection from performing advances including interest due in the next 30 days. Other cash inflows include cash from unencumbered fixed deposits, Certificates of deposits, and mutual fund investments maturing in the next 30 days. The LCR as of March 31, 2023, is 133.53%, which is above the regulatory requirement of 60%.

(vii) Institutional set-up for liquidity risk management

The company has a robust risk management system in place. To ensure smooth functioning of business operations, the company maintains adequate liquidity in the form of cash, Bank Balances, and mutual funds. The company has a Risk Management Committee of the Board (RMCB) and is further sub-delegated to the Executive Risk Management Committee and the Asset Liability Management Committee (ALCO). The responsibility of the ALCO is to manage liquidity risk. ALCO reviews and ensures compliance with policies, frameworks, internal limits, and regulatory limits related to ALM and update the same to the board. The Executive Risk Management Committee is responsible for overseeing the implementation of risk management framework across SCNL and providing recommendations to the RMCB. RMCB meetings are held at periodic intervals.

Note 60 : Additional information pursuant to Ministry of Corporate Affairs notification dated March 24, 2021 with respect to amendments in Schedule III of Companies Act, 2013

(i) All the borrowings of the company are used for the specific purpose for which it was taken.

(ii) 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 rules made thereunder.

(iii) The company is not a wilful defaulter as declared by any bank or financial Institution or any other lender.

(iv) The Company reviews transactions on an ongoing basis to identify if there are any transactions with struck off companies. To the extent information is available on struck off companies, there are no transactions with struck off companies except as mentioned below.

(v) There are no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

(vi) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companie (Restriction on number of Layers) Rules, 2017.

(vii) There are no transactions which are not recorded in the books of accounts that has been surrendered or disclosed as incom during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevar provisions of the Income Tax Act, 1961).

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

Note 61 : Previous year figures have been regrouped/rearranged, wherever considered necessary, to conform to the classification/ disclosure adopted in the current year.

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Mar 31, 2022

The Company enters into derivative contracts for risk management purposes.

The table above represents the fair value of derivative financial instruments recorded as assets together with the notional amounts.

The notional amounts indicates the value of transaction outstanding at the year end and are not indicative of either the market risk or credit risk.

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk and interest rate risk. The Company’s risk management strategy and how it is applied to manage risk are explained below.

Derivatives designated as hedging instruments Foreign currency risk

The Company is exposed to foreign currency risk arising from its fixed rate foreign currency borrowing amounting to USD 9.4 million. Interest on the borrowing is payable at a fixed rate of 5.93% per annum. (on semi-annual basis starting from February 05, 2020) and the principal amount is repayable on August 05, 2022. The Company economically hedged the foreign currency risk arising from the debt with a ''receive fixed pay fixed’ cross-currency interest rate swap (''swap’) on July 24, 2019. The notional amount of swap is INR 6,487.41 lakhs. The swap contract converts the cash outflows of the foreign currency fixed rate borrowing of USD 9.4 million to cash outflows in INR with a notional amount of INR 6,487.41 lakhs and fixed interest of 11.18% per annum.

Offsetting

The Company does not have derivative financial assets and financial liabilities which are subject to master netting arrangements. Master netting arrangements are those arrangements wherein in the case of insolvency, derivative financial assets and financial liabilities will be settled on a net basis.

The Company’s investment properties consist of two residential properties in India. The fair values of the properties are INR 789.06 lakhs. These valuations are based on valuations performed by an independent valuer, the valuer is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. Valuation techniques used by the valuer is fair market value.

The Company has no restrictions on the realizability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

A Preference shares

During the year ended March 31, 2017, the Company had allotted 2,50,00,000, 12.10% Rated, Cumulative, NonParticipative, Non-Convertible, Compulsorily Redeemable Preference Shares of face value of INR10 each fully paid-up for cash at an issue price of INR 10 each. During the financial year 2021-22, these preference shares have been redeemed on April 22, 2021.

(i) During the current year, the authorized equity share capital of the Company was increased vide approval of equity shareholders dated December 31,2021 from INR 9,500 lakhs divided into 95,000,000 equity shares of INR 10 each to 10,500 lakhs divided into 105,000,000 equity shares of INR 10 each.

(ii) During the current year, the Company has allotted 30,76,916 equity shares of INR 10 each at issue price of INR 81.25 per share including premium of INR 71.25 per share on preferential basis of face value of INR 10 each fully paid-up to Adesh Agricare LLR Adesh Agrifarm LLR Aarti Agrifeeds LLP and Trimudra Trade & Holdings Private Limited (entities belonging to non-promoter group).

(iii) During the current year, the Company has allotted Fully Convertible Warrants of INR 10 each at issue price of INR 81.25 per warrant including premium of INR 71.25 per warrant (25% of which was paid on allotment of warrant and 75%

shall be payable at the time of exercising the warrants) on preferential basis to Trishashna Holdings & Investments

Private Limited (THIPL) (1,23,07,692 warrants) (entity belonging to promoter group) and Florintree Ventures LLP

(1,23,07,692 warrants) (entity belonging to non-promoter group) on January 25, 2022.

(iv) a) The Board of Directors of the Company on June 22, 2020 approved fund raising by way of a Rights Issue and on July 30, 2020 approved issue of 1,99,82,667 equity shares of face value of INR 10 each (the ""Rights Equity Shares"") at a price of INR 60 per Rights Equity Share (including premium of INR 50 per Rights Equity Share), aggregating to INR 1 1,989.60 lakhs, in the ratio of 48 Rights Equity Shares for every 125 existing fully-paid shares held by the eligible equity shareholders as on the Record Date i.e. August 05, 2020. On September 01, 2020, the Company approved allotment of 1,99,82,283 Rights Equity shares of face-value INR 10 each to the eligible applicants. The Rights Equity Shares were allotted as partly paid-up for an amount of INR 15 per Rights Equity Share received on application (of which INR 2.50 was towards face value and INR 12.50 towards premium). 384 Rights Equity Shares issued by the Company are kept in abeyance pending regulatory/ other clearances.

b) On February 12, 2021, the Company called for the 1st call money of INR 30 per partly paid shares (""PPS"") [of which INR 5 is towards face value and INR 25 towards premium]. Till June 9, 2021, it received the due amount in respect of 1,99,27,917 Rights Equity shares aggregating to INR 5,978.38 lakhs. However, due to non-payment of the 1st call money, in accordance with the Articles of Association, the Company forfeited 54,366 Rights Equity shares of INR 10 each (INR 2.50 paid up) along with the amount paid thereon on June 9, 2021.

c) On July 06, 2021, the Company called for the final call money of INR 15 (of which INR 2.50 shall be towards face value and INR 12.50 towards premium) per Rights Equity Share on 1,99,27,917 Rights Equity shares of INR 10 each (INR 7.50 Paid up). Out of which, final call money amounting to INR 2,974.36 lakhs on 1,98,29,079 Rights Equity shares has been successfully received by the Company and same is converted into fully paid equity shares on September 02, 2021.

d) The Company has extended the Final call money period (from September 07, 2021 to September 21, 2021) in respect of 98,838 Rights Equity share for which Final call money was not received.

e) During the said extended period the Company has received final call money amounting to INR 11.22 lakhs on 74,808 Rights Equity share and converted the same into fully paid shares on October 05, 2021 and forfeited 24,030 Rights Equity Share due to non -receipt of Final Call Money in accordance with the Articles of Association of the Company.

f) There has been no deviation in the use of proceeds of the Rights Issue, from the objects stated in the Offer document.

G Rights, preferences and restrictions

The Company has only one class of equity shares having par face value of INR 10 per share. Each equity shareholder is eligible for one vote per fully paid share held. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. In the event of liquidation of the Company, the holders of equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders or in case of partly paid shares the paid-up amount.

ii) On May 30, 2018, the Company had allotted 1,230,098 equity shares of INR 10 each on conversion of 1,230,098, 0.01% Optionally Convertible, Redeemable Preference Shares ("OCRPS") of face value of INR 10 each fully paid-up to Capital First Limited (entities belonging to non-promoter group).

iii) On June 27, 2019, the Company has allotted 1,343,283 equity shares of INR 10 each on conversion of 1,343,283, Optionally Convertible, Cumulative, Redeemable Preference Shares ("OCCRPS") of face value of INR 10 each fully paid-up to IndusInd Bank Limited (entities belonging to non-promoter group).

J Shares reserved for issue under options

For details of shares reserved for issue under the Employee Stock Option Plan (ESOP), refer note 54.

K The information required to be disclosed that enables user of its financial statements to evaluate the objectives, policies and process for managing capital is disclosed in note 44.

I Aggregate number of shares issued for consideration other than cash during the last five years

i) On August 30, 2016, the Company has allotted 1,087,456 equity shares of INR 10 each at an issue price of INR 457.82 per share including premium of INR 447.82 per share on preferential basis to persons and entities belonging to promoter and non-promoter group pursuant to swap of equity shares of the Company with the shareholders of Taraashna Financial Services Limited ("TFSL") with an intent to make it a subsidiary of the Company in accordance with the provisions of Chapter VII of SEBI (ICDR) Regulations, 2009. Accordingly, as per confirmation received from TFSL, 7,977,239 equity shares were transferred to the Company.

Nature and purpose of other reserve Capital redemption reserve

The same had been created in accordance with provisions of the Companies Act 2013 on account of redemption of preference shares.

Share options outstanding account

The reserve is used to recognize the fair value of the options issued to employees of the Company and subsidiary companies under Company’s employee stock option plan.

Statutory reserves

The reserve is created as per the provision of Section 45(IC) of Reserve Bank of India Act, 1934. This is a restricted reserve and no appropriation can be made from this reserve fund except for the purpose as may be prescribed by Reserve Bank of India.

General reserve

The Management has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the provision of erstwhile Companies Act.

Securities premium

Securities premium represents premium received on issue of shares. The amount is utilized in accordance with the provisions of the Companies Act 2013.

Money received against share warrants

During the current year, the Company has allotted Fully Convertible Warrants of INR 10 each at issue price of INR 81.25 per warrant including premium of INR 71.25 per warrant (25% of which was paid on allotment of warrant and 75% shall be payable at the time of exercising the warrants) on preferential basis to Trishashna Holdings & Investments Private Limited (THIPL) (1,23,07,692 warrants) (entity belonging to promoter group) and Florintree Ventures LLP (1,23,07,692 warrants) (entity belonging to non-promoter group) on January 25, 2022.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income.

Changes in fair value of loan assets

This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business model of hold and hold to collect and sell.

Cash flow hedge reserve

Cash flow hedge reserve is used to eliminate or reduce the exposure that arises from changes in the cash flows of a financial asset or liability (or other eligible exposure) due to changes in a particular risk, such as interest rate risk on a floating rate debt instrument.

B Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statements and are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

The categories used are as follows:

Level 1: Quoted prices (unadjusted) for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation technique used to determine fair value

The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method, market comparable method, recent transactions happened in the Company and other valuation models. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Eligible loans valued by discounting the aggregate future cash flows (both principal and interest cash flows) with average lending rate as discounting rate for the remaining portfolio tenor.

(b) The use of net asset value for certificate of deposits and mutual funds on the basis of the statement received from investee party.

(c) The value of derivative contracts are determined using forward exchange rates at Balance Sheet date.

(d) The use of net asset value for security receipts on the basis of the value declared by investee party.

The management assessed that fair values of cash and cash equivalents, other bank balances, trade receivables and trade payables approximate their respective carrying amounts, largely due to the short-term maturities of these instruments. The following methods and assumptions were used to estimate the fair values for other assets and liabilities:

(i) The fair values of the Company’s fixed interest bearing loans are determined by applying set of discount rates and then averaged out to arrive at the fair value.

(ii) The fair values of the Company’s fixed rate interest-bearing debt securities, borrowings and subordinated liabilities are determined by applying discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. For variable rate interest-bearing debt securities, borrowings and subordinated liabilities, carrying value represent best estimate of their fair value as these are subject to changes in underlying interest rate indices as and when the changes happen.

