Auditor Report of Equitas Small Finance Bank Ltd.

Mar 31, 2025

We have audited the accompanying financial statements
of Equitas Small Finance Bank Limited (the "Bank"), which
comprise the Balance Sheet as at March 31, 2025, the
Profit and Loss Account and the Cash Flow Statement for
the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and
other explanatory information (hereinafter referred to as the
"financial statements").

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid financial
statements give the information required by Section 29 of
the Banking Regulation Act, 1949 as well as the Companies
Act, 2013, as amended (the "Act") in the manner so required
for Banking Companies and give a true and fair view in
conformity with the accounting principles generally accepted
in India, including the Accounting Standards prescribed under
section 133 of the Act, read with rules made thereunder, of
the state of affairs of the Bank as at March 31, 2025, and its
profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs), as specified
under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the ''Auditor''s
Responsibilities for the Audit of the Financial Statements''
section of our report. We are independent of the Bank in
accordance with the ''Code of Ethics'' issued by the Institute
of Chartered Accountants of India(ICAI) together with the
ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the
Rules made there under, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
ICAI ''s Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements for the financial year ended March 31,
2025. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on
these matters. For each matter below, our description of how
our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No.	Key Audit Matters	How our Audit Addresses our Key Audit Matters
Identification of non-performing advances and provisioning for advances
1	Advances form a material portion of the Bank''s assets and the quality of the Bank''s loan portfolio is measured in terms of the proportion of non-performing assets (NPAs) to the total loans and advances. Identification, classification and provisioning of NPAs are governed by the prudential norms on income Recognition and Asset Classification ("IRAC") issued by the Reserve Bank of India ("RBI") which include rule-based and judgemental factors. Management is also required to make estimates of stress, recoverability issues, and security erosion in respect of specific borrowers or groups of borrowers, on account of specific factors that may affect such borrowers/groups. In view of the significance of this area to the overall audit of financial statements, it has been considered as a key audit matter.	We considered the Bank''s accounting policies for NPA identification, and provisioning and have assessed the compliance with the IRAC norms prescribed by the RBI. We tested the operating effectiveness of the controls (including application and IT dependent controls) for borrower wise classification of loans in the respective asset classes viz., standard, sub-standard, doubtful and loss with reference to their days-past-due (DPD) status. We considered the special mention accounts ("SMA") reports submitted by the Bank to the RBI''s central repository of information on large credits (CRILC) and made inquiries of personnel in the Bank''s credit and risk departments regarding indicators of stress, perceived risk and mitigating steps taken and/ or the occurrence of specific event(s) of default or other factors affecting the loan portfolio/particular loan product category, that may affect NPA identification and/or provisioning. Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRAC norms and Bank policy. We performed analytical procedures which considered both financial and non¬ financial parameters, in relation to identification of NPAs and provisioning there against.

Information Technology ("IT") Systems and Controls impacting Financial Reporting
2	The IT environment of the Bank is complex and involves a large number of independent and interdependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Bank. The IT infrastructure is critical for smooth functioning of the Bank''s business operations as well as for timely and accurate financial accounting and reporting. IT general controls include user access management and change management across applications, networks, database, and operating systems. Due to the pervasive nature and complexity of the IT environment as well as its significance in relation to accurate and timely financial reporting we have identified this area as a key audit matter.	As part of our Audit, we have carried out testing of the IT general controls, application controls and IT dependent manual controls of the financially significant applications. We have gained an understanding of IT controls framework through Walkthrough of processes. We have referred to the reports of Information Systems Audit. We have also tested the design and operating effectiveness of the Bank''s IT general controls in the nature of controls over logical access, change management, and other aspects of IT controls over the key information systems that are critical to financial reporting. These included testing that requests for access to systems were reviewed and authorized. Where deficiencies were identified, we tested compensating controls or performed alternate procedures sufficient to confirm that the control objectives are satisfied.

Other Matter

The financial statements of the bank for the year ended
March 31, 2024 were jointly audited by M/s Varma & Varma
and ASA & Associates LLP, who, vide their report dated April
24, 2024, expressed an unmodified opinion on those financial
statements.

