Auditor Report of SBI Cards and Payment Services Ltd.

Mar 31, 2025

We have audited the accompanying financial statements of
âSBI Cards and Payment Services Limitedâ (the âCompanyâ),
which comprise the Balance Sheet as at March 31, 2025, the
Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Statement
of Cash Flows for the year then ended, and notes to the financial
statements including a summary of material accounting policies
and other explanatory information (the âfinancial statementsâ).

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 Companies
Act, 2013, as amended (the âActâ) in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards (Ind AS) prescribed under section
133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, (âInd ASâ) and accounting
principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2025, its profit and other
comprehensive income), its changes in equity 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 (âSAsâ) specified under section
143(10) of the Act. Our responsibilities under those standards
are further described in the âAuditorâs responsibilities for the
audit of the financial statementsâ section of our report. We
are independent of the Company 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 thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAIâs Code of Ethics. We
believe that the audit evidence obtained by us 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 of the current period. 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.

Sr.

No.

Key Audit Matter

How the matter was addressed in the audit

Assessment of impairment loss allowance based on
expected credit loss (ECL) on Loans (Refer note - 37
of the financial statements)

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss on the financial assets.

For recognition of impairment loss on Loans to
customers, where no significant increase in credit risk
(SICR) has been observed, such assets are classified in
âStage 1" and a 12 months ECL is recognised. Loans
that are categorised into have a significant increase in
credit risk are considered to âStage 2" and those which
are in default or there exists objective evidence of
impairment are considered to be in âStage 3". Lifetime
ECL is recognised for stage 2 and stage 3 Loans. At
every reporting date, the historical observed default
rates are updated and changes in the forward-looking
estimates are analysed.

Our audit procedures relating to the expected credit losses
(ECL) include the following, among others:

We obtained a comprehensive understanding of ECL model (as
revised during the year to comply with RBI requirements & to
match with the changing economics dynamics) with the help
of presentations & active interaction with risk management
team of the Company.

We examined the policies approved by the Board of Directors
of the Company. We also verified the methodology adopted for
computation of ECL (âECL Modelâ) that meets the requirements
of policies approved by the Board of Directors, procedures
and controls for assessing and measuring the credit risk
and that ECL Model itself and output of the ECL Model are
consistent with the documented ECL Model. We also verified
that the ECL Model and its output has the approval of audit
committee of the Board of Directors.

Sr.

No.

Key Audit Matter

How the matter was addressed in the audit

Quantitative factors like days past due, behaviour of
the customer, historical losses incurred on defaults
and macroeconomic data points identified by the
Managementâs expert and qualitative factors like nature
of the underlying loan, deterioration in credit quality
correlation of macro- economic variables to determine
expected losses, revision in the management overlay
and related Reserve Bank of India (RBI) guidelines, to
the extent applicable, etc. have been taken into account
in the ECL computation.

Considering the inherent judgmental nature, the
complexity of model involved, degree of estimate
involved in the model and computation of impairment
loss allowance along with the significance of the
amount and its impact on the financial statements of
the Company, this area has been considered as key
audit matter.

We examined compliance of the Companyâs accounting

policies in relation to impairment allowance with Ind AS 109.

We also evaluated:

â¢ the assumptions used in the calculation of ECL and its
various aspects such as determination of Probability of
Default, Loss Given Default, Exposure at Default, Staging
of Loans, etc.;

â¢ the completeness and accuracy of source data used by
the Management for ECL computation; and,

â¢ ECL computations for their reasonableness. Portfolio
categorisation into appropriate stages (Stage 1, Stage 2
and Stage 3) for purposes of measurement of ECL was
analysed on the basis of their past-due status.

â¢ The adequacy of presentation and disclosure in the
financial statements with respect to expected credit
losses including the specific disclosure made with
regards to revision in ECL model.

Performing an audit in an Automated environment
that is driven by IT systems & applications

The business operates in an automated environment
and has a complex IT structure as significant number of
transactions are processed through its inter-dependent
IT systems.

Appropriate IT general controls and IT application
controls are required to ensure that such IT systems
process operations in an accurate, complete,
effective, efficient, and consistent way for reliable
financial reporting.

Due to pervasive use of IT systems, high level of
automation and its impact on the financial reporting
of the business we have considered âIT Systems and
Controlsâ to be a key audit matter.