43*| FINANCIAL RISK MANAGEMENT i) Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company manages the risk basis policies approved by the board of directors. The board of directors provides written principles for overall risk management. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

a) Credit risk management

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. ''The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

In order to avoid excessive concentration of risk, the Company’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

A) Credit risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only accepting highly rated deposits from banks and financial institutions across the country.

Trade receivables

Trade receivables measured at amortized cost and credit risk related to these are managed by monitoring the recoverability of such amounts continuously.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits, insurance claim receivables and other recoverable. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

Loans

The Company closely monitors the credit-worthiness of the borrower''s through internal systems and appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default is considered to have occurred when amounts receivable become 90 days past due.

The major guidelines for selection of the client includes:

• The client''s income and indebtedness levels must be within the prescribed guidelines of Reserve Bank of India

• The client''s household must be engaged in some form of economic activity which ensures regular and assured income

• The client must possess the required Know Your Client (KYC) documents

• Client must agree to follow the rules and regulations of the organization

• Credit bureau check - In order to deal with the problem of over extension of credit and indebtedness of the client, the organization undertakes credit bureau checks compulsorily for every client. The credit bureau check helps the organization in identifying clients with poor repayment histories and multiple loans.

ii) Expected credit loss for loans

Definition of default:

The Company considers default in all cases when the borrower becomes 90 days past due on its contractual payments. The Expected Credit Loss (ECL) is measured at 12-month ECL for Stage 1 loan assets and at lifetime ECL for Stage 2 and Stage 3 loan assets. ECL is the product of the Probability of Default, Exposure at Default and Loss Given Default.

d) Loans secured against collateral

Company’s secured portfolio pertains to MSME loans, which are secured largely against property, plant and equipment, book debts, inventories, margin money and other working capital items. Company’s collateral policy is consistent throughout the periods presented. The following table presents the maximum exposure to credit risk.

Wherever required, the Company holds other types of collateral and credit enhancements, such as cross-collateralization on other assets of the borrower, pledge of securities, guarantees of promoters/proprietors, hypothecation of receivables via escrow account, hypothecation of receivables in other bank accounts, etc.

The Company does not physically possesses properties or other assets in its normal course of business but makes efforts toward recovery of outstanding amounts on delinquent loans. Once contractual loan repayments are overdue, the Company initiate the legal proceedings against the defaulted customers.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities (other than derivatives) that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. The Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors the Company’s liquidity positions (also comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity operates.

(ii) Maturities of financial assets and liabilities

The tables below analyses the Company financial assets and liabilities into relevant maturity groupings based on their contractual maturities. The table below shows an analysis of assets and liabilities analyzed according to when they are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months, regardless of the actual contractual maturities of the products. With regard to loans and advances to customers, the Company uses the same basis of expected repayment behavior as used for estimating the EIR. Issued debt reflect the contractual coupon amortizations.

C) Market risk a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the functional currency of the Company. To mitigate the Company’s exposure to foreign currency risk, non-rupee cash flows are monitored and derivative contracts are entered into in accordance with the Company’s risk management policies. Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk arise majorly on account of foreign currency borrowings. The Company manages its foreign currency risk by entering in to cross currency swaps and forward contract. When a derivative is entered in to for the purpose of being as hedge, the Company negotiates the terms of those derivatives to match with the terms of the hedge exposure.

c) Price risk i) Exposure

The Company’s exposure price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit and loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

b) Interest rate risk i) Liabilities

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. ''The Company’s policy is to minimize interest rate cash flow risk exposures on long-term financing. As at March 31,2022, the Company is exposed to changes in market interest rates through debt securities, other borrowings and subordinated liabilities at variable interest rates.

44| CAPITAL MANAGEMENT

The primary objectives of the Company’s capital management policy is to ensure that the Company complies with capital adequacy requirements required by the Reserve Bank of India and maintains strong credit ratings and healthy capital ratios in order to support its business and to maximize shareholder value.

The Company’s capital management objectives are

- to ensure the Company’s ability to continue as a going concern

- to comply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the sub-ordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets (including investments in Subsidiary companies). In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

46*| TRANSFERRED FINANCIAL ASSETS

In the course of its micro finance activity, the Company makes transfers of financial assets, where legal rights to the cash flows from the asset are passed to the counterparty and where the Company retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty.

The Company has securitized its loan assets to an unrelated and unconsolidated entities. As per the terms of the agreements, the Company is exposed to first loss default guarantee amounting in range of 12% to 20% of the amount securitized and therefore continues to be exposed to significant risk and rewards relating to the underlying mortgage receivables. Hence, these loan assets are not derecognized and proceeds received are presented as borrowings.

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

The Company had lease contracts for office buildings used in its operations. Leases of these buildings generally have lease terms between 1 to 9 years. The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options, these options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

The Company does not have any lease contracts that contains variable payments.

The Company does not anticipate any material leases to be terminated in next three years or beyond that.

50*| SEGMENT INFORMATION

The Company operates in a single reportable segment i.e. financing which has similar risks and returns for the purpose of Ind AS 108 "Operating segments" is considered to be the only reportable business segment. The Company derives its major revenues from financing activities and its customers are widespread. Further, the Company operates only in India which is considered as a single geographical segment.

5l| CONTINGENT LIABILITIES AND COMMITMENTS:

(to the extent not provided for)

The Company has received income tax notice under section 143(3) of the "Income Tax Act 1961" dated Apr 05, 2021 for tax demand amounting to '' 194.63 lakhs on account of disallowance of expenses under section 43B and 36(1)(va) for assessment year 2018-19. In response to such notice, the Company has filed appeal with CIT(A) and the same is pending for hearing:

Particulars	For the year ended March 31, 2022	For the year ended March 31, 2021
Estimated amount of contract remaining to be executed on capital account and not provided for	57.14	242.83
Company had issued corporate financial guarantee to National Housing Bank (NHB) against the funding obtained by its subsidiary Satin Housing Finance Limited.	4,500.00	1,500.00
Company had issued corporate financial guarantee to State Bank of India against the funding obtained by its subsidiary Satin Housing Finance Limited.	2,500.00	-
Company has issued corporate financial guarantee to Catalyst Trusteeship Limited against the Non-convertible Debenture issued by its subsidiary Satin Finserv Limited.	500.00	500.00
Total	7,557.14	2,242.83

53*| IMPACT OF COVID-19 PANDEMIC

The COVID-19 pandemic has continued to cause a disruption of the economic activities across the globe including India throughout the year. The Government of India announced a lockdown during the first quarter of the financial year to contain the spread of the virus and various state governments and local statutory authorities imposed restrictions on economic activities in different parts of the country which continued to impact Company’s operations including lending and collection activities.

In assessing the impairment allowance for loan portfolio, the Company has considered internal and external sources of information available including indicators of deterioration in the macro-economic factors. Further, the management has estimated the impact of the ongoing wave of the pandemic on its loan portfolio, based on reasonable and supportable information available till date and considering performance after the all the three waves of Covid, and has noted that the existing provisioning levels are adequate to cover any further delinquencies. Given the unique nature and scale of this pandemic, its full extent of impact on the Company’s operations and financial metrics, more specifically on the borrower’s ability to service their obligations on a timely basis, will depend on the severity and duration of the pandemic as well as on highly uncertain future developments including governmental and regulatory measures and the Company’s responses thereto. Accordingly, the management’s estimate of impairment losses based on various variables and assumptions could result in actual credit loss being different than that being estimated.

The Company has assessed the impact of the pandemic on its liquidity and ability to repay its obligations as and when they are due. The Company has considered its current liquidity position, expected inflows from various sources of borrowings and stimulus packages announced by the Government of India. Based on the foregoing, management believes that the Company will be able to pay its obligations as and when these become due in the foreseeable future. The impact of the pandemic on the operations of the Company is significantly dependent on uncertain future economic conditions.

i. Estimation of uncertainties relating to the global health pandemic from COVID-19:

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of receivables, investments, property plant and equipment and intangible assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and external sources of information including credit reports and related information, economic forecasts and consensus estimates from market sources on the expected future performance of the Company. Given the dynamic nature of the pandemic situation, these estimates are based on early indicators, subject to uncertainty and may be affected by the severity and duration of the pandemic and the actual impact of the pandemic, including governmental and regulatory measures, on the business and financial metrics of the Company (including credit losses) could be different from that estimated by the Company.

ii. Expected credit loss (ECL) allowance on loan portfolio

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

During the year ended as at March 31, 2022, Company has restructured certain loans (both JLG and MSME) in accordance with board approved restructuring policy dated May 27, 2021 and RBI circular RBI/2021-22/31 DOR.STR. REC.1 1/21.04.048/2021-22 dated May 05, 2021. Therefore the Company has considered these loans for significant increase in credit risk assessment, accordingly, the Company has made additional ECL on these restructured loans on account of SICR provisioning to the tune of '' 17,384.17 lakhs on said restructured loans. Considering the unique and widespread impact of COVID-19 pandemic, the Company has estimated expected credit loss allowance in its provision, based on information available at this point in time to reflect, among other things, the deterioration in the macro-economic factors.

iii. Loss allowance for other receivables

The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect

current and estimated future economic conditions. The Company considered current and anticipated future economic conditions. In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19.

iv. Revenue from operations

The Company has evaluated the impact of COVID - 19. Due to the nature of the pandemic, the Company will continue to monitor developments to identify significant uncertainties relating to revenue in future periods.

v. Impairment assessment of Property plant and equipment, intangible assets

The Company is engaged primarily in providing micro finance services to women in the rural areas of India who are enrolled as members and organized as Joint Liability Groups (''JLG’). Considering the nature of business the Company does not have major property plant & equipment (PP&E) assets. As at March 31, 2022, the estimated recoverable amount of the CGU exceeded its carrying amount. Reasonable sensitivities in key assumptions consequent to the change in estimated future economic conditions on account of possible effects relating to Covid 19 is unlikely to cause the carrying amount to exceed the recoverable amount of the cash generating unit.

vi. Impairment assessment of investment in subsidiary Companies:

Management assesses impairment loss on the investments when impairment indicators exists by comparing the fair value and carrying value of such investments. During the year management assessed if there are any impairment indicators exist on its investment in subsidiary companies and noted that such indicators exist because of Covid-19 pandemic on its investment in one of its subsidiary company i.e. Taraashna Financial Services Limited (Formally known as Taraashna Services Limited). The equity shares of the subsidiary company is not listed on a stock exchange. The subsidiary company is about to get merged with another subsidiary company named Satin Finserv Limited. The Board of Directors of respective subsidiaries in their board meeting had approved the Scheme of Arrangement for Amalgamation between Taraashna Financial Services Limited (Transferor Company) and Satin Finserv Limited (Transferee Company) and their respective shareholders and creditors under Sections 230 to 232 of the Companies Act, 2013, ("Act") and other applicable provisions of the Act and rules made thereunder. Consequently, the first motion application has been filed before Hon’ble NCLT Chandigarh Bench after obtaining requisite NOCs from shareholders and creditors. The said first motion application is reserved and allowed by the said Hon’ble NCLT on hearing dated April 06, 2022. Since the combined valuation is much higher than the carrying value of the investment and hence there is no impairment.

vii. Credit risk on cash and cash equivalents

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks, commercial papers and certificate of deposits of financial institutions with high ratings assigned by international and domestic credit rating agencies. Ratings and Financials of the counterparties are monitored periodically. The Company reviews the portfolio on regular basis.

Current liquidity position and necessary stress tests considering various scenarios, management is confident that the Company will be able to fulfil its obligations as and when these become due in the foreseeable future.