Information other than the Financial Statements and
Auditors'' Report thereon

The Bank''s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Annual report, but does not include the
financial statements and our auditor''s report thereon. The
Bank''s annual report is expected to be made available to us
after the date of this Auditors'' Report.

Our opinion on the financial statements does not cover
the other information and Pillar 3 disclosure under Basel
III Capital Regulations, including Leverage Ratio, Liquidity
Coverage Ratio and Net Stable Funding Ratio under Capital
Adequacy and Liquidity Standards issued by Reserve Bank of
India'' ("RBI") and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements,
our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider
whether such other information is materially inconsistent with
the financial statements, or our knowledge obtained in the
audit or otherwise appears to be materially misstated. When

we read the Bank''s annual report, if we conclude that there
is a material misstatement of this other information, we are
required to communicate the matter to those charged with
governance and take appropriate actions.

Responsibilities of Management and Those Charged
with Governance for the Financial Statements

The Bank''s Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the
preparation of these financial statements that give a true and
fair view of the financial position, financial performance and
cash flows of the Bank in accordance with the accounting
principles generally accepted in India, including the accounting
standards specified under section 133 of the Act read with the
Companies (Accounting Standards) Rules, 2021, as amended,
in so far as they apply to the Bank and provisions of Section 29
of the Banking Regulation Act, 1949, and circulars, guidelines
and directions issued by Reserve Bank of India ("RBI") from
time to time.

This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Bank and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies;
making judgements and estimates that are reasonable and
prudent; and the design, implementation and maintenance
of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and

presentation of the financial statements that give a true and
fair view and are free from material misstatement, whether
due to fraud or error.

In preparing the financial statements, management is
responsible for assessing the Bank''s ability to continue as a
going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the management and Board of Directors
either intends to liquidate the Bank or to cease operations, or
has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the
Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial
Statements

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• I dentify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Bank has adequate internal
financial controls with reference to financial statements
in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.

• Conclude on the appropriateness of management''s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Bank''s ability to
continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor''s report to the related disclosures
in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our auditor''s report. However, future events or
conditions may cause the Bank to cease to continue as a
going concern

• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements for the
financial year ended March 31, 2025 and are therefore the
key audit matters. We describe these matters in our auditor''s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest
benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. The Balance Sheet and the Profit and Loss Account
have been drawn up in accordance with the provisions
of Section 29 of the Banking Regulation Act, 1949 and
section 133 of the Act read the Companies (Accounting
Standards) Rules, 2021, as amended.

2. As required by sub section (3) of section 30 of the

Banking Regulation Act, 1949 we report that:

a) We have sought and obtained all the information
and explanations which, to the best of our
knowledge and belief, were necessary for the
purpose of our audit and have found them to be
satisfactory;

b) The transactions of the Bank, which have come
to our notice, have been within the powers of the
Bank; and

c) The financial accounting systems of the Bank are
centralized and therefore, accounting returns for
the purpose of preparing financial statements are
not required to be submitted by the branches. Our
audit is carried out centrally as all the necessary
records and data required for the purposes of our
audit are centrally available. However, we have
visited 36 branches for the purpose of our audit, in
compliance with the extant RBI Circular.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit;

(b) In our opinion, proper books of account as required
by law have been kept by the Bank so far as it
appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss Account,
and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account;

(d) I n our opinion, the aforesaid financial statements
comply with the accounting standards specified
under section 133 of the Act read the Companies
(Accounting Standards) Rules, 2021, as amended,
to the extent they are not inconsistent with the
accounting policies prescribed by RBI;

(e) On the basis of the written representations received
from the directors as on March 31, 2025 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2025 from
being appointed as a director in terms of Section
164(2) of the Act;

(f) With respect to the adequacy of the internal financial
controls over financial reporting of the Bank with
reference to these financial statements and the
operating effectiveness of such controls, refer to our
separate Report in "Annexure-A" to this report;

(g) In our opinion, the provisions of section 197 of
the Act are not applicable to the bank by virtue
of Section 35B(2A) of the Banking Regulation Act
1949; and