Our audit procedures with respect to this matter included
the following:

Having obtained a comprehensive understanding of the IT
systems and the automated environment of the Company,
identification of related checks and balances, information
systems audit report submitted by an outside expert, report
submitted by internal audit cell on internal financial controls
as designed & operative in automated environment, we
redesigned our audit procedures so as to align with the
automated process.

With respect to IT system, our focus includes User access and
security controls, network operations, automated calculations,
and database management. In detail:

â¢ Ensured that systems are developed, configured and
implemented to meet financial reporting objectives.

â¢ Assessed User Access Management i.e., process of
identifying, tracking, controlling and managing a
specified usersâ access to an IT system.

â¢ Covered logics & controls over reports used in business
which are system driven.

Where control deficiencies have been identified, we have
tested compensating controls or performed alternative audit
procedures, wherever necessary.

INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITORâS REPORT THEREON

The Companyâs 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 auditorâs report thereon, The Annual
Report is expected to be made available to us after the date of
this auditorsâ 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 the other information is materially
inconsistent with the financial statements or our knowledge
obtained during the course of our audit, or otherwise appears
to be materially misstated.

When we read the Annual Report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance.

RESPONSIBILITIES OF THE MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE FOR THE
FINANCIAL STATEMENTS

The Companyâs 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
including other comprehensive income, changes in equity and
cash flows of the company in accordance with the accounting
principles generally accepted in India, including the Indian
Accounting Standards (âInd AS") notified under section 133 of
the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended from time to time. This responsibility
also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
the assets of the company 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 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, the management and
Board of Directors is responsible for assessing the companyâs
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 board of directors either intends
to liquidate the company or to cease operations, or has no
realistic alternative but to do so.

The Companyâs Board of Directors is also responsible for
overseeing the companyâs financial reporting process.

AUDITORâS 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 auditorâs 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:

â¢ 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(s).

â¢ Obtain an understanding of internal financial 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 company has adequate
internal financial controls with reference to financial
statements in place and the operating effectiveness of
such controls.

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

significant doubt on the companyâs ability to continue
as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our auditorâs 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 auditorâs
report. However, future events or conditions may cause
the company to cease to continue as a going concern.

â¢ 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.

Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results
of our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.

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 of the
current period and are therefore the key audit matters. We
describe these matters in our auditorâs 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 include comparative financial figures
of the Company for the corresponding year ended 31^st March,

2024 which has been audited by predecessor firms of joint
statutory auditors vide their audit report dated April 26 April,
2024, in which the predecessor firms of joint statutory auditors
have expressed an unmodified opinion.

We have relied upon the said report for the purpose of our
report on these financial statements. Our opinion is not
modified in respect of the above matter.

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS

1. As required by the âCompanies (Auditorâs Report) Order,
2020â (âthe Order"), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the
Act, we give in Annexure - âAâ, a statement on the matters
specified in paragraph 3 and 4 of the Order.

2. We also enclose our report in terms of section 143(5)
of the Act, on the basis of such checks of the books and
records of the Company as we considered appropriate
and according to the information and explanations given
to us by the management, in Annexure - âBâ, on the
directions and sub-directions issued by Comptroller and
Auditor General of India.

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 company so far as it
appears from our examination of those books;

c. the balance sheet, the statement of profit and
loss (including other comprehensive income), the
statement of changes in equity and the statement
of cash flows dealt with by this the report are in
agreement with the books of account;

d. in our opinion, the aforesaid financial statements
comply with the Indian Accounting Standards (âInd
AS") notified under section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules,
2015, as amended from time to time;

e. on the basis of the written representations received
from the directors as at March 31, 2025 and taken
on record by the board of directors, none of the
directors are disqualified as at 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 with reference to financial statements
of the company and the operating effectiveness
of such controls, refer to our separate report in
Annexure - âCâ;

g. with respect to the other matters to be included
in the Auditorâs Report in accordance with the
requirements of section 197(16) of the Act, as
amended, in our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid/ provided by
the Company to its directors during the year is in
accordance with the provisions of section 197 of
the Act;

h. with respect to the other matters to be included in
the Auditorâs 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 Company has disclosed the impact of
pending litigations on its financial position
in its financial statements in note 44 to its
financial statements;

ii. The Company has not entered into 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 Company;

iv. (a) The Management has represented

that, to the best of its knowledge and
belief as disclosed in note no. 8 to the
financials statements, 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 Company to or
in any other person or entity, including
foreign entity (âIntermediaries"), 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 Company (âUltimate