54*| EMPLOYEE STOCK OPTION PLAN / SCHEME (ESOP/ ESOS)

Pursuant to the approval accorded by Shareholders of Satin Creditcare Network Limited ("Company") at their Annual General Meeting held on July 06, 2017, the Nomination and Remuneration Committee of the Company formulated a new scheme ''Satin Employee Stock Option Scheme 2017’ (ESOS 2017) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (or any amendment thereto or any other provisions as may be applicable). ESOS is applicable to all permanent and full-time employees (as defined in the Plan), excluding Promoters of the Company. The eligibility of employees to receive grants under the Plan has to be decided by the Nomination and Remuneration Committee from time to time at its sole discretion. Vesting of the options and vesting period shall take place in the manner determined by the Nomination and Remuneration Committee at the time of grant. Vesting of options shall be subject to the condition that the Grantee shall be in continuous employment with the Company and such other conditions as provided under ESOS 2017. The Exercise Price of each grant is determined by the Nomination and Remuneration Committee at the time of grant.

Presently, stock options have been granted or shares have been issued under the following scheme:

A. Satin Employee Stock Option Scheme 2009 (ESOS 2009)

B. Satin Employee Stock Option Scheme 2017 (ESOS 2017) a) Employee stock option schemes:

ESOS 2009: Initially 425,000 equity shares of INR 10/- each at a premium of INR 10/- each were allotted to Satin Employees Welfare Trust on November 27, 2009. (This scheme was terminated vide Shareholders Resolution dated July 06, 2017)

Note: There was NIL options vested in F.Y. 2013-14.

Satin ESOP 2010: 100,000 equity shares of INR 10/- each at a premium of INR 12/- were allotted to Satin Employees Welfare Trust on June 22, 2010 (The scheme was terminated vide Shareholders Resolution dated July 06, 2017 and the outstanding options were transferred to Satin ESOS 2017).

Satin ESOP II 2010: 150,000 equity shares of INR 10/- each at a premium of INR 15/- were allotted to Satin Employees Welfare Trust on April 21, 2011 (The scheme was terminated vide Shareholders Resolution dated July 06, 2017 and the outstanding options were transferred to Satin ESOS 2017).

ESOS Scheme 2017: All options not exceeding 3,61,400 representing 0.96% of the paid-up Capital of the Company as on March 31,2017 or such other adjusted figure for any bonus, stock splits or consolidations or other reorganization of the capital structure of the Company as may be applicable from time to time including the shares lying with the Trust that may remain unutilized pursuant to non-exercisability of options granted under Satin ESOS 2009, 2010 (I) and 2010 (II), to or for the benefit of permanent employees of the Company and its subsidiaries whether working in India or outside India. The said ESOS Scheme, 2017 were approved in twenty seventh Annual General Meeting of the Company held on July 06. 2017.

vii) The Company has recognized share based payment expense of INR NIL (March 31,2021: INR 19.02 lakhs ) during the year as proportionate cost.

viii) The Company has INR 169.69 lakhs(March 31, 2021: INR 79.69 lakhs) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

55*| RECENT ACCOUNTING PRONOUNCEMENTS:

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 01,2022, as below:

Ind AS 103 “Business Combination"

The amendments specifiy that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 16 - Proceeds before intended use

The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the Company is preparing the asset for its intended use. Instead, an entity will recognize such sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements.

Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets"

The amendments specify that that the ''cost of fulfilling’ a contract comprises the ''costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labor, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and the Company does not expect the amendment to have any impact in its financial statements.

Ind AS 109 “Financial Instruments"

The amendment clarifies which fees an entity includes when it applies the ''10 percent’ test of Ind AS 109 in assessing whether to derecognize a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.

(v) Detail of assignment transactions undertaken:-

The Company has entered into various agreements for the assignments of loans with assignees, wherein it has assigned a part of its loans portfolio amounting to INR 89,056.92 lakhs during the year ended March 31, 2022 (March 31 2021 INR 74,271.48 lakhs), being the principal value outstanding as on the date of the deals that are outstanding. In terms of accounting policy mentioned in Significant Accounting Policies, The Company has derecognized these loan portfolios. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of investors/buyers. In terms of the said assignment agreements, the Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual agreement terms.

9 Pursuant to RBI circular RBI/2019-20/88 DOR.NBFC (PD) CC. No.102/03.10.001/2019-20 dated November 04, 2019, Liquidity credit risk disclosures are presented as below:Qualitative Disclosure on LCR

As per Reserve Bank of India guidelines, all deposit-taking NBFCs irrespective of their asset size and non-deposit-taking NBFCs with an asset size of INR5,000 Crore and above are required to maintain a liquidity coverage ratio (LCR) to ensure that they have adequate high-quality liquid assets(HQLA) to survive any acute liquidity stress scenario lasting for 30 days. The LCR is calculated by dividing a Company’s stock of HQLA by its total net cash outflows over a 30 -day stress period. Stressed cash flows are computed by assigning a predefined stress percentage to the overall cash inflows and cash outflows.

The Company includes cash and bank balances without any haircut under high-quality Liquid Assets (HQLA). The HQLA as on 31, March 2022 stood at INR 76,893.08 lakhs.

Cash outflows under secured funding include contractual payments of the term loan, NCDs, and bank overdraft facility including interest payments. To compute inflow from fully performing exposures, the Company considers collection from performing advances including interest due in the next 30 days. Other cash inflows include cash from unencumbered fixed deposits and mutual fund investments maturing in the next 30 days. The LCR as on March 31, 2022 is 241%, which is above the regulatory requirement of 50%.

(vii) Institutional set-up for liquidity risk management

The Company has a robust risk management system in place. To ensure smooth functioning of business operations, the Company maintains adequate liquidity in the form of cash, Bank Balances, and mutual funds. The Company has a Risk Management Committee of the Board (RMCB) and is further sub-delegated to the Executive Risk Management Committee and the Asset Liability Management Committee (ALCO). The responsibility of the ALCO is to manage liquidity risk. ALCO reviews and ensures compliance with policies, frameworks, internal limits, and regulatory limits related to ALM and update the same to the board. The Executive Risk Management Committee is responsible for overseeing the implementation of risk management framework across SCNL and providing recommendations to the RMCB. RMCB meetings are held at periodic intervals.

(i) All the borrowings of the Company are used for the specific purpose for which it was taken.

(ii) 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 rules made thereunder.

(iii) The Company is not a willful defaulter as declared by any bank or financial Institution or any other lender.

(iv) The Company does not have any transactions with the companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act, 1956.

(v) There are no charges or satisfaction yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

(vii) There are no transactions which are 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).

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

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Mar 31, 2019

1. COMPANY OVERVIEW

Satin Creditcare Network Limited (''the Company'') is a public limited company and incorporated under the provisions of Companies Act. The Company is a non-deposit accepting Non-Banking Financial Company (''NBFC-ND'') and is registered as a Non-Banking Financial Company - Micro Finance Institution (''NBFC-MFI'') with the Reserve Bank of India ("RBI") in November 2013. The Company is engaged primarily in providing micro finance services to women in the rural areas of India who are enrolled as members and organised as Joint Liability Groups (''JLG''). The Company is domiciled in India and its registered office is situated at 5^th Floor, Kundan Bhawan, Azadpur Commercial Complex, New Delhi - 1 10033.

2. BASIS OF PREPARATION

(i) Statement of compliance with Indian Accounting Standards (ind AS)

These standalone financial statements ("the Financial Statements") have been prepared in accordance with the Indian Accounting Standards (''Ind AS'') as notified by Ministry of Corporate Affairs (''MCA'') under Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies for all the periods presented in this financial statements.

The financial statements for the year ended March 31, 2019 are the first financial statements which has been prepared in accordance with Ind AS and other applicable guidelines issued by the Reserve Bank of India (''RBI'').

The financial statements upto and for the year ended March 31 , 2018 were prepared in accordance with the accounting standard notified under Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP) and other applicable guidelines issued by the RBI, which have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS.

As these are the Company''s first financial statements prepared in accordance with Ind AS, the Company has applied, First-time Adoption Standard (Ind AS 101) of Indian Accounting Standards. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 56.

The financial statements for the year ended March 31, 2019 were authorised and approved for issue by the Board of Directors on May 08, 2019.

(ii) Historical cost convention

The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities and share based payments which are measured at fair values as explained in relevant accounting policies.

(ii) Buildings acquired under amalgamation continue in the name of Satin Intellicomm Limited.

(iii) For disclosure of contractual commitments to be executed on capital account, refer note 51.

(iv) Vehicles are taken on finance lease; monthly installments are paid as per agreed terms and conditions.

(v) Property, plant and equipment have been mortgaged/pledged as security for borrowings, refer note 52.

Notes:

A preference shares

(i) During the year ended March 31, 2017, the Company allotted 2,50,00,000, 1 2.10% Rated, Cumulative, Non-Participative, Non-Convertible, Compulsorily Redeemable Preference Shares of face value of Rs.10 each fully paid-up for cash at an issue price of Rs. 10 and are redeemable on April 22, 2021.

(ii) During the year ended March 31, 2018, the Company allotted 1 2,30,098, 0.01 % Optionally Convertible, Redeemable Preference Shares ("OCRPS") of face value of Rs. 10 each fully paid-up for cash at an issue price of Rs. 284.53 per share. Each preference share is either convertible into equivalent number of equity shares of the Company of Rs. 10 each at the option of allottee within a time frame not exceeding 12 months from the date of allotment or subject to redemption by the Company at the end of such time frame and on such terms and conditions, as may be deemed appropriate by the Board of Directors. Further, these OCRPS were converted into equivalent number of equity shares (i.e., 1 2,30,098 equity shares) of face value of Rs. 10 each on May 30, 2018. The Company has measured this as compound financial instruments and accordingly, equity and liability component is recognised.

(iii) During the year ended March 31, 2018, the Company allotted 13,43,283, 0.01% Optionally Convertible, Cumulative, Redeemable Preference Shares (""OCCRPS"") of face value of Rs. 10 each fully paid-up for cash at an issue price of Rs. 335 per share. Each preference share is either convertible into equivalent number of equity shares of the Company of Rs. 10 each at the option of allottee within a time frame not exceeding 18 months from the date of allotment or subject to redemption by the Company at the end of such time frame and on such terms and conditions along with applicable yield of 12% per annum of the consideration paid by alottee, as may be deemed appropriate by the Board of Directors. The Company has measured this as compound financial instruments and accordingly, equity and liability component is recognised.

Notes:

i) The borrowings together with debt securities and subordinate liabilities referred in notes 20, 21 and 22 are secured by way hypothecation of portfolio loans arising out of its business operations, cash collateral in the form of fixed deposits. The same have also been guaranteed by two of the directors of the Company in their personal capacity.

ii) Vehicles and building are hypothecated for respective borrowings availed for purchase of property plant and equipments.

A. D uring the year ended March 31, 2018, the authorised share capital of the company was increased vide approval of equity shareholders from Rs. 5,500 Lakhs divided into 5,50,00,000 equity shares of Rs. 10 each to Rs. 6,500 Lakhs divided into 6,50,00,000 equity shares of Rs. 10 each.

B. (i) During the year ended March 31, 2018 the Company allotted 1 5,43,187 equity shares of Rs. 10 each at an issue price of Rs. 416.67 per share including premium of Rs. 406.67 per share on preferential basis to Asian Development Bank (an entity belonging to non-promoter group).

(ii) During the year ended March 31, 2018, the Company allotted 6,58,690 equity shares of Rs. 10 each at an issue price of Rs. 455.45 per share including premium of Rs. 445.45 per share on preferential basis pursuant to conversion of fully convertible warrants to Trishashna Holdings & Investments Private Limited (an entity belonging to promoter group).

(iii) During the year ended March 31, 2018, subsequent to the approval of Board of Directors of the Company and shareholders of the Company, the working Committee of the Board offered for Qualified Institutions Placement for an amount upto Rs. 1 5,000 Lakhs to Qualified Institutional Buyers in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2009, as amended and in accordance with Chapter VIII of the SEBI ICDR Regulations. the Working Committee of the Board of Directors of the Company approved the allotment of 49,18,032 equity shares of face value of Rs. 10 each to qualified institutional buyers (QIBs) at the issue price of Rs. 305 per equity share (including a premium of Rs. 295), aggregating to Rs. 1 5,000 Lakhs.