(h) With respect to the other matters to be included in
the Auditor''s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
as amended, in our opinion and to the best of our
information and according to the explanations
given to us:

i. The Bank has disclosed the impact of pending
litigations as at March 31, 2025 on its financial
position in its financial statements - Refer to
Schedule 12 to the financial statements;

ii. The Bank did not have any long-term contracts
including derivative contracts for which there
were any material foreseeable losses;

iii. There were no amounts which were required
to be transferred to the Investor Education
and Protection Fund by the Bank;

iv. a) The Management of the Bank has

represented that, to the best of its
knowledge and belief, no funds (which
are material either individually or in
the aggregate) have been advanced or
loaned or invested (either from borrowed
funds or share premium or any other
sources or kind of funds) by the Bank to
or in any other persons/entities, including
foreign entities (''Intermediaries''), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, whether, directly or
indirectly lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Bank
("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries;

b) The Management of the Bank has
represented that, to the best of its
knowledge and belief, no funds (which
are material either individually or in the
aggregate) have been received by the
Bank from any persons/entities, including
foreign entities ("Funding Parties"), with
the understanding, whether recorded
in writing or otherwise, that the bank
shall, whether, directly or indirectly, lend

or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and

c) Based on the audit procedures which
we have considered reasonable and
appropriate in the circumstances and
according to the information and
explanations provided to us by the
management in this regard, nothing has
come to our notice that has caused us
to believe that the representations made
by the management under sub- clause
(a) and (b) above contain any material
misstatement.

v. The final dividend proposed in the previous
year, declared and paid by the Bank during the
year is in accordance with Section 123 of the
Act, as applicable.

vi. a) Based on our examination which
included test checks, the bank has used
accounting software for maintaining its
books of account which has a feature
of recording audit trail (edit log) facility
and the same has operated throughout
the year for all relevant transactions
recorded in the software. Further, during
the course of our audit we did not come
across any instance of audit trail feature
being tampered with.

b) Audit trail has been preserved by
the Company as per the statutory
requirements for record retention in
accordance with the requirements of
Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014.

For ASA & Associates LLP For Suri & Co.,

Chartered Accountants Chartered Accountants

ICAI FRN: 009571N/N500006 ICAI FRN: 004283S

G N Ramaswami Sanjeev Aditya M

Partner Partner

ICAI Membership No. 202363 ICAI Membership No. 229694

UDIN: 25202363BMOQGY7155 UDIN: 25229694BMIIIL8430

Place: Chennai Place: Mumbai

Date: 30-04-2025 Date: 30-04-2025

---

Mar 31, 2024

We have audited the accompanying financial statements of Equitas Small Finance Bank Limited (the "Bank"), which comprise the Balance Sheet as at March 31 2024, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, as amended (the "Act") in the manner so required for Banking Companies and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rules made thereunder, of the state of affairs of the Bank as at March 31,2024, and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs), as specified

under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Bank in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India(ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI ''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional Judgement, were of most significance in our audit of the financial statements for the financial year ended March 31, 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No.	Key Audit Matters	How our Audit Addresses our Key Audit Matters
Identification of non-performing advances and provisioning for advances
1	Advances form a material portion of the Bank''s assets and the quality of the Bank''s loan portfolio is measured in terms of the proportion of non-performing assets (NPAs) to the total loans and advances. Identification, classification and provisioning of NPAs are governed by the prudential norms on income Recognition and Asset Classification ("IRAC") issued by the Reserve Bank of India ("RBI") which include rule-based and judgemental factors. Management is also required to make estimates of stress, recoverability issues, and security erosion in respect of specific borrowers or groups of borrowers, on account of specific factors that may affect such borrowers/groups. In view of the significance of this area to the overall audit of financial statements, it has been considered as a key audit matter.	We considered the Bank''s accounting policies for NPA identification, and provisioning and have assessed the compliance with the IRAC norms prescribed by the RBI. We tested the operating effectiveness of the controls (including application and IT dependent controls) for borrower wise classification of loans in the respective asset classes viz., standard, sub-standard, doubtful and loss with reference to their days-past-due (DPD) status. We considered the special mention accounts ("SMA") reports submitted by the Bank to the RBI''s central repository of information on large credits (CRILC) and made inquiries of personnel in the Bank''s credit and risk departments regarding indicators of stress or the occurrence of specific event(s) of default or other factors affecting the loan portfolio / particular loan product category, that may affect NPA identification and/ or provisioning.

