Notes to Accounts of Usha Financial Services Ltd.

Mar 31, 2024

2.11 Provisions, contingent liabilities and contingent assets

A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are
determined based on best estimates required to settle the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management estimates. Loss contingencies arising from claims,
litigation, assessment, fines, penalties, etc., are recorded when it is probable that a liability has been incurred and the
amount can be reasonably estimated

2.12 Classification and provisioning on receivables from financing activities

• Receivable from financing activities are recognised on disbursement of loan to customers. The details of the policy are
given below:

• Receivable from financing activities are classified as standard, sub - standard and doubtfitl assets and provided for as per
the Company s policy and Management’s estimates, subject to the minimum classification and provisioning norms as per
the Master Direction - Non-Banking Financial Company - Non-Systemically Important Non-Deposit taking Company
(Reserve Bank) Directions, 2016.

d) Under exceptional circumstances, Management may renegotiate loans by rescheduling repayment terms for customers who
have defaulted in repayment but who appear witling and able to repay their loans under a longer term agreement.
Rescheduled Standard Assets are classified / provided for as Sub-Standard Assets as per (b) above which classification /
provisioning is retained for a period of 1 year of satisfactory performance. Rescheduled Non Performing Assets are not
upgraded but are retained at the original classification / provisioning for a period of 1 year of satisfactory performance.

2.13 Operating cycle

Assets and liabilities are classified as current and non-current based on the operating cycle which has been estimated to be 12
months. All assets and liabilities which are expected to be realized and settled, within a period of 12 months from the date of
Balance sheet have been classified as current and other assets and liabilities are classified as non-current. All Non-Performing
Assets are classified as non-current.

Note No. S^iil

Terns and conditions of secured loans and nature of security

a. During the year the company has issued following NCD as mentioned below¬
- 500 Non Convertible Debentures(Series K) at the face value of Rs. 100000 each aggregating to Rs. 5,00,00,000 at
the coupon rate of 12%. These NCDs will mature in Sept 2026.

b. NCDs are secured byway of exclusive charge on identified pool of assets

c. Vehicle Loans HDFC Bank were secured against hypothecation of respective vehicles.

d. Secured Term loans from Banks and Financial institutions are secured by hypothecation of receivables as per their
respective loan agreements.

e. Term Loan form State bank of India & AU Small Finance Bank is further secured by way of collateral security of
a Residential Property and TL from City Union Bank is secured with Commercial Property held by UFSL.

f. Term loans from Grow Money Capital Pvt Ltd, Alwar Genera! Finance Co Pvt Ltd, MAS Financial Services Ltd,
TATA Capital Services Ltd and South Indian Bank are further secured by cash collateral in the shape of Fixed
deposit/ security deposit as per their loan agreement in addition to hypothecation of receivables.

37 Other disdosures/information

Additional information required as per Schedule III of the Companies Aci, 2013 :

(i) Details of benami property held

No proceeding!; have been milled or are pending against the Company as at March 31,2024 for holding benami property under the Benami Transactions (Prohibition) Act (45of i 988) as
amended and rules made thereunder.

(ii) Willful defaulter

The company is not declared willful defaulter by any bank, financial institution or lender as at March 31,2024.

(iii) Relationship with struck off companies

There arc no transactions made by the Company during the year with struck off companies as at March 31,2024.

(iv) Compliance with number of layers of companies

The Company does not have any subsidiary or Associate or Joint Venture company during the year.

(v) Compliance w ith approved scheme(s) of arrangements

During the year, no scheme of arrangements in relation to the Company has been approved by the competent authority in terms of Section 232 to 237 of the Companies Act,20[3, Accordinsiv
this clause is not applicable to the company. ⁶ 3''

(vi) Utilization of borrowed funds and share premium

« “77 ^bU!i"T 7 “^{mpany ffantS U}™^{S and advances ,hc basis of} «™.iy.’guunmtee provided by the Borrawur/CtHbormwor. These transactions arc conducted after

g proper due diligence, Other than transactions described above, during the year tire Company has not advanced or [end or invested funds [either train the borrowed funds or share
premium or any other sources or kind of tends) to any p™„ or entity, including foreign entity ([ntennediaries) with the understanding (whether

Intermediary shall (a directly or indirectly lend or invest ,n other persons or entities identified in any manner whatsoever by or on behalf of Che Company (Uftimate Beneficiaries) or (b) provide
any guaranlee secunty or the Like to or on behalf of the ultima* benefleiar.es The Company has not received any fund from any poson or entity, including foreign entity (Funding Parti) !ith the

^ , P ^ mil ''ⁿ TV''- °^thT^SC2^tha'' ^COmPa"^{y Sha}" ^{(a> J}''^{rertly i}“^lireCtl)'' ^le0tl ” ^inVeS''^{in 0ther} P^ers™^{s or} «•>*''<» tdcnlifiod in any imnper whatso^r by or on

behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(vii) Undisclosed income

The Company does not have any unracorded transactions in the books of account which have been surrendered or disclosed as income during the year in the tax assessment under the Income Tax
(vlii) Transactions in crypto currency or virtual currency

The Company has not traded or invested in crypto currency of virtual currency during the year ended March 31. 2024.

(ii) Revaluation of property, plant & equipment and intangible asset

Titc Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the year ended March 31, 2024.

(*) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are pending to be registered with the Registrar of Companies as on March 31,2024.

38 Previous year figures have been regrouped/reclassilied to confirm to current year classification

As per our report of even date Fur and on behalf of the Board af Directors

For KRA & Co. _USHA FINANCIAL SERVICES LIMITED f J /O

Chartered Accountants ... ^ . . , __ ( '' /

Frnrn Regd. No.02^6bN

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^{Partncr U} M-W—'' DIN-01941985 f Jg f U\ 11— /tlN-078f«5^7 / *

Membership No.503150 ^ ^V MVl/A ~ J ^DIN.U^W^Z/

Placet Mew Etelhi CA Prashant Raght^bF

Datcd: 05-Of. frjlf _CFO -- Company Secretary

M.No. : 450716 M.No: 65161