(iv) During the year ended March 31, 2018, the Company allotted 23,88,059 and 5,97,014 equity shares of Rs. 10 each at an issue price of Rs. 335 per share including premium of Rs. 325 per share on preferential basis to Kora Investment 1 LLC and Nordic Microfinance Initiative Fund III KS, respectively (entities belonging to non-promoter group).

(v) During the year, the Company has allotted 12,30,098 equity shares of Rs. 10 each at issue price of Rs. 284.53 per share including premium of Rs. 274.53 per share on preferential basis pursuant to conversion of 12,30,098, 0.01% Optionally Convertible, Cumulative, Redeemable Preference Shares ("OCRPS") of face value of Rs. 10 each fully paid-up to Capital First Limited (entities belonging to non-promoter group).

C. Rights, preferences and restrictions

The Company has only one class of equity shares having par face value of Rs. 10 per share. Each equity shareholder is eligible for one vote per share held. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. Dividends are subject to corporate dividend tax. In the event of liquidation of the Company, the holders of equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

*THIPL, Promoter entity, whose shareholding (due to inter-se transfer of Promoter''s) has been changed with effect from March 04, 2019 vide order no. 147 of petition number CP(CAA)-29(PB)/2018 connected with CA(CAA)- 127(PB)/2017 received from National Company Law Tribunal, Principal Bench, New Delhi.

# Shareholding are on combined basis.

D. Aggregate number of shares issued for consideration other than cash during the last five years

i) The Company has allotted 10,87,456 equity shares of Rs. 10 each at an issue price of Rs. 457.82 per share including premium of Rs. 447.82 per share on preferential basis to persons and entities belonging to promoter and non-promoter group pursuant to swap of equity shares of the Company with the shareholders of Taraashna Services Limited, "TSL" (Previously known as Taraashna Services Private Limited) with an intent to make it a subsidiary of the Company in accordance with the provisions of Chapter VII of SEBI (ICDR) Regulations, 2009. Accordingly, as per confirmation received from TSL, 79,77,239 equity shares were transferred to the Company.

ii) During the year, the Company has allotted 12,30,098 equity shares of Rs. 10 each on conversion of 12,30,098, 0.01% Optionally Convertible, Cumulative, Redeemable Preference Shares ("OCRPS") of face value of Rs. 10 each fully paid-up to Capital First Limited (entities belonging to non-promoter group).

E. Shares reserved for issue under options

For details of shares reserved for issue under the Employee Stock Option Plan (ESOP), refer note 53.

F. In respect of securities convertible into equity shares issue along with their earliest date of conversion and other related terms and conditions disclosed in note 22 A.

G. The information required to be disclosed that enables user of its financial statements to evaluate the its objectives, policies and process for managing capital is disclosed in note 44.

Nature and purpose of other reserve Capital redemption reserve

The same had been created in accordance with provisions of the Companies Act 2013 on account of redemption of preference shares. Share options outstanding account

The reserve is used to recognise the fair value of the options issued to employees of the Company and subsidiary companies under Company''s employee stock option plan.

Statutory reserves

The reserve is created as per the provision of Section 45(IC) of Reserve Bank of India Act, 1934. This is a restricted reserve and no appropriation can be made from this reserve fund except for the purpose as may be prescribed by Reserve Bank of India.

General reserve

The Company has transferred a portion of the net profit to general reserve before declaring dividend pursuant to the provision of erstwhile Companies Act.

Securities premium

Securities premium represents premium received on issue of shares. The amount is utilised in accordance with the provisions of the Companies Act 2013.

Equity component of compound financial instruments

Optionally convertible and redeemable preference shares issued by the Company have been classified as compound financial instruments and recognised at amortised cost. The difference between transaction value and amortised cost has been recognised as a separate component in other equity.

Foreign currency monetary item translation difference account (FCMITDA)

FCMITDA represents exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements.

Money received against share warrants

The Company allotted 17,91,044 fully convertible warrants of Rs. 10 each at an issue price of Rs. 335 per warrant including premium of Rs. 325 per warrant on preferential basis to Trishashna Holdings & Investments Private Limited (an entity belonging to promoter group) on December 28, 2017. Each warrant is convertible into or exchangeable at an option of warrant holder, in one or more tranches in one equity share of face value of Rs. 10 each at any time after the date of allotment but on or before the expiry of 18 months from the date of allotment of the warrants.

Equity instruments through other comprehensive income

This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive income.

Changes in fair value of loan assets

This represents the cumulative gains and losses arising on the fair valuation of loan assets classified under business model of hold and hold to collect and sell.

H. Fair values hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statements and are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

The categories used are as follows:

Level 1: Quoted prices (unadjusted) for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Eligible portfolio loans valued by discounting the aggregate future cash flows (both principal and interest cash flows) with risk-adjusted discounting rate for the remaining portfolio tenor. The Company has considered the average valuation impact arrived using risk free, cost of funds and yield free securitisation approach.

(b) The use of net asset value for certificate of deposits and mutual funds on the basis of the statement received from investee party.

(c) For unquoted equity instruments, the Company has used earning capitalisation method (fair value approach) discounted at a rate to reflect the risk involved in the business.

(d) The value of derivative contracts are determined using forward exchange rates at balance sheet date.

I.2 Fair value of instruments measured at amortised cost

Fair value of instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using Level 3 inputs:

The management assessed that fair values of investments, cash and cash equivalents, other bank balances, trade receivables and trade payables approximate their respective carrying amounts, largely due to the short-term maturities of these instruments. The following methods and assumptions were used to estimate the fair values for other assets and liabilities:

(i) The fair values of the Company''s fixed interest bearing loans are determined by applying set of discount rates and then averaged out to arrive at the impact of fair value.

(ii) The fair values of the Company fixed rate interest-bearing debt securities, borrowings and subordinated liabilities are determined by applying discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. For variable rate interest-bearing debt securities, borrowings and subordinated liabilities, carrying value represent best estimate of their fair value as these are subject to changes in underlying interest rate indices as and when the changes happen.

3. FINANCIAL RISK MANAGEMENT

Risk Management

The Company''s activities expose it to market risk, liquidity risk and credit risk. The Company''s board of directors has overall responsibility for the establishment and oversight of the Company risk management framework. The Company manages the risk basis policies approved by the board of directors. The board of directors provides written principles for overall risk management. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

A) Credit risk

Credit risk is the risk that the Comapny will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances, investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. ‘The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company has established a credit quality review process to provide early identification of possible changes in the creditworthiness of counterparties, including regular collateral revisions. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents (excluding cash on hand) and bank deposits is managed by only accepting highly rated deposits from banks and financial institutions across the country.

Trade receivables

Trade receivables measured at amortised cost and credit risk related to these are managed by monitoring the recoverability of such amounts continuously.

Other financial assets measured at amortised cost

Other financial assets measured at amortised cost includes loans and advances to employees, security deposits, insurance claim receivables and other recoverables. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.

Loans

The Company closely monitors the credit-worthiness of the borrower''s through internal systems and appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. These processes include a detailed appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses increase in credit risk on an ongoing basis for amounts loan receivables that become past due and default is considered to have occurred when amounts receivable become 90 days past due.

The major guidelines for selection of the client includes:

- The client''s income and indebtedness levels must be within the prescribed guidelines of Reserve Bank of India

- The client''s household must be engaged in some form of economic activity which ensures regular and assured income

- The client must possess the required KYC documents

- Client must agree to follow the rules and regulations of the organisation

- Credit bureau check - In order to deal with the problem of over extension of credit and indebtedness of the client, the organisation undertakes credit bureau checks compulsorily for every client. The credit bureau check helps the organisation in identifying clients with poor repayment histories and multiple loans.

Assets are written off when there is no reasonable expectation of recovery. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

ii) Expected credit loss for loans

Definition of default:

The Company considers default in all cases when the borrower becomes 90 days past due on its contractual payments. ‘The Expected Credit Loss (ECL) is measured at 12-month ECL for Stage 1 loan assets and at lifetime ECL for Stage 2 and Stage 3 loan assets. ECL is the product of the Probability of Default, Exposure at Default and Loss Given Default.

(d) Loans secured against collateral

Company''s secured portfolio pertains to MSME loans, which are secured largely against property, plant and equipment, book debts, inventories, margin money and other working capital items. Company''s collateral policy is consistent throughout the period''s presented. The following table presents the maximum exposure to credit risk.

Wherever required, the Company holds other types of collateral and credit enhancements, such as cross-collateralisation on other assets of the borrower, pledge of securities, guarantees of promoters/proprietors, hypothecation of receivables via escrow account, hypothecation of receivables in other bank accounts, etc.

The Company does not physically possesses properties or other assets in its normal course of business but makes efforts toward recovery of outstanding amounts on delinquent loans. Once contractual loan repayments are overdue, the Company initiate the legal proceedings against the defaulted customers.

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities (other than derivatives) that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

The Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors the Company''s liquidity positions (also comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity operates.

(i) Financing arrangements

The Company has access to the following funding facilities:

(ii) Maturities of financial assets and liabilities

The tables below analyse the Company financial assets and liabilities into relevant maturity groupings based on their contractual maturities.

The amounts disclosed in the table are the contractual undiscounted cash flows:

(C) Market risk

a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of the Company. To mitigate the Company''s exposure to foreign currency risk, non-rupee cash flows are monitored and derivative contracts are entered into in accordance with the Company''s risk management policies.

Sensitivity

The sensitivity of profit and loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments.

b) interest rate risk

(i) Liabilities

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. As at March 31, 2019, the Company is exposed to changes in market interest rates through debt securities, other borrowings and subordinated liabilities at variable interest rates.

Interest rate risk exposure

Below is the overall exposure of the Company to interest rate risk:

Sensitivity

The sensitivity of the statement of profit and loss is the effect of the changes in market interest rates on debt securities, other borrowings and subordinated liabilities. Below is the sensitivity of profit and loss in interest rates.

(ii) Assets

The Company''s fixed deposits are carried at amortised cost and are fixed and variable rate deposits. The Company is exposed to changes in MIBOR interest rates through fixed deposits at variable interest rates.

MIBOR interest rate risk exposure

Below is the overall exposure of the Company to MIBOR interest rate risk:

c) Price risk

i) Exposure

The Company''s exposure price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit and loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

ii) Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company''s equity and profit for the period:

4. CAPITAL MANAGEMENT

The Company''s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to comply with externally imposed capital requirement and maintain strong credit ratings

- to provide an adequate return to shareholders

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets (including investments in Subsidiary companies). In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

5. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The table below shows an analysis of assets and liabilities analysed according to when they are expected to be recovered or settled. Derivatives have been classified to mature and/or be repaid within 12 months, regardless of the actual contractual maturities.

6. TRANSFERRED FINANCIAL ASSETS

In the course of its micro finance activity, the Company makes transfers of financial assets, where legal rights to the cash flows from the asset are passed to the counterparty and where the Company retains the rights to the cash flows but assumes a responsibility to transfer them to the counterparty.

The Company has securitised its loan assets to an unrelated and unconsolidated entities. As per the terms of the agreements, the Company is exposed to first loss default guarantee amounting in range of 12% to 18% of the amount securitised and therefore continues to be exposed to significant risk and rewards relating to the underlying mortgage receivables. Hence, these loan asstes are not derecognised and proceeds received are presented as borrowings.

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

7. EMPLOYEE BENEFITS

The Company has adopted Indian Accounting Standard (Ind AS) - 19 on Employee Benefit as under :

A Defined contribution plans Provident and other funds

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and other funds which are defined contribution plans. The Company has no obligations other than this to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue.

B Defined benefit plans Gratuity

The Company has a defined benefit gratuity plan. Every employee is entitled to gratuity as per the provisions of the Payment of Gratuity Act, 1972. The scheme is funded and the scheme is managed by Life Insurance Corporation of India ("LIC"). The liability of Gratuity is recognised on the basis of actuarial valuation.