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 as
disclosed in note no. 8 to the financials
statements, no funds (which are material
either individually or in aggregate) have
been received by the Company from
any person or entity, including foreign
entity (âFunding Parties"),with the
understanding, whether recorded in
writing or otherwise, that the Company
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 (âUltimate
Beneficiaries") or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries; and

(c) Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) as
provided under (a) and (b) above, contain
any material misstatement.

v. During the year the Company has declared and
paid interim dividend, which is in accordance
with section 123 of the Act.

vi. Based on our examination, which included
test checks, and in accordance with the
requirements of Implementation Guide on
Reporting on Audited Trail under Rule 11(g)
of the Companies (Audit and Auditors) Rules
2014, except for our comments below, the
Company has used accounting softwares
for maintaining its books of account for the
financial year ended March 31, 2025 which
have a feature of recording audit trail (edit log)
facility and the same has operated throughout
the year for all relevant transactions recorded
in the respective softwares. Further, during
the course of our audit we did not come
across any instance of the audit trail feature
being tampered with. The audit Trail has been
preserved by the Company as per statutory
requirements for record retention.

i n respect of accounting software operated by a third party service provider and used for payroll and allied functions of the
Company, the feature of recording audit trail (edit log) facility was enabled as confirmed by the consultants of the service provider.
However, we are unable to independently verify and confirm the same. Also we are not in a position to confirm whether the audit
trail feature in the accounting software operated by third party service provider has been tampered with and preserved as per
statutory requirements for record retention.

For V. K. Dhingra & Co. For S. P. Chopra & Co.,

Chartered Accountants Chartered Accountants

Firm Regd. No. 000250N Firm Regd. No. 000346N

Vipul Girotra Ankur Goyal

Partner Partner

Membership No. 084312 Membership No. 099143

UDIN:25084312BMOVEL3145 UDIN:25099143BMKOCT2022

Place: Gurugram Place: Gurugram

Date: April 24, 2025 Date: April 24, 2025

Mar 31, 2024

We have audited the accompanying financial statements of SBI Cards and Payment Services Limited (the âCompany"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of material accounting policies information and other explanatory information (hereinafter referred to as the âfinancial 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 Companies Act, 2013 (the âAct") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its profit and total comprehensive income, changes in equity 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 (âSAs") specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India (âICAI") 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 thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidences obtained by us 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 of the current period. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr.

No.

Key Audit Matters

Auditorâs Response

Assessment of impairment loss allowance based on expected credit loss (ECL) on Loans (Refer Note 38 of the financial statements)

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets.

For recognition of impairment loss on Loans to customers, where no significant increase in credit risk [SICR] has been observed, such assets are classified in âStage 1" and a 12 months ECL is recognised. Loans that are categorised into have a significant increase in credit risk are considered to âStage 2" and those which are in default or there exists objective evidence of impairment are considered to be in âStage 3". Lifetime ECL is recognised for stage 2 and stage 3 Loans. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Our audit procedures relating to the allowance for credit losses include the following, among others:

Compliance of the Companyâs accounting policies in relation to impairment allowance with Ind AS 109 was assessed.

We understood and evaluated the design and tested the operating effectiveness of the key controls put in place by the management over:

(a) the assumptions used in the calculation of ECL and its various aspects such as determination of Probability of Default, Loss Given Default, Exposure at Default, Staging of Loans, etc.;

(b) the completeness and accuracy of source data used by the Management for ECL computation; and,