S. No.	Key Audit Matters	How our Audit Addresses our Key Audit Matters
		Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRAC norms and Bank policy. We performed analytical procedures which considered both financial and non- financial parameters, in relation to identification of NPAs and provisioning there against.
Information Technology ("IT") Systems and Controls impacting Financial Reporting
2	The IT environment of the Bank is complex and involves a large number of independent and interdependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Bank. The IT infrastructure is critical for smooth functioning of the Bank''s business operations as well as for timely and accurate financial accounting and reporting. IT general controls include user access management and change management across applications, networks, database, and operating systems. Due to the pervasive nature and complexity of the IT environment as well as its significance in relation to accurate and timely financial reporting we have identified this area as a key audit matter.	As part of our Audit, we have carried out testing of the IT general controls, application controls and IT dependent manual controls of the financially significant applications. We have gained an understanding of IT controls framework through Walkthrough of processes. We have referred to the reports of Information Systems Audit. We have also tested the design and operating effectiveness of the Bank''s IT general controls in the nature of controls over logical access, change management, and other aspects of IT controls over the key information systems that are critical to financial reporting. These included testing that requests for access to systems were reviewed and authorized. Where deficiencies were identified, we tested compensating controls or performed alternate procedures sufficient to confirm that the control objectives are satisfied.

Other Matter

The financial statements of the bank for the year ended March 31, 2023 were jointly audited by M/s. T R Chadha & Co LLP and M/s Varma & Varma, who, vide their report dated May 05, 2023, expressed an unmodified opinion on those financial statements.

Information other than the Financial Statements and Auditors'' Report thereon

The Bank''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the financial statements and our auditor''s report thereon. The Bank''s annual report is expected to be made available to us after the date of this Auditors'' Report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider

whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Bank''s annual report, if we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance and take appropriate actions.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act, 1949, and circulars, guidelines and directions issued by Reserve Bank of India ("RBI") from time to time.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management and Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Bank to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the financial year ended March 31, 2024 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated

in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended.

2. As required by sub section (3) of section 30 of the Banking Regulation Act, 1949 we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b) The transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

c) The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches. Our audit is carried out centrally as all the necessary records and data required for the purposes of our audit are centrally available. However, we have visited 32 branches for the purpose of our audit, in compliance with the extant RBI Circular.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss Account, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, to the extent they are not inconsistent with the accounting policies prescribed by RBI;

(e) On the basis of the written representations received from the directors as on March 31, 2024

taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure" to this report;

(g) In our opinion, the provisions of section 197 of the Act are not applicable to the bank by virtue of Section 35B(2A) of the Banking Regulation Act 1949; and

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer to Schedule 12 to the financial statements;

ii. The Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank;

iv. a) The Management has represented

that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons / entities, including foreign entities (''Intermediaries''), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The Management has represented that,

to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Bank from any persons / entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the bank shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on the audit procedures which we have considered reasonable and appropriate in the circumstances and according to the information and explanations provided to us by the management in this regard, nothing has come to our notice that has caused us to believe that the representations made by the management under sub- clause (a) and (b) above contain any material misstatement.

v. a) The final dividend declared and paid by

the bank during the year is in accordance with section 123 of the Companies Act, 2013.

b) As stated in Schedule 18.1 (c)(vi) to the financial statements, the Board of Directors of the Bank have proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act.

vi. Based on our examination which included test checks, the bank has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