8. SEGMENT INFORMATION

The Company operates in a single reportable segment i.e. financing, which has similar risks and returns for the purpose of Ind AS 108 "Operating segments", is considered to be the only reportable business segment. The Company derives its major revenues from financing activities and its customers are widespread. Further, The Company is operating in India which is considered as a single geographical segment.

9. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

a. The Company has received income tax notice under section 143(2) of the "Income Tax Act 1961" dated March 17, 2019 for tax demand amounting to Rs. 118.12 Lakhs on account of disallowance of expenses for assessment year 2017-18. In response to such notice, the Company has filed a rectification application to the concern Additional Commissioner of Income Tax (ACIT).

b. Estimated amount of contract remaining to be executed on capital account and not provided for is Rs. 266.01 Lakhs (March 31, 2018: Rs. 391.95 Lakhs and April 1, 2017: Rs. 955.47 Lakhs).

10. EMPLOYEE STOCK OPTION PLAN / SCHEME (ESOP/ ESOS)

Pursuant to the approval accorded by shareholders at their Annual General Meeting held on July 6, 2017, the Nomination and Remuneration Committee of the Company formulated a new scheme ‘Satin Employee Stock Option Scheme 2017'' (ESOS 2017) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. ESOS is applicable to all permanent and full-time employees (as defined in the Plan), excluding promoters of the Company. The eligibility of employees to receive grants under the Plan has to be decided by the Nomination and Remuneration Committee from time to time at its sole discretion. Vesting of the options and vesting period shall take place in the manner determined by the Nomination and Remuneration Committee at the time of grant. Vesting of options shall be subject to the condition that the Grantee shall be in continuous employment with the Company and such other conditions as provided under ESOS 2017. The Exercise Price of each grant is determined by the Nomination and Remuneration Committee at the time of grant.

Presently, stock options have been granted or shares have been issued under the following scheme:

A. Satin Employee Stock Option Scheme 2009 (ESOS 2009)

B. Satin Employee Stock Option Scheme 2017 (ESOS 2017)

Satin ESOP 2010: 1,00,000 equity shares of Rs. 10/- each at a premium of Rs. 12/- were allotted to Satin Employees Welfare Trust on June 22, 2010 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

Satin ESOP II 2010: 1,50,000 equity shares of Rs. 10/- each at a premium of Rs. 15/- were allotted to Satin Employees Welfare Trust on April 21, 2011 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

ESOS Scheme 2017: All options not exceeding 3,61,400 representing 0.96% of the paid-up Capital of the company as on March 31, 2017 (or such other adjusted figure for any bonus, stock splits or consolidations or other reorganisation of the capital structure of the Company as may be applicable from time to time including the shares lying with the Trust that may remain unutilised pursuant to non-exercisability of options granted under Satin ESOS 2009, 2010 (I) and 2010 (II), to or for the benefit of permanent employees of the Company and its subsidiaries whether working in India or outside India. The said ESOS Scheme, 2017 were approved in twenty seventh Annual General Meeting of the Company held on July 6. 2017.

vii) The Company has recognised share based payment expense of Rs. 317.86 Lakhs (March 31, 2018: Rs. 189.08 Lakhs) during the year as proportionate cost.

viii) The Company has Rs. 89.24 Lakhs (March 31, 2018: Rs. 95.44 Lakhs and April 1, 2017: Rs. 99.36 Lakhs) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

(iv) (a) Disclosures relating to securitisation:-

The Company has entered into various agreements for the securitisation of loans with assignees, wherein it has securitised a part of its loans portfolio amounting to Rs. 58,437.97 Lakhs during the year ended March 31, 2019 (March 31, 2018 Rs. 1,21,410.54 Lakhs), being the principal value outstanding as on the date of the deals that are outstanding. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of investors/buyers. In terms of the said securitisation agreements, the Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual agreement terms.

(v) Detail of assignment transactions undertaken:-

The Company has entered into various agreements for the assignments of loans with assignees, wherein it has assigned a part of its loans portfolio amounting to Rs. 1,61,458.52 Lakhs during the year ended March 31, 2019 (March 31 2018 Nil), being the principal value outstanding as on the date of the deals that are outstanding. In terms of accounting policy mentioned in Significant Accounting Policies, The Company has de-recognised these loan portfolios. The Company is responsible for collection and getting servicing of this loan portfolio on behalf of investors/buyers. In terms of the said assignment agreements, the Company pays to investor/buyers on agreed date basis the prorata collection amount as per individual agreement terms.

(vi) Details of financial asset sold to Securitisation/Reconstruction Company for asset reconstruction:-

The Company has not sold financial assets to Securitisation/Reconstruction Companies for asset reconstruction in the current and previous year.

(vii) Detail of non-performing financial asset purchased/sold:-

The Company has not purchased/sold non-performing financial asset in the current and previous year.

(ix) Exposures:-

(a) Exposure to real state sector:-Nil (March 31, 2018 : Nil)

(b) Exposure to capital market:-Nil (March 31, 2018 : Nil)

(x) Details of Single Borrower Limit (SGL)/Group Borrower Limit (GBL) exceeded by applicable NBFC.

The Company does not have single or group borrower exceeding the limits.

(xi) Unsecured Advances - Refer note 8 of Balance Sheet notes

(xii) Details of financing of parent Company product:-

This disclosure is not applicable as the Company does not have any holding/parent Company.

(xiii) Registration obtained from other financial sector regulators:-

The Company is registered with following other financial sector regulators:

(a) Ministry of Corporate Affairs (MCA)

(b) Ministry of Finance (Financial Intelligence Unit)

(c) Securities and Exchange Board of India (SEBI)

(d) Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)

(xiv) Disclosure of Penalties imposed by RBi & other regulators:-

No major penalty has been imposed by RBI and other regulators during current and previous year.

(xv) Related party transactions:-

Please refer to note no 48

(xvi) Rating assigned by credit rating agencies and migration of ratings during the year-

The Credit Analysis & Research Limited has reaffirmed the MFI grading, MFI 1, during the year.

(b) Draw down from reserves:-

There has been no draw down from reserve during the year ended March 31, 2019 (Previous year: '' Nil)

(f) Overseas assets (for those with Joint Ventures and subsidiaries abroad) - Nil

(g) Off-balance sheet SPVs sponsored - N.A.

A Explanation of transition to ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 3 have been applied in preparing the financial statements for the year ended March 31, 2019, the comparative information presented in these financial statements for the year ended March 31, 2018 and in the preparation of an opening Ind AS balance sheet at April 1, 2017 (the Company''s date of transition). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

B. ind AS optional exemptions

1. Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Asset. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

2. Designation of previously recognised financial instruments

Ind AS 101 permits a first-time adopter to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

3. Share based payments

Ind AS 102 share based payments requires an entity to recognise the equity settled share based payment plans based on fair value of the stock options granted to employees instead of intrinsic value. Ind AS 101 permits a first time adopter to ignore such requirement for the options already vested as on transition date that is April 1, 2017. The Company has elected to apply this exemptions for such vested options.

4. Deemed cost for investments in subsidiaries

Ind AS 101 permits a first-time adopter to continue previous GAAP carrying value for investment in equity instrument of subsidiaries. Accordingly, the Company has elected to apply the said exemption.

5. Long term foreign currency monetary items

Ind AS 101 permits a first-time adopter to continue with the policy of the previous GAAP for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in financial statements on or before April 1, 2017.

C. ind AS mandatory exceptions

1. Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2017 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Investment in equity instruments carried at FVOCI

b) Impairment of financial assets based on expected credit loss model

2. Classification and measurement of financial assets and liabilities

Classification of financial asset is required to be made on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Further, if it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind AS shall be the new gross carrying amount of that financial asset or the new amortised cost of that financial liability at the date of transition to Ind AS.

3. De-recognition of financial assets

The Compnay have applied de-recognition principles of Ind AS 109 prospectively from the date of transition to Ind AS.

D. Reconciliations between previous GAAP and ind AS

Ind AS 101 requires an entity to reconcile total equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

NOTES TO FIRST TIME ADOPTION

1. Borrowings (including debt securities and subordinate liabilities)

Under previous GAAP, transaction costs incurred towards origination of borrowings were charged to statement of profit and loss on straight-line basis over the period of borrowing. Under Ind AS, such transaction costs are netted off from the carrying amount of borrowings on initial recognition. These transactions costs are then recognised in the statement of profit and loss over the tenure of the such borrowings as part of the interest expense by applying the effective interest rate method.

2. Security deposits received

Under previous GAAP, security deposits were initially recognised at transaction price. Subsequently, finance costs was recognised based on contractual terms, if any. Under Ind AS, such security deposits other than perpetual are initially recognised at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value is recognised in statement of profit and loss unless it quantifies for recognition as some other type of liability.

3. Loan assets

Under previous GAAP, transaction costs received towards origination of loan assets were recognised to statement of profit and loss. Under Ind AS, such transaction costs are adjusted from the carrying amount of loans on initial recognition. These transactions costs are recognised in the statement of profit and loss over the tenure of the such loans as part of the interest income by applying the effective interest rate method.

4. Security deposits paid

Under previous GAAP, security deposits were initially recognised at transaction price. Subsequently, finance income was recognised based on contractual terms, if any. Under Ind AS, such security deposits are initially recognised at fair value and subsequently carried at amortised cost determined using the effective interest rate. Any difference between transaction price and fair value is recognised in statement of profit and loss unless it quantifies for recognition as some other type of asset.

5. Financial instruments carried at fair value through profit and loss or through other comprehensive income

Under previous GAAP, investments in long-term equity instrument were carried at cost and tested for other than temporary diminution. Under Ind AS, such investments are carried either at fair value through profit and loss (FVTPL) or fair value through other comprehensive income (FVOCI) (except for investment in subsidiaries).

Under previous GAAP, investments in mutual funds were carried at cost or market value whicever is lower. Under Ind AS, such investments are carried at fair value through profit and loss (FVTPL).

6. impairment of loan assets

Under previous GAAP, the Company were created impairment allowance on loan assets basis the provisioning norms prescribed by Reserve Bank of India (''RBI''). Under Ind AS, impairment allowance has been determined based on expected credit loss (''ECL'') model.

7. Share based payment

Under the previous GAAP, the Company had the option to measure the cost of equity-settled employee share-based plan either using the intrinsic value method or using the fair value method. Under Ind AS, the cost of equity-settled share-based plan is recognised based on the fair value of the options as at the grant date.

8. Securitisation

Under previous GAAP, the Company used to de-recognise the securitised loan assets and excess interest spread income was recognised on receipt basis. Under Ind AS 109, securitised loan assets does not meet de-recognition criteria and accordingly, the Company continue to recognise such loan assets and in addition recognises a liability for the amount received. Accordingly, securitised loan assets and related liability is measured at amortised cost using effective interest method.

9. Preference share capital

Under previous GAAP, preference share capital was a part of share capital. Under Ind AS, the instrument is evaluated to determine whether it is a liability or contains both liability and equity component. If there a contractual obligation to deliver cash then, such instrument is recognised as a financial liability under Ind AS. Where the instrument contains both the features (equity and liability), it is classified as compound financial instruments and accordingly, the transaction value of the instrument is allocated to equity and liability components. Further, the liability component is subsequently measured at amortised cost.

10. Tax impact on adjustments

Retained earnings and statement of profit and loss has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

11. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit and loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes re-measurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments and their corresponding income tax effects. The concept of other comprehensive income did not exist under previous GAAP.

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Mar 31, 2018

1. General Information

Satin Creditcare Network Limited (“The Company”) is a public limited company and incorporated under the provisions of the Companies Act and having its registered office at New Delhi, India. The Company is a non-deposit accepting NonBanking Financial Company (‘NBFC-ND’) and is registered as a Non-Banking Financial Company - Micro Finance Institution (‘NBFC-MFI’) with the Reserve Bank of India (“RBI”) in November 2013. The Company is engaged primarily in providing micro finance services to women in the rural areas of India who are enrolled as members and organized as Joint Liability Groups (‘JLG’).