Sr. No.	Key Audit Matters	Auditorâs Response
	Quantitative factors like days past due, behaviour of the	Portfolio categorisation into appropriate stages (Stage 1,
	customer, historical losses incurred on defaults and macro-	Stage 2 and Stage 3) for purposes of measurement of ECL was
	economic data points identified by the Managementâs expert and qualitative factors like nature of the underlying loan,	analysed on the basis of their past-due status.
	deterioration in credit quality correlation of macro- economic	We test-checked the completeness and accuracy of source
	variables to determine expected losses, revision in the	data used.
	management overlay and related Reserve Bank of India (RBI) guidelines, to the extent applicable, etc. have been taken into	We evaluated the reasonableness of judgement involved
	account in the ECL computation.	in managementâs overlays that form part of the impairment provision, and the related approvals.
	Considering the inherent judgmental nature, the complexity of model involved, degree of estimate involved in the model	We have also evaluated the adequacy of presentation and
	and computation of impairment loss allowance along with	disclosure in the financial statements with respect to expected
	the significance of the amount and its impact on the financial	credit losses including the specific disclosure made with
	statements of the Company, this area has been considered as key audit matter.	regards to revision in ECL model.
2	Performing an audit in an Automated environment that is	Our audit procedures with respect to this matter included
	driven by IT systems & applications.	the following:
	The business operates in an automated environment and has	Having obtained a comprehensive understanding of the IT
	a complex IT structure as significant number of transactions	systems and the automated environment of the Company, we
	are processed through its inter-dependent IT systems.	have considered our scope for audit based on the purpose and financial relevance to the audit.
	Appropriate IT general controls and IT application controls are required to ensure that such IT systems process operations	With respect to IT system, our focus includes User access and
	in an accurate, complete, effective, efficient, and consistent	security, network operations, automated calculations, and
	way for reliable financial reporting.	database management. In detail:
	Due to pervasive use of IT systems, high level of automation and its impact on the financial reporting of the business we have considered âIT Systems and Controlsâ to be a key audit matter.	â¢ Ensured that systems are developed, configured and implemented to meet financial reporting objectives. â¢ Assessed User Access Management i.e., process of identifying, tracking, controlling and managing a specified users'' access to an IT system.

		â¢ Covered logics & controls over reports used in business which are system driven.
		Where control deficiencies have been identified, we have tested compensating controls or performed alternative audit procedures, wherever necessary.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORâS REPORT THEREON

The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report and Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the financial statements and our auditorâs report thereon.

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 the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

MANAGEMENTâS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, including total comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company 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 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 Companyâs 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Companyâs financial reporting process.

AUDITORâS 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 misstatements, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatement 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 exercised professional judgment and maintain professional scepticism throughout the audit. We also:

â¢ 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(s).

â¢ Obtain an understanding of internal financial controls 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 Company has adequate internal financial controls with reference to financial statements system in place and the operating effectiveness of such controls.

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

â¢ Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ 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.

quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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. As required by the Companies (Auditorâs Report) Order, 2020 (the âOrder"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1", a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. On the basis of such checks of the books and records of the Company, as we consider appropriate and according to the information and explanations given to us, we are enclosing our report in terms of Section 143(5) of the Act, on the directions and sub directions issued by Comptroller and Auditor General of India in âAnnexure 2".

3. As required by section 143(3) of the Act based on our audit, 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 Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity 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 Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(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 director in terms section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 3". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls with reference to financial statements;

(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:

I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act;

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements - Refer Note No. 45 to the Financial Statements;

(ii) There were no amounts which were required

to be transferred to the Investor Education and

Protection Fund by the Company;

(iii) (a) 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 Company to or in any other person or entity, including foreign entity (âIntermediaries"), 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 Company (âUltimate 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 aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Parties"),with the understanding, whether recorded in writing or otherwise, that the Company 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 (âUltimate Beneficiaries") or provide

any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.

(iv) The Company has declared interim dividend during the year which is in accordance with Section 123 of the Act.

(v) Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31,2024 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 the audit trail feature being tampered with.

(vi) As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, audit trail is applicable from April 01,2023, hence, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention would be relevant from the subsequent year i.e., Financial Year 2024-25.