For Varma & Varma For ASA & Associates LLP

Chartered Accountants Chartered Accountants

ICAI FRN: 004532S ICAI FRN: 009571N/N500006

P R Prasanna Varma G N Ramaswami

Partner Partner

ICAI Membership No. 25854 ICAI Membership No. 202363

UDIN: 24025854BKGPXY2503 UDIN: 24202363BKEYVF1644

Place: Chennai Place: Chennai

Date: 24/04/2024 Date: 24/04/2024

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Mar 31, 2023

To the Members of Equitas Small Finance Bank Limited Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Equitas Small Finance Bank Limited (the “Bank"), which comprise the Balance Sheet as at March 31 2023, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the “financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, as amended (the “Act") in the manner so required for Banking Companies and give a true and fair view in conformity with the accounting principles generally accepted in India including the accounting standards prescribed under section 133 of the Act, read with rules made thereunder,of the state of affairs of the Bank as at March 31, 2023,and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs),

as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Bank in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India(ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI ''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

S.No. Key Audit Matters	How our Audit Addresses our Key Audit Matters
Identification of non-performing advances and provisioning for advances
1 Advances form a material portion of the Bank''s assets and	We considered the Bank''s accounting policies for NPA
the quality of the Bank''s loan portfolio is measured in terms	identification, and provisioning and have assessed the
of the proportion of non-performing assets (NPAs) to the	compliance with the IRAC norms prescribed by the RBI read
total loans and advances. Identification, classification and	with the specific RBI guidelines relating to COVID-19 Regulatory
provisioning of NPAs are governed by the prudential norms on income Recognition and Asset Classification (“I RAC")	Package.
and the specific guidelines with relating to COVID-19	We tested the operating effectiveness of the controls (including
Regulatory Package issued by the Reserve Bank of India	application and IT dependent controls) for borrower wise
(“RBI") which include rule-based and judgmental factors.	classification of loans in the respective asset classes viz.,
Management is also required to make estimates of stress,	standard, sub-standard, doubtful and loss with reference to
recoverability issues, and security erosion in respect of	their days-past-due (DPD) status (including consideration of the
specific borrowers or groups of borrowers, on account	moratorium on loans offered under the Regulatory Package).
of specific factors that may affect such borrowers/groups	We considered the special mention accounts (“SMA") reports
(including factors relating to economic stress arising out of	submitted by the Bank to the RBI''s central repository of
the COVID-19 Pandemic).	information on large credits (CRILC) and made inquiries of
In view of the significance of this area to the overall audit	personnel in the Bank''s credit and risk departments regarding
of financial statements, it has been considered as a key	indicators of stress or the occurrence of specific event(s) of
audit matter.	default or other factors affecting the loan portfolio / particular loan product category, that may affect NPA identification and/ or provisioning. Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRAC norms and Bank policy. We performed analytical procedures which considered both financial and non- financial parameters, in relation to identification of NPAs and provisioning there against.

S.No. Key Audit Matters	How our Audit Addresses our Key Audit Matters
Information Technology (“IT") Systems and Controls impacting Financial Reporting
2 The IT environment of the Bank is complex and involves	As part of our Audit, we have carried out testing of the IT
a large number of independent and interdependent IT	general controls, application controls and IT dependent manual
systems used in the operations of the Bank for processing	controls.
and recording a large volume of transactions at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Bank.	We have gained an understanding of IT controls framework through walk through of processes. We have referred to reports of information system audit. We have also tested the design and operating effectiveness of the banks, IT access controls over the
IT infrastructure is critical for smooth functioning of	key information systems that are critical to financial reporting
the banks, business operations as well as for timely and accurate financial accounting and reporting	We tested IT general controls in the nature of controls over logical access, changes management, and other aspects of IT
IT general controls include user access management	operational controls. These included testing that requests for
and change management across applications, networks,	access to systems were reviewed and authorized.
database, and operating systems.	Where deficiencies were identified, we tested compensating
Due to the pervasive nature and complexity of the IT environment as well as its significance in relation to accurate and timely financial reporting we have identified this area as a key audit matter.	controls or performed alternate procedures.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Information other than the Financial Statements and Auditors'' Report thereon