Note 1 (a) : During the current year, the authorised share capital of the Company was increased vide approval of equity shareholders from Rs. 1,300,000,000 divided into 55,000,000 equity shares of Rs. 10 each and 75,000,000 preference shares of Rs. 10 each to 1,400,000,000 divided into 65,000,000 equity shares of Rs. 10 each and 75,000,000 preference shares of Rs. 10 each.

(b) : During the previous year ended March 31, 2017, the authorised share capital of the Company was reclassified vide approval of equity shareholders from Rs. 1,300,000,000 divided into 40,000,000 equity shares of Rs. 10 each and 90,000,000 preference shares of Rs. 10 each to Rs. 1,300,000,000 divided into 55,000,000 equity shares of Rs. 10 each and 75,000,000 preference shares of Rs. 10 each.

Note 2 (i) : The Company allotted 1,543,187 equity shares of Rs. 10 each at an issue price of Rs. 416.67 per share including premium of Rs. 406.67 per share on preferential basis to Asian Development Bank (an entity belonging to non-promoter group).

(ii) During the year, the Company allotted 658,690 equity shares of Rs. 10 each at an issue price of Rs. 455.45 per share including premium of Rs. 445.45 per share on preferential basis to Trishashna Holdings & Investments Private Limited (an entity belonging to promoter group).

(iii) Subsequent to the approval of Board of Directors of the Company and shareholders of the Company, the working Committee of the Board, has offered for Qualified Institutions Placement for an amount upto Rs. 1,500,000,000 to Qualified Institutional Buyers in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2009, as amended and in accordance with Chapter VIII of the SEBI ICDR Regulations. The Working Committee of the Board of Directors of the Company approved the allotment of 4,918,032 equity shares of face value of Rs. 10 each to qualified institutional buyers (QIBs) at the issue price of Rs. 305 per equity share (including a premium of Rs. 295), aggregating to Rs. 1,499,999,760.

(iv) The Company allotted 2,388,059 and 597,014 equity shares of Rs. 10 each at an issue price of Rs. 335 per share including premium of Rs. 325 per share on preferential basis to Kora Investment I LLC and Nordic Microfinance Initiative Fund III KS, respectively (entities belonging to non-promoter group).

Note 3 : During the previous year ended March 31, 2017, the Company allotted 25,000,000, 12.10% Rated, Cumulative, Non-Participative, Non-Convertible, Compulsorily Redeemable Preference Shares of face value of Rs.10 each fully paid-up for cash at an issue price of Rs. 10.

Note 4 : The Company allotted 1,230,098, 0.01% Optionally Convertible, Cumulative, Redeemable Preference Shares of face value of Rs. 10 each fully paid-up for cash at an issue price of Rs. 284.53 per share. Each preference share is either convertible into equivalent number of equity shares of the Company of Rs.10 each at the option of allottee within a time frame not exceeding 12 months from the date of allotment or subject to redemption by the Company at the end of such time frame and on such terms and conditions, as may be deemed appropriate by the Board of Directors. Further, these OCRPS are converted into equivalent number of equity shares (i.e., 1,230,098 equity shares) of face value of Rs. 10 each on May 30, 2018.

Note 5 : The Company allotted 1,343,283, 0.01% Optionally Convertible, Cumulative, Redeemable Preference Shares of face value of Rs. 10 each fully paid-up for cash at an issue price of Rs. 335 per share. Each preference share is either convertible into equivalent number of equity shares of the Company of Rs.10 each at the option of allottee within a time frame not exceeding 18 months from the date of allotment or subject to redemption by the Company at the end of such time frame and on such terms and conditions, as may be deemed appropriate by the Board of Directors.

(c) Terms/ rights attached to equity shares

The Company has only one class of equity shares having face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Any dividend, if proposed by the Board of Directors, is subject to the approval of shareholders. Dividend declared and paid would be in Indian rupees. Dividends are subject to corporate dividend tax. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(e) For details relating to Employee Stock Option Plan/ Scheme (ESOP/ESOS) of the Company, Refer to Note 30.

(f) The Company has allotted 1,087,456 equity shares of Rs. 10 each at an issue price of Rs. 457.82 per share including premium of Rs. 447.82 per share on preferential basis to persons and entities belonging to promoter and non-promoter group pursuant to swap of equity shares of the Company with the shareholders of Taraashna Services Limited, “TSL” (Previously known as Taraashna Services Private Limited) with an intent to make it a subsidiary of the Company in accordance with the provisions of Chapter VII of SEBI (ICDR) Regulations, 2009. Accordingly, as per confirmation received from TSL, 7,977,239 equity shares were transferred to the Company, constituting 87.83% of the share capital of TSL and therefore becoming the subsidiary of the Company w.e.f. September 01, 2016.

(g) There are no shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issue and bought back during the last five years.

1. During the year, there has been an addition of Rs. 4,125,093,087 in the securities premium reserve on account of the following:

a) Issue of 1,543,187 equity shares to Asian Development Bank at a premium of Rs. 406.67

b) Issue of658,690 equity shares to Trishashna Holdings & Investments Private Limited at a premium of Rs. 445.45

c) Issue of4,918,032 equity shares to QIB at a premium of Rs. 295.00

d) Issue of2,388,059 equity shares to Kora Investment I LLC at a premium of Rs. 325.00

e) Issue of 597,014 equity shares to Nordic Microfinance Initiative Fund III KS at a premium of Rs. 325.00

f) Issue of 1,230,098 Optionally Convertible Redeemable Preference Shares (‘OCRPS’) to Capital First Limited at a premium of Rs. 274.53

g) Issue of 1,343,283 Optionally Convertible Redeemable Preference Shares (‘OCRPS’) to IndusInd Bank Limited at a premium of Rs. 325.00

h) Exercise of 21,100 equity shares under ESOP scheme at a premium of Rs. 420.75

2. During the year, the Company utilized a sum of Rs. 109,321,164 (Previous year : Rs. 132,015,058) from securities premium reserve towards writing off incidental expenditure pertaining to raising of share capital and non-convertible debentures.

3. Pursuant to the provision of Section 45(IC) of Reserve Bank of India Act, 1934, the Company has transferred Rs. 8,052,752 (Previous year : Rs. 48,998,410) towards Statutory Reserve Fund.

The Company allotted 1,791,044 fully convertible warrants of Rs. 10 each at an issue price of Rs. 335 per warrant including premium of Rs. 325 per warrant on preferential basis to Trishashna Holdings & Investments Private Limited (an entity belonging to promoter group) on December 28, 2017. Each warrant is convertible into or exchangeable for at an option of warrant holder, in one or more tranches, one equity share of face value of Rs. 10 each at any time after the date of allotment but on or before the expiry of 18 months from the date of allotment of the warrants.

The above are repayable/redeemed on periodic instalments of principal and interest. The sanctioned tenure of the loans outstanding as at March 31, 2018 varies from 6 months to 96 months. For the secured loans, the Company has offered security by way of hypothecation of portfolio loans arising out of its business operations generated from the respective loans and cash collateral in the form of fixed deposits. Out of above, an amount of Rs. 10,308,734,001 (Previous year: Rs. 12,592,953,797) have been guaranteed by two of the directors of the Company in their personal capacity.

2. The disclosures required under Accounting Standard 15, Employee Benefits are as follows :

(i) Defined Contribution Plan

The contribution made to various statutory funds is recognised as expense and included in Note 26 ‘Employee benefits expense’ under “Contribution to provident and other funds” in the Statement of Profit and Loss. The detail is as follows:

(ii) Defined Benefit Plan

The employee’s gratuity fund scheme is managed by Life Insurance Corporation of India (“LIC”). The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation:

The estimate rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

Enterprise best estimate of expense for the next annual reporting period is Rs. 29,164,827.

3. Employee Stock Option Plan / Scheme (ESOP/ ESOS)

Pursuant to a resolution passed by the members holding Equity shares vide Annual General Meeting held on July 06, 2017, the Company terminated and withdrawn the Satin Employee Stock Plan 2009, 2010 (I) and 2010 (II) (earlier ESOS Schemes) with immediate effect. The members also approved that the Satin Employee Stock Option Plan 2009 is valid for the options already granted (before said termination) and the vesting and exercise of options shall continue in terms of Satin Employee Stock Option Plan 2009. The members also accorded their approval and formulated a new scheme titled "Satin Employee Stock Option Scheme, 2017" (Satin ESOS 2017) in accordance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Under the new scheme, the total pool of options, which can be granted to eligible employees of the Company and its subsidiaries, is 361,400. During the current year, the Company has granted 145,200 number of options to the eligible employees of the Company and its subsidiaries. The options shall vest in three equal instalments every year, after expiry of one year from the date of grant of option.

As at March 31, 2018, the Satin Employee Welfare Trust holds 428,200 equity shares under the Satin ESOS 2017. The pool of options also includes such number of shares lying with the Trust pursuant to non-exercisability of options outstanding under the ‘earlier ESOS Schemes’ of the Company. Forfeited/lapsed/expired options under the Satin ESOS 2017 can be reissued by the Company at its discretion in accordance with provisions of the applicable laws and the provisions of Satin ESOS 2017.

a) Employee stock option schemes:

Satin ESOP 2009: 425,000 equity shares of Rs. 10 each at a premium of Rs. 10 each were allotted to Satin Employees Welfare Trust on November 27, 2009.

Details of grant and exercise of such options are as follows;

Satin ESOP 2010: 100,000 equity shares of Rs. 10 each at a premium of Rs. 12 were allotted to Satin Employees Welfare Trust on June 22, 2010 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

Satin ESOP II 2010: 150,000 equity shares of Rs. 10 each at a premium of Rs. 15 were allotted to Satin Employees Welfare Trust on April 21, 2011 (The scheme was terminated vide Shareholders Resolution dated July 6, 2017 and the outstanding options were transferred to Satin ESOS 2017).

Satin ESOS Scheme 2017: All options not exceeding 361,400 representing 0.96% of the paid-up capital of the company as on March 31, 2017 (or such other adjusted figure for any bonus, stock splits or consolidations or other reorganization of the capital structure of the Company as may be applicable from time to time including the shares lying with the Trust that may remain unutilized pursuant to non-exercisability of options granted under Satin ESOP 2009, 2010 (I) and 2010 (II), to or for the benefit of permanent employees of the Company and its subsidiaries whether working in India or outside India. The said ESOS Scheme, 2017 were approved in twenty seventh Annual General Meeting of the Company held on July 6, 2017.

iv) Employee wise details (name of employee, designation, number of options granted during the year, exercise price)

(a) Following employees has received a grant in the reporting year of option amounting to 5% or more of option granted during that year;

(b) There are no identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

4. Relevant disclosures in terms of the ‘Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards as prescribed from time to time.

i) The estimated fair value of each stock option granted in the general employee stock option plan is Rs. 420.75 and Rs. 166.98. This was calculated by applying Black Scholes Model ofvaluation. The model inputs are as follows.

iii) Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with ‘Accounting Standard 20 - Earnings Per Share’ issued by ICAI or any other relevant accounting standards as prescribed from time to time. For the current year, Diluted EPS is Rs. 0.25 (Refer note 39).

5. The Company has Rs. 9,514,000 (Previous year: Rs. 9,936,000) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

6. Segment reporting

The Company operates in a single reportable segment i.e. financing, which has similar risks and returns for the purpose of Accounting Standard 17, Segment Reporting specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Further, the Company operates in a single geographical segment i.e. domestic.

7. Portfolio loan assets

During the previous year ended March 31, 2017, the Company re-classified its portfolio assets by deferring the classification of an existing standard asset as substandard as per RBI vide its notification no. DBR.No.BP.BC.37/21.04.048/2016-17 dated November 21, 2016 providing an additional 60 days for recognition of a loan account as substandard and this applied to all dues payable between November 1, 2016 and December 31, 2016. Further, an additional 30 days was provided in addition to 60 days and also to defer the down grade of an account that was standard as on November 1, 2016, but would have become NPA for any reason during the period November 1, 2016 to December 31, 2016, by 90 days from the date of such downgrade vide its notification DBR.No.BP.BC.49/21.04.048/2016-17 dated December 28, 2016. Accordingly, the accounts aggregating to Rs. 3,928,935,110 which would have become non-performing assets, due to demonetization impact over repayments by micro and SME borrowers, during the stated period were classified as standard assets as on March 31, 2017.