For Ambani & Associates LLP For Mahesh C Solanki & Co

Chartered Accountants Chartered Accountants

FRN:016923N FRN:006228C

CA. Hitesh Ambani CA. Rajat Jain

Partner Partner

Membership No. 506267 Membership No. 413515

UDIN: 24506267BJZYAR1208 UDIN: 24413515BKCNNU3953

Place: Gurugram Place: Gurugram

Date: April 26, 2024 Date: April 26, 2024

Mar 31, 2023

To the Members of

SBI Cards and Payment Services Limited

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTSOPINION

We have audited the accompanying financial statements of SBI Cards and Payment Services Limited (the âCompany"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, 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 âfinancial 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 Companies Act, 2013 (the âAct") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit and total comprehensive income, changes in equity 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 (âSAs") specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered accountants of India (âICAI") 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 thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

KEY AUDIT MATTERS

Sr. Key Audit Matters No.	Auditor''s Response
1 Assessment of impairment loss allowance based on expected	Our audit procedures relating to the allowance for credit
credit loss (ECL) on Loans (Refer Note 38 of the financial	losses include the following, among others:
statements)	Compliance of the Companyâs accounting policies in relation
In accordance with Ind AS 109, the company applies expected	to impairment allowance with Ind AS 109 was assessed.
credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets.	We understood and evaluated the design and tested the operating effectiveness of the key controls put in place by
For recognition of impairment loss on Loans to customers,	the management over:
where no significant increase in credit risk [SICR] has been observed, such assets are classified in âStage 1" and a 12 months ECL is recognized. Loans that are categorised into have a significant increase in credit risk are considered to âStage 2" and those which are in default or there exists	(a) the assumptions used in the calculation of ECL and its various aspects such as determination of Probability of Default, Loss Given Default, Exposure at Default, Staging of Loans, etc.;
objective evidence of impairment are considered to be	(b) the completeness and accuracy of source data used by
in âStage 3". Lifetime ECL is recognized for stage 2 and	the Management for ECL computation; and,
stage 3 Loans.	(c) ECL computations for their reasonableness.
Further, in the current year company has revised the estimation model for Expected Credit Loss [ECL] on account of change in estimation, instigating forward looking macroeconomic factors in probability of default of the credit card portfolio to ensure that adverse future economic conditions are covered in the ECL.

Sr. Key Audit Matters No.	Auditor''s Response
Quantitative factors like days past due, behaviour of the	Portfolio categorization into appropriate stages (Stage 1,
customer, historical losses incurred on defaults and macro-	Stage 2 and Stage 3) for purposes of measurement of ECL
economic data points identified by the Managementâs	was analysed on the basis of their past-due status.
expert and qualitative factors like nature of the underlying loan, correlation of macro- economic variables to determine	We test-checked the completeness and accuracy of source data used.
expected losses, revision in the management overlay and
related Reserve Bank of India (RBI) guidelines, to the extent	We have also evaluated the adequacy of presentation
applicable, etc. have been taken into account in the ECL	and disclosure in the financial statements with respect to
computation. Considering the change in ECL policy, degree of estimate involved in the model and computation of impairment loss allowance along with the significance of the amount and its impact on the financial statements of the company, this area has been considered as key audit matter.	expected credit losses including the specific disclosure made with regards to revision in ECL model.
2 Performing an audit in an Automated environment that is	Our audit procedures with respect to this matter included
driven by IT systems & applications.	the following:
The business operates in an automated environment and has	Having obtained a comprehensive understanding of the IT
a complex IT structure as significant number of transactions	systems and the automated environment of the Company,
are processed through its inter-dependent IT systems.	we have considered our scope for audit based on the
Appropriate IT general controls and IT application controls	purpose and financial relevance to the audit.
are required to ensure that such IT systems process	With respect to IT system, our focus includes User access
operations in an accurate, complete, effective, efficient, and	and security, network operations, automated calculations,
consistent way for reliable financial reporting.	and database management. In detail:
Due to pervasive use of IT systems, high level of automation	â¢ Ensured that systems are developed, configured and
and its impact on the financial reporting of the business we	implemented to meet financial reporting objectives.
have considered âIT Systems and Controlsâ to be a key audit matter.	â¢ Assessed User Access Management i.e., process of
	identifying, tracking, controlling and managing a specified users'' access to an IT system. â¢ Covered logics & controls over reports used in business which are system driven. Where control deficiencies have been identified, we have tested compensating controls or performed alternative audit procedures, wherever necessary.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORâS REPORT THEREON

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 the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

MANAGEMENTâS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Board of Directors are responsible for overseeing the Companyâs financial reporting process.

AUDITORâS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

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

â¢ 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.