The Bank''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the financial statements and our auditor''s report thereon. The Bank''s annual report is expected to be made available to us after the date of this Auditors'' Report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Bank''s annual report, if we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank and provisions of Section 29 of the Banking Regulation Act, 1949, and circulars, guidelines and directions issued by Reserve Bank of India (“RBI") from time to time.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities;

selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures

responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Bank to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the

adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

2. As required by sub section (3) of section 30 of the Banking Regulation Act, 1949 we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b) The transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

c) The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches. Our audit is carried out centrally as all the necessary records and data required for the purposes of our audit are centrally available. However, we have visited 27 branches covering 15.74% of the gross advances as on March 31, 2023, for the purpose of our audit, in compliance with the extant RBI Circular.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss Account, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent they are not inconsistent with the accounting policies prescribed by RBI;

(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure" to this report;

(g) In our opinion, the entity being a banking company, remuneration to its director during the year ended March 31, 2023 has been paid / provided by the Bank in accordance with the provisions of Section 35B (1) of the Banking Regulation Act 1949; and

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer to Schedule 12 to the financial statements;

ii. The Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank

iv. a) The Management has represented

that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons / entities, including foreign entities (''Intermediaries''), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Bank from any persons / entities, including foreign entities ("Funding Parties"), that the company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c) Based on the audit procedures which we have considered reasonable and appropriate in the circumstances and according to the information and explanations provided to us by the Management in this regard, nothing has come to our notice that has caused us to believe that the representations made by the Management under subclause (a) and (b) above contain any material misstatement.

v. a) The company has not paid any dividend

during the year

b) As stated in Schedule 18.1(c)(v) to the financial statements, the Board of Directors of the Bank have proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023

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Mar 31, 2022

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Equitas Small Finance Bank Limited (the "Bank"), which comprise the Balance Sheet as at March 31 2022, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013, as amended (the "Act") in the manner so required for Banking Companies and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Bank as at March 31, 2022,and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Bank in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants

of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Emphasis of Matter

We draw attention to Schedule 17.2.2 to the accompanying financial statement which describes the economic and social disruption the Bank is facing as a result of COVID-19 pandemic, and that its possible consequential implications, if any, on the Bank''s operations and financial results are dependent on future developments, which are highly uncertain.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How our audit addressed the key audit matter
Identification of non-performing advances and provisioning for advances
Advances form a material portion of the Bank''s assets and the quality of the Bank''s loan portfolio is measured in terms of the proportion of non-performing assets (NPAs) to the total loans and advances. Identification, classification and provisioning of NPAs are governed by the prudential norms on Income Recognition and Asset Classification ("IRAC") and the specific guidelines relating to COVID-19 Regulatory Package issued by the Reserve Bank of India ("RBI") which include rule-based and judgmental factors. Management is also required to make estimates of stress, recoverability issues, and security erosion in respect of specific borrowers or groups of borrowers, on account of specific factors that may affect such borrowers/groups (including factors relating to economic stress arising out of the COVID-19 pandemic). In view of the significance of this area to the overall audit of financial statements, it has been considered as a key audit matter.	We considered the Bank''s accounting policies for NPA identification, and provisioning and have assessed the compliance with the IRAC norms prescribed by the RBI read with the specific RBI guidelines relating to COVID-19 Regulatory Package. We tested the operating effectiveness of the controls (including application and IT dependent controls) for borrower wise classification of loans in the respective asset classes viz., standard, sub-standard, doubtful and loss with reference to their days-past-due (DPD) status (including consideration of the moratorium on loans offered under the Regulatory Package). We considered the special mention accounts ("SMA") reports submitted by the Bank to the RBI''s central repository of information on large credits (CRILC) and made inquiries of personnel in the Bank''s credit and risk departments regarding indicators of stress or the occurrence of specific event(s) of default or other factors affecting the loan portfolio / particular loan product category, that may affect NPA identification and/or provisioning. We have verified the borrowers request letters on sample basis for the restructuring of accounts and also verified the process adopted by the bank in restructuring the same. Selected the borrowers based on quantitative and qualitative risk factors for their assessment of appropriate classification as NPA including computation of overdue ageing to assess its correct classification and provision amount as per extant IRAC norms and Bank policy. We performed analytical procedures which considered both financial and nonfinancial parameters, in relation to identification of NPAs and provisioning there against.