8. Contingent liability and capital commitment:

a. Estimated amount of contract remaining to be executed on capital account and not provided for is Rs. 39,195,065 (Previous year: Rs. 95,546,945).

b. Others:

9. Related party disclosure

A. List of related parties:

Names of related parties and description of relationship.

Key Managerial Personnel

Mr. H P Singh, Chairman cum Managing Director

Subsidiaries

Taraashna Services Limited (w.e.f. September 01, 2016) Satin Housing Finance Limited (w.e.f. April 17, 2017)

Chief Financial Officer

Mr. Jugal Kataria

Relative of Key Managerial Personnel

Mr. Satvinder Singh Mrs. Anureet H P Singh

Influence of Key Managerial Personnel and Relatives

Niryas Food Products Private Limited

Satin (India) Limited

Satin Media Solutions Limited

(vi) Details of financial asset sold to Securitisation/Reconstruction Company for asset reconstruction:-

The Company has not sold financial assets to Securitisation/Reconstruction Companies for asset reconstruction in the current and previous year.

(vii) Detail of non-performing financial asset purchased/sold:-

The Company has not purchased/sold non-performing financial asset in the current and previous year.

(ix) Exposures:-

(a) Exposure to real state sector:-Nil (Previous year : Nil)

(b) Exposure to capital market:-Nil (Previous year : Nil)

(x) Details of Single Borrower Limit (SGL)/Group Borrower Limit (GBL) exceeded by applicable NBFC.

The Company does not have single or group borrower exceeding the limits.

(xi) Unsecured Advances - Refer note 18 and 23 of Balance Sheet notes

(xii) Details of financing of parent Company product:-

This disclosure is not applicable as the Company does not have any holding/parent Company.

(xiii) Registration obtained from other financial sector regulators:-

The Company is registered with following other financial sector regulators:

(a) Ministry of Corporate Affairs (MCA)

(b) Ministry of Finance (Financial Intelligence Unit)

(c) Securities and Exchange Board of India (SEBI)

(xiv) Disclosure of Penalties imposed by RBI & other regulators:-

No penalty has been imposed by RBI and other regulators during current and previous year.

(xv) Related party transactions:-Please refer to note no. 37 above

10. The figures of the previous year have been regrouped / reclassified wherever necessary to make them comparable with the figures of the current year.

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Mar 31, 2017

1. Relevant disclosures in terms of the ''Guidance note on accounting for employee share-based payments'' issued by ICAI or any other relevant accounting standards as prescribed from time to time.

i) The Company had nil share-based payment arrangements during the year ended March 31, 2017.

ii) The estimated fair value of each stock option granted in the general employee stock option plan is Rs. 420.75 as on December 02, 2016. This was calculated by applying Black Scholes Model of valuation. The model inputs are as follows.

iv) Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with ''Accounting Standard 20 - Earnings Per Share'' issued by ICAI or any other relevant accounting standards as prescribed from time to time. For the current year, Diluted EPS is Rs.7.05 (Refer note 30 (6)).

2. The Company has Rs. 9,936,000.00 (Previous year Rs. 10,480,860.00) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

3. The Company has allotted 1,087,456 (Ten Lakhs Eighty Seven Thousand Four Hundred And Fifty Six Only) equity shares of Rs. 10/- each at an issue price of Rs. 457.82 per share including premium of Rs. 447.82 per share on preferential basis to persons and entities belonging to promoter and non-promoter group pursuant to swap of equity shares of the Company with the shareholders of Taraashna Services Limited, "TSL" (Previously known as Taraashna Services Private Limited) with an intent to make it a subsidiary of the company in accordance with the provisions of Chapter VII of SEBI (ICDR) Regulations, 2009. Accordingly, as per confirmation received from TSL, 7,977,239 (Seventy Nine Lakhs Seventy Seven Thousand Two Hundred and Thirty Nine only) equity shares were transferred to the Company, constituting 87.83% of the share capital of TSL and therefore becoming the subsidiary of the Company w.e.f. September 01, 2016.

4. The Company vide special resolution as approved by members of the Company in the annual general meeting held on July 30, 2016, came out with offer for Qualified Institutions Placement for an amount up to Rs. 250 Crores to Qualified Institutional Buyers in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2009, as amended and in accordance with Chapter VIII of the SEBI ICDR Regulations. The Working Committee of the Board of Directors of the Company at its meeting held on October 3, 2016 approved the allotment of4,529,970 (Forty Five Lakhs Twenty Nine Thousand Nine Hundred And Seventy Only) Equity Shares of face value of Rs. 10/- each to qualified institutional buyers (QIBs) at the issue price of Rs. 551.88 per Equity Share (including a premium of Rs. 541.88), aggregating to Rs. 249,99,99,843.60 (Rupees Two Hundred Forty Nine Crores Ninety Nine Lakhs Ninety Nine Thousand Eight Hundred and Forty Three and Sixty Paise Only).

5. During the year, the Company has allotted 25,000,000, 12.10% Rated, Cumulative, Non-Participative, Non-Convertible, Compulsorily Redeemable Preference Shares of face value of Rs.10/- each fully paid-up for cash at an issue price of Rs. 10/- vide board resolution passed on June 10, 2016 in accordance with the provisions of Section 42, 55 and 62 of the Companies Act, 2013 read with Rules made there under of The Companies (Share Capital and Debentures) Rules, 2014.

1. During the year, there has been an addition of Rs. 2,943,150,090.52 in the share premium reserve on account of the following:

a) Issue of 1,087,456 equity shares to TSL at a premium of Rs.447.82.

b) Issue of4, 529,970 equity shares to QIB at a premium of Rs.541.88.

c) Exercise of27,243 equity shares under ESOP Scheme at a premium of Rs.53.79.

2. During the year, the Company utilized a sum of Rs. 132,015,058.00 (Previous year Rs.28,121,021.00) from Securities Premium Reserve towards writing off incidental expenditure pertaining to raising share capital and non-convertible debenture as per the provisions of Section 52 of the Companies Act, 2013.

3. The Company has Rs. 9,936,000.00(Previous year Rs. 10,480,860.00) recoverable from Satin Employees Welfare Trust pursuant to ESOP schemes.

4. There is an addition of Rs.99,888.00 in general reserve on account of 1,857 equity shares not exercised by employees under ESOP Scheme during the year.

5. Pursuant to the provision of section 45 (IC) of Reserve Bank of India Act, 1934, the Company has transferred Rs. 48,998,410.00 (Previous Year Rs.115,881,030.00) towards Statutory Reserve Fund.

6. During the financial year 2014-15, the Company has borrowed 10 million US Dollars from World Business Capital Inc for the period of eight years for the purpose of working capital as the External Commercial Borrowings (ECB) under the automatic route of the Reserve Bank of India. The repayment of principal and interest of the ECB is hedged against the foreign currency fluctuations as the Company has contracted the risk fluctuation with a commercial bank at a predetermined rate to settle the foreign exchange liability. The details of ECB as on March 31, 2017 is as follows:

At the year end, the Company as per the fair accounting practice and financial prudence has created a foreign exchange fluctuation reserve to reflect the difference in value of outstanding loan at the Balance Sheet date. This foreign exchange fluctuation reserve will be finally settled at the time of full and final settlement of ECB loan by the Company. The interest payment on this ECB loan is accounted for at the predetermined rate and out of which the payment is made to the borrower by the commercial bank as per contract and the total amount is charged to the statement of profit and loss as a part of interest cost.

6. As per the terms of issue regarding the Secured Redeemable, Non-Convertible Debentures, the security offered by the Company is the hypothecation of present and future receivable equivalent to the outstanding amount against each series of Non-Convertible Debenture. The above mentioned Non-Convertible Debentures are freely tradable and listed on the BSE Limited.

7. For ECB refer Note No.4 (6).

8. For Term loans refer Note No. 9 (1).

(ii) Gratuity

The employee''s gratuity fund scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation:

(iii) Leave Encashment

The obligation for leave encashment is recognized based on the present value of obligation based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1. For Provision for Leave Encashment and Gratuity refer Note No.6.

2. The provisioning norms of the Company during the year has been changed from higher of a) 1% of the outstanding loan portfolio excluding securitization to 1.75% of the outstanding loan portfolio including securitization or b) 50% of the aggregate loan installments which are overdue for more than 90 days and less than 180 days and 100% of the aggregate loan installments which are overdue for 180 days or more. As a result, the impact of the percentage change from 1% to 1.75% on the changed portfolio by including securitization is Rs. 259,875,990.74. There has been a further increase in the provision by Rs. 30,587,352.42 due to the inclusion of securitized portfolio at 1%. Hence, the total effect in the statement of profit and loss account is Rs. 380,437,684.78 on standard and non-performing assets during the year.

The Company complies with the prudential norms of the Reserve Bank of India (RBI) with respect to income recognition, asset classification and provisioning. As per notification no. DNBR (PD) CC.No.047/03.10.119/2015-16 dated July 1 2015 updated as on April 20, 2016 issued by Reserve Bank of India, provision of higher of 1% of the outstanding portfolio as at March 31, 2017 or 50% of the aggregate loan installments which are overdue for 90 days and more and less than 180 days and 100% of the aggregate loan installments which are overdue for 180 days or more has to be maintained.

The provision made by the Company as on March 31, 2017 stands at Rs. 608,553,512.33 (Previous year Rs. 227,472,401.54) towards provision for non-performing assets and contingent provision against standard assets. This includes an amount of Rs.542, 529,998.73(Previous year Rs.206, 256,941.92) as Contingent provision against standard assets.

9. Due to demonetization, RBI vide its notification no. DBR.No.BP.BC.37/21.04.048/2016-17 dated November 21, 2016 has provided an additional 60 days for recognition of a loan account as substandard and this applies to all dues payable between November 1, 2016 and December 31, 2016. Further, an additional 30 days was provided in addition to 60 days and also to defer the down grade of an account that was standard as on November 1, 2016, but would have become NPA for any reason during the period November 1, 2016 to December 31, 2016, by 90 days from the date of such downgrade vide its notification DBR.No.BP.BC.49/21.04.048/2016-17 dated December 28, 2016.

Accordingly, the accounts aggregating to Rs.3,928,935,110.19 which would have become non-performing assets, due to demonetization impact over repayments by micro and SME borrowers, during the stated period have been classified as standard assets as on March 31, 2017.

10. In respect of Loan against Property, the Company has provided First Loss Default Guarantee in the form of Cash Collateral amount to Reliance Capital Limited ("RCL") for 5% of outstanding amount. In the event of the default by the customer in which the installment are overdue for a period exceeding 90 days, the Company stands as a guarantor to make good the loss to RCL. During the year, the Company has written off an amount of Rs. 19,083,042.00 (Previous Year Nil) in respect of loans which are overdue by more than 90 days, doubtful for recovery and as claimed by RCL.

11. In respect of securitization transactions, the Company has given First Loss Credit Enhancement by way of cash collateral to cover the losses due to defaults and prepayments which is a specified percentage of the pool principal. During the year, the Company has booked loss of Rs.38, 538,766.00 (Previous Year Nil) on one securitization transaction as the cash collateral has been revoked due to delay in recovery of payments during demonetization period.

12. During the year, the Company has changed its policy on write off of portfolio loans from an overdue of more than 180 days to an overdue of more than 360 days w.e.f. February 10, 2017. The impact of the deferment has been reduction in the write off amount by Rs.79, 940,138.55 as compared to previous year.

13. The company has changed its provision policy from higher of a) 1% of the outstanding loan portfolio excluding securitization to 1.75% of the outstanding loan portfolio including securitization or b) 50% of the aggregate loan installments which are overdue for more than 90 days and less than 180 days and 100% of the aggregate loan installments which are overdue for 180 days or more. As a result, the impact of the percentage change from 1% to 1.75% on the changed portfolio by including securitization is Rs. 259,875,990.74. There has been a further increase in the provision by Rs. 30,587,352.42 due to the inclusion of securitized portfolio at 1%. Hence, the total effect in the statement of profit and loss account is Rs. 380,437,684.78 on standard and non-performing assets during the year.