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

â¢ 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 of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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

3. As required by section 143(3) of the Act based on our audit, 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 Company so far as it appears from our examination of those books;

(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 director in terms section 164(2) of the Act;

(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements - Refer Note No. 45 to the Financial Statements;

(ii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

(iii) (a) Management has represented that, to the

the Company 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 (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.

(v) The Company has declared interim dividend during the year which is in accordance with Section 123 of the Act.

(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.

Mar 31, 2022

SBI Cards and Payment Services Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of SBI Cards and Payment Services Limited (âthe Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, 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 âfinancial 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 Companies Act, 2013 (âthe Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (âSAs") specified under Section 143(10) of

the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered accountants of India (âICAI") together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

We draw attention to note 3.1 to the financial statements. The extent to which the Covid-19 pandemic will impact the Companyâs financial performance is dependent on future developments, which are highly uncertain.

Our Opinion is not modified is respect of this matter.

Key Audit Matters

Sr.

No.

Key Audit Matters

Auditorâs Response

Accuracy of recognition, measurement, presentation and disclosures of Impairment of financial assets (Expected Credit Loss) in view of adoption of Ind AS 109 âFinancial Instruments"

In accordance with IND AS 109, the Company applies expected credit losses (ECL) model for measurement and recognition of impairment loss on the financial assets measured at amortised cost. For recognition of impairment loss on Loans to customers, where no significant increase in credit risk has been observed, such assets are classified in âStage 1", loans that are considered to have significant increase in credit risk are considered to be in âStage 2" and those which are in default or for which there is an objective evidence of impairment are considered to be in âStage 3". Credit risk is measured using Probability of Default (PD), Exposure of Default (EAD), Loss Given Default (LGD).

Principal Audit Procedures

Our audit procedures relating to the allowance for

credit losses included the following, among others:

â¢ Compliance of the Companyâs accounting policies in relation to impairment allowance with Ind AS 109 was assessed.

â¢ We evaluated the appropriateness of the ECL model chosen, assessed the reasonableness of the assumptions and estimates and completeness of information used in the estimation of Probability of Default and Loss Given Default.

â¢ Portfolio categorization into appropriate stages (Stage 1, Stage 2 and Stage 3) for purposes of measurement of ECL was analysed on the basis of their past-due status.

Sr. Key Audit Matters No.	Auditorâs Response
Further, for corporate portfolio, Companyâs credit risk function also segregates loans with specific risk characteristics based on trigger events identified using sufficient and credible information available from internal sources supplemented by external data. Impairment allowance for these exposures are reviewed and accounted on a case by case basis. The current ECL model does not cater to future economic deterioration expected due to COVID-19 fall out and it is based on past historical data. However, additional management overlay has been provided on stress segments portfolio of loan and advances, duly approved by the Board of Directors.	â¢ Review of additional management overlay, particularly in response to COVID- 19 pandemic situation, by critically evaluating the stress segments that have been identified by management and approved by Board of Directors through overlays. We also tested managementâs workings supporting the overlay quantum. â¢ Assessed disclosures in the financial statements in respect of expected credit losses including the specific disclosures made with regards to the impact of COVID-19 on ECL estimation.
Considering the degree of estimation involved in the model and computation of impairment loss allowance along with the significance of the amount and its impact on the financial statements of the company, this area has been considered as a Key Audit Matter.
Refer Note 38.1.2 to the Financial Statements

Information Other than the Financial Statements and Auditorâs Report Thereon

The Companyâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report and Business Responsibility Report, Corporate Governance and Shareholderâs Information, but does not include the financial statements and our auditorâs report thereon.

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 the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company 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 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 Companyâs 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 Company or to cease operations, or has no realistic alternative but to do so.

The Board of directors are responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Financial Statements

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

â¢ 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.

â¢ Obtain an understanding of internal financial controls 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 Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

â¢ 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.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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.

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. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure â1", a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent as applicable.

2. The Comptroller and Auditor General of India has issued the directions and sub directions indicating the areas to be examined in terms of sub section (5) of section 143 of the Companies Act, 2013, the compliance of which is set out in Annexure â2".