Key Audit Matters	How our audit addressed the key audit matter
Information Technology (“IT") Systems and Controls impacting Financial Reporting
The IT environment of the Bank is complex and involves	As part of our Audit, we have carried out testing of the IT general controls,
a large number of independent and interdependent	application controls and IT dependent manual controls.
IT systems used in the operations of the Bank for	We tested the design and operating effectiveness of the Bank''s IT access
processing and recording a large volume of transactions	controls over the key information systems, including changes made to the
at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the	IT landscape during the audit period, that are critical to financial reporting.
financial reporting process of the Bank.	We tested IT general controls in the nature of controls over logical access, changes management, and other aspects of IT operational controls. These
There has been certain enhancement in the information	included testing that requests for access to systems were reviewed and
technology (IT) infrastructure of the Bank in the current year. As the IT systems and processes continue to	authorized.
mature in view of the evolving business and regulatory	Where deficiencies were identified, we tested compensating controls or
landscape, changes in the technology environment have been carried out by the Bank. IT general controls include user access management and change management across applications, networks, database, and operating systems. Due to the pervasive nature and complexity of the IT environment as well as its significance in relation to accurate and timely financial reporting we have identified this area a key audit matter.	performed alternate procedures.

Information other than the Financial Statements and Auditors'' Report thereon

The Bank''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the financial statements and our auditor''s report thereon. The Bank''s annual report is expected to be made available to us after the date of this Auditors'' Report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Bank''s annual report, if we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Bank''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in so far as they apply to the Bank

and provisions of Section 29 of the Banking Regulation Act, 1949, and circulars, guidelines and directions issued by Reserve Bank of India ("RBI") from time to time.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Bank''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Bank''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error,

and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) of the Act, we are also responsible for expressing our opinion on whether the Bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

The financial statements of the Bank for the year ended March 31, 2021 were audited by M/s T R Chadha & Co LLP Chartered Accountants, the statutory auditors of the bank, whose report dated April 29, 2021 had expressed an unmodified opinion on those financial statements. Accordingly, M/s Varma & Varma, Chartered Accountants, do not express any opinion on those figures reported as comparative figures in the financial statements for the year ended March 31, 2022. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

2. As required by sub section (3) of section 30 of the Banking Regulation Act, 1949 we report that:

a. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b. The transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

c. The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches. Our audit is carried out centrally as all the necessary records and data required for the purposes of our audit are centrally available. However, we have visited 22 branches covering 15.10% of the gross advances as on March 31, 2022, for the purpose of our audit, in compliance with the extant RBI Circular.

3. As required by Section 143(3) of the Act, we

report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) I n our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss Account, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent they are not inconsistent with the accounting policies prescribed by RBI;

(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank with reference to these financial statements and the operating effectiveness of such controls,

refer to our separate Report in "Annexure 1" to this report;

(g) In our opinion, the entity being a banking company, remuneration to the whole-time director during the year ended March 31, 2022 has been paid / provided by the Bank in accordance with the provisions of Section 35B (1) of the Banking Regulation Act 1949; and

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Bank has disclosed the impact of pending litigations on its financial position in its financial statements - Refer to Schedule 12 and Schedule 18.14(k) to the financial statements;

ii. The Bank did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Bank

iv. (a) The Management has represented

that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons / entities, including foreign entities (''Intermediaries''), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Bank from any persons / entities, including foreign entities ("Funding Parties"), that the company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures which we have considered reasonable and

appropriate in the circumstances and according to the information and explanations provided to us by the Management in this regard, nothing has come to our notice that has caused us to believe that the representations made by the Management under subclause (a) and (b) above contain any material misstatement.

v. As stated in Schedule 18.1(c)(v) to the financial statements, the company has not declared or paid any dividend during the year and hence, the related reporting requirements under sub-clause (f) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 is not applicable.