Note No.30

14. Estimated amount of contract remaining to be executed on capital account and not provided for is Rs.955.47 Lacs (Previous Year Rs.709.38 Lacs).

15. The Company operates in a single reportable segment i.e. financing, which has similar risks and returns for the purpose of AS 17 on ''Segment Reporting'' specified under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014.The Company operates in a single geographical segment i.e. domestic.

Note: As provisions for gratuity and leave benefits are made for the Company as a whole, the amounts pertaining to the key Management Personnel are not specifically identified and hence are not included above.

16. Earnings Per Share:

In accordance with the Accounting Standard 20 of ''Earnings Per Share'' as notified by the Companies (Accounting Standards) Rules, 2015:

17. Additional disclosures as required by the Reserve Bank of India: -

(A) Disclosure as per circular no. RBI/2014-15/299 DNBR(PD) CC.No.002/03.10.001/2014-15, dated November 10, 2014 issued by RBI are as under:-

(vi) Details of financial asset sold to Securitization/Reconstruction Company for asset reconstruction:-

The Company has not sold financial assets to Securitization/Reconstruction Companies for asset reconstruction in the current and previous year.

(vii) Detail of non-performing financial asset purchased/sold:-

The Company has not purchased/sold non-performing financial asset in the current and previous year.

(ix) Exposures:-

(a) Exposure to Real State Sector:-Nil(Previous Year Nil)

(b) Exposure to Capital Market:-Nil(Previous Year Nil)

(x) Details of financing of parent Company product:-

This disclosure is not applicable as the Company does not have any holding/parent Company.

(xi) Registration obtained from other financial sector regulators:-

The Company is registered with following other financial sector regulators:

(a) Ministry of Corporate Affairs (MCA)

(b) Ministry of Finance (Financial Intelligence Unit)

(c) Securities and Exchange Board of India (SEBI)

(xii) Disclosure of Penalties imposed by RBI & other regulators:-

The RBI conducted the inspection of the Company during the financial year and the inspection report is pending to be received from RBI. No penalty has been imposed by RBI and other regulators.

(xiii) Related party transactions:-

Please refer Note No.30 (4)

(xiv) Rating assigned by credit rating agencies and migration of ratings during the year-

The Credit Analysis& Research Limited has reaffirmed the MFI grading, MFI 1, during the year.

During the year, the Company''s various instruments were rated, the details of these ratings are as under:-

18. With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by Ministry of Corporate Affairs, the Company has undertaken activities as per the Corporate Social Responsibility ("CSR") Policy. During the financial year 2016-17, the Company has incurred a sum of Rs. 10,500,000.00 (Previous Year 5,100,000.00) towards corporate social responsibilities in accordance with section 135 of the Companies Act 2013.

L1. The figures of the previous year have been regrouped / reclassified wherever necessary to make them comparable with the figures of the current year.

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Mar 31, 2016

1. Terms/rights attached to equity shares.

The Company has only one class of equity shares having par value of
Rs.10/- per shares. Each holder of equity shares is entitled to one vote
per share. Any dividend, if proposed by the Board of Directors is
subject to the approval of shareholders.

2. Satin Employees Welfare Trust has transferred 1,98,457 Equity
Shares to various employees of the Company. At present, Satin Employees
Welfare Trust holds 2,26,543 equity shares under Satin ESOP 2009 and
1,00,000 equity shares under Satin ESOP 2010 and 1,50,000 equity shares
aggregating to 4,76,543 Equity Shares as on 31st March, 2016.

a) Employee stock option schemes:

Satin ESOP 2009: 4,25,000 equity shares of Rs. 20/- each (including
premium of Rs. 10/- each) were allotted to Satin Employees Welfare Trust
on 27th November 2009. Out of which 1,50,000 Options were granted to 2
employees on 12th January 2010. The entire options are properly vested,
and exercised by the employees and accordingly transferred to their
DEMAT account. The Company has also granted 98,300 Options to 29
employees on 02nd December, 2013. Out of 98,300 Equity Shares, 25,824
Equity Shares were exercised and transferred to 25 Employees in
Financial Year 2014-15 and 22,633 Equity Shares were exercised and
transferred to 23 Employees in Financial Year 2015-16.

Satin ESOP 2010: 1,00,000 equity shares of Rs. 22/- each (including
premium of Rs. 12/- each) were allotted to Satin Employees Welfare Trust
on 22nd June, 2010.

Satin ESOP II2010: 1,50,000 equity shares of Rs. 25/- each (including
premium of Rs. 15/- each) were allotted to Satin Employees Welfare Trust
on 21st April, 2011.

4. The Company has Rs. 10,480,860.00 (Previous year Rs. 10,933,520.00)
recoverable from Satin Employees Welfare Trust pursuant to ESOP
schemes.

5. During the year Company has allotted 3,230,000 Equity Shares of
face value of Rs. 10/- each at an issue price of Rs.130/- including a
premium of Rs.120/- each to the persons belonging to promoter and
non-promoter group and 2,870,000Fully Convertible Warrants were also
allotted to the same persons at an issue price of Rs.130/- each
convertible into or exchangeable for one Equity Shares of face value
of Rs. 10/- each within 18 months from the date of Allotment i.e. June
3,2015.

6. Further, the person to whom the warrants were allotted on June 3,
2015 have exercised their option for exchange of warrants into Equity
Share and accordingly the Company has allotted 1,470,000 Equity Shares
pursuant to conversion of equivalent number of warrants to persons
belonging to Promoters Group vide resolution passed by the Board of
Directors in their Meeting held on February 10,2016.Further, 1,400,000
Equity Shares were also allotted pursuant to conversion of equivalent
number of Warrants vide resolution dated March 21, 2016 passed by the
Working Committee of the Board of Directors.

The objective of preferential allotment of equity shares is to fund the
growth and operations of the Company. A portion of the proceed of
investment received from the concerned promoters was used to redeem 12%
Cumulative, Rated, Non- participative, Non-Convertible, Compulsory,
Redeemable 6,000,000 Preference Shares on November 27,2015

1. For Provision for Leave Encashment refer Note No.6.

2. As per prudential norms prescribed by the Reserve Bank of India on
income recognition and provisioning for Standard/Non-Performing Assets,
a provision of Rs. 227,472,401.54 (Previous year Rs. 146,447,720.22)
stood at 31st March 2016 towards provision for non-performing assets
and contingent provision against standard assets. This includes an
amount of Rs. 206,256,941.92(Previous year Rs. 144,329,067.41) as
Contingent provision against standard assets as per notification no.
BNBR.009/CGM(CDS)-2015 dated March 27th, 2015 issued by Reserve Bank
Of India. As per the said notification the same has been shown as
"Provision for Non-Performing Assets and Contingent provisions against
Standard Assets" under "Short-Term Provisions".

3. The Company has followed the following provisioning norms during
the current and previous year:

The aggregate loan provision is maintained by the Company at any point
of time shall not be less than the higher of:-

a) 1% of the outstanding loan portfolio, or

b) 50% of the aggregate loan installments which are overdue for more
than 90 days and less than 180 days and 100% of the aggregate loan
installments which are overdue for 180 days or more.

7. With the enactment of the Companies Act, 2013 and the Companies
(Corporate Social Responsibility) Rules, 2014 read with various
clarifications issued by Ministry of Corporate Affairs, the Company has
undertaken activities as per the Corporate Social Responsibility
("CSR") Policy. During the financial year 2015-16, the Company has
incurred a sum of Rs. 5,100,000.00 (Previous Year 2,064,260.00) towards
corporate social responsibilities in accordance with section 135 of the
Companies Act 2013.

8. The figures of the previous year have been regrouped/ reclassified
wherever necessary to make them comparable with the figures of the
current year.

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Mar 31, 2015

1. In the opinion of the Management, amount receivable under Loan contracts are good for recovery unless otherwise stated. An amount of Rs 9,70,65,587.70(Pervious Year —Rs. 9,09,45,042.44) leaden will lach off/ provided financially the opinion of management, the amounts written off as bad debts are not recoverable despite various steps taken by the Company

2. For Provision for Standard/Non Performing Assets, refer Note No.9(2).

3. Estimated against of contract remaining to be executed on capital account and not provided for Rs.306.74 Lacs (Previous Year Rs.401.49Lack).

4. The Company operates in a single reportable segment i e. financing, which has similar risks and returns for the purpose of AS 17 on 'Segment Reporting' specified under section 133 of the Companies Act 2013,read with Rule 7 of the Companies (Accounts) Rules 2014.The Company operates in a single geographical segment i e. domestic.

5. The Company has not discontinued any operations hence there is no profit/loss on this account.

6. Based on the information available with the company, there is no outstanding dues to suppliers registered under "The Micro, Small and Medium Enterprises Development Act 2006 as at 31st March 2015 (Previous year Nil)

7. Additional disclosures as required by the Reserve Bank of India: -

(A) Disclosure as per circular no. RBI/2014-15/299 DNBR(PD) CC. No. 002/03.10.001/2014-15, dated 10th November 2014 issued by RBI are as under:-

(i) Exposures

(a) Exposure lo Real Stale Sector:-NU (Previous Year Nil)

(b) Exposure to Capital Market-Nil (Previous Year Nil)

(ii) Details of financing of parent Company product:-

This disclosure is not applicable as the Company does not have any holding' parent Company.

(iii) Registration obtained from other financial sector regulators:-

The Company is registered with following other financial sector regulators :

(a) Ministry of Corporate Affairs

(b) Ministry of Finance (Financial Intelligence Unit)

(iv) Disclosure of Penalties imposed by RBI & other regulators

The RBI conducted the inspection of the Company during the financial year, their findings have been suitably addressed and replied No penalty has been imposed by RBI and other regulators.

(v) Related party transactions s- Please refer Note No.26(4).

(vi) Rating assigned by credit rating agencies and migration of ratings during the year-

The Company has received a credit rating BBB-
8. With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various classifications issued by Ministry of Corporate Affairs, the Company has undertaken activities as per the Corporate Social Responsibility ("CSR") Policy. During the financial year 2014-15, the Company has incurred a sum of Rs. 20,64,260.00 towards corporate social responsible liabilities in accordance with section 135 of the Companies Act 2013.

9. The figures of the previous year have been regrouped / reclassified wherever necessary to make them comparable with the figures of the current year.

---

Mar 31, 2014

Note No.1

1. Estimated amount of contract remaining to be executed on capital account and not provided for Rs. 401.49 Lacs (Previous Year Rs. 18.83 Lacs).

2. Contingent Liability: On account of guarantees given by the Company:

(Rs.in Lacs)

Particular, As at 31.03.20141 As at 31.03.20131

On account of managed portfolio 3,425.08 2,270.25

Income Tax pending appeal 2.47 -

Total 3,427.55 2,270.25

3. The Company mainly operates in only one segment - Microfmance Loans, hence the Accounting Standards - 17, as notified in Companies (Accounting Standard Rules, 2006) on segment reporting is not applicable to the Company.

4. Related party disclosures in terms of Accounting Standard 18 issued by The Institute of Chartered Accountants of India is as follows:

5. Earnings Per Share

In accordance with the Accounting Standard 20 of 'Earnings Per Share' as notified by the Companies (Accounting Standards) Rules, 2006:

6. The Company has not discontinued any operations hence there is no profit/loss on this account.

7. Based on the information available with the company there is no outstanding dues to suppliers registered under "The Micro, Small and Medium Enterprises Development Act 2006" as at 31st March, 2014 (Previous year Nil).

8. Additional disclosures as required by the Reserve Bank of India: -

(a) Disclosure as required by Paragraph 10 of Non Banking Financial (Non - Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 is as under:

9. The figures of the previous year have been regrouped / reclassified wherever necessary to make them comparable with the figures of the current year.