3. As required by section 143(3) of the Act based on our audit, 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 Company so far as it appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity 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 Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules,2015, as amended;

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

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure â3". Our report expresses an unmodified opinion

on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting; and

g. With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements - Refer Note 45 to the Financial Statements;

ii. The Company did not have any long-term contracts including derivative contracts;

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

iv. (a) Management has represented that, to the

(b) The Management has represented, that, to the best of its knowledge and belief, no funds(which are material either individually or in aggregate) have been received by the Company from any person

or entity, including foreign entity (âFunding Parties"),with the understanding, whether recorded in writing or otherwise, that the Company 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 (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.

v. The Company has declared interim dividend during the year which is in accordance with Section 123 of the Act.

For S. Ramanand Aiyar & Co.

Chartered Accountants

Firmâs Registration Number: 000990N

R. Balasubramanian

Partner

Membership No. 080432 UDIN: 22080432AICETM2616

Place: Gurugram Date: April 29, 2022

Mar 31, 2021

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client to the extent of securities issued;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable during the period under review.

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; Not Applicable during the period under review.

(vi) The Management has confirmed and certified the following

laws are being specifically applicable to the Company:

a) Reserve Bank of India Act, 1934 and Rules made thereunder;

b) Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015.

We have also examined compliance with the applicable clauses/

Regulations of the following:

(i) Secretarial Standards issued by The Institute of Company

Secretaries of India and notified by Ministry of Corporate

Affairs.

(ii) SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015.

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate governance practices by SBI Cards and Payment Services Limited (Formerly known as SBI Cards and Payment Services Private Limited) (hereinafter called the "Companyâ). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company''s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2021 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the Financial Year ended on March 31, 2021(âPeriod under reviewâ) according to the provisions of:

(i) The Companies Act, 2013 (the âActâ) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (âSCRA'''') and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder to the extent of Regulation 76 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (ââSEBI Actâ):

obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. The Company had made an application in form MR-2 with the Ministry of Corporate Affairs (âMinistryâ), to obtain the approval of Central Government for the appointment of Mr. Ashwini Kumar Tewari, as Managing Director & CEO of the Company with effect from August 01, 2020 in terms of section 196,197 read with Schedule V (specifically for the condition provided in clause (e), Part I of Schedule V) of the Act. Mr. Ashwini Kumar Tewari has resigned from the position of Managing Director & CEO w.e.f January 27, 2021. Thereafter for filing the vacancy caused in the office of Managing Director of the company, Mr. Rama Mohan Rao Amara, was appointed by the board, as Managing Director & CEO of the Company with effect from January 30, 2021 and made an application in form MR-2 with the Ministry, to obtain the approval of Central Government in terms of section 196,197 read with Schedule V (specifically for the condition provided in clause (e), Part I of Schedule V) of the Act. Application for Mr. Tewari was pending for approval before the Ministry as on the closure of financial year ended March 31,2021. However, application for Mr. Rao was filed on April 22, 2021 and the same is also pending for approval before the Ministry as on the date of this report.

Adequate notice is given to all directors to schedule the Board/ Committee Meetings, agenda and detailed notes on agenda were sent in advance (and at a shorter notice for which necessary approvals obtained, if any) and a system exists for seeking and

All decisions at Board Meetings and Committee Meetings were carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, following specific events / actions took place having a major bearing on the Company''s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc:

(i) During the period under review, the Company has made allotment of 19,000 Non-Convertible Debentures of H 1,000,000/- each to the selected group of investors on Private Placement basis aggregating to H 1900 crores-.

(ii) During the period under review, the Company has redeemed its Non-Convertible Debentures aggregating to H 1400 crores.

For Chandrasekaran Associates Company Secretaries

Dr. S Chandrasekaran

Senior Partner Membership No. F1644 Date: June 11,2021 Certificate of Practice No. 715

Place: Delhi UDIN: F001644C000448277

Notes:

(i) This report is to be read with our letter of even date which is annexed as Annexure-A to this report and forms an integral part of this report.

(ii) Due to restricted movement amid COVID-19 pandemic, we conducted the secretarial audit by examining the Secretarial Records including Minutes, Documents, Registers and other records etc., and some of them received by way of electronic mode from the Company and could not be verified from the original records. The management has confirmed that the records submitted to us are the true and correct. This Report is limited to the Statutory Compliances on laws / regulations / guidelines listed in our report of which, the due date has been ended/expired on or before March 31,2021 pertaining to FY21.

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