Auditor Report of Five-Star Business Finance Ltd.

Mar 31, 2025

We have audited the accompanying financial statements of Five-Star
Business Finance Limited (the "Company"), which comprise the Balance
Sheet as at March 31, 2025, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Cash Flows
and the Statement of Changes in Equity for the year ended on that date,
and notes to the financial statements, including a summary of material
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 Companies Act, 2013 (the "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,
("Ind AS") and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31, 2025, and its profit,
total comprehensive income, its cash flows and the changes in equity 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 ("SA"s) specified under section 143(10) of the
Act. Our responsibilities under those Standards are further described
in the Auditor''s Responsibility 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 ("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 ICAI''s
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. we have
determined the matter described below to be the key audit matter to be
communicated in our report.

Key Audit Matter	Auditor’s Response
Provision for Expected Credit Losses (“ECL") on Loans:	Principle Audit Procedures:
As at March 31, 2025, the Company has reported gross loan assets of Rs.	1. We examined Board Policies approving methodologies for computation
1,188,012 lakhs measured at amortised cost against which an impairment	of ECL that address policies, procedures and controls for assessing and
loss of Rs. 19,333 lakhs has been recorded. The Company recognized	measuring credit risk on lending exposures measured at amortised
impairment provision for loan assets based on the Expected Credit Loss	cost.
("ECL") approach laid down under ''Ind AS 109 - Financial Instruments''.	2. We evaluated the design and operating effectiveness of controls
As part of our risk assessment, we determined that the estimation of ECL	relevant to ECL, including the judgements and estimates.
on financial instruments involves significant management judgement,	3. These controls, among others, included controls over the allocation
estimates and assumptions which could have a material impact on the	of assets into stages including management''s monitoring of stage
financial statements.	effectiveness, credit monitoring and macro-economic scenarios. 4. We tested the completeness of loans included in the Expected Credit
The elements of estimating ECL which involves increased level of	Loss calculations as of March 31, 2025 by reconciling it with the
audit focus are the following: Segmentation of loan portfolio based on	balances as per loan register as on that date.
homogeneity, qualitative and quantitative factors used in staging of the	5. We tested assets in stage 1, 2 and 3 on sample basis to verify that they
loan assets, techniques used to determine probability of default (PD),	were allocated to the appropriate stage and tested the appropriateness
Exposure at Default (EAD) and loss given default (LGD) based on the	of the segmentation.
historical trends, judgements used in projecting macro-economic factors	6. For samples of exposure, we tested the appropriateness of determining
and probability weights applied to reflect future economic conditions,	EAD, PD and LGD.
consideration of management overlays as part of its ECL computation,	7. For forward looking assumptions used in ECL calculations, we held
to reflect an increased risk of deterioration in relevant macro-economic	discussions with management, assessed the assumptions used and the
factors. Such overlays are based on various uncertain variables which	probability weights assigned to the possible outcomes.
could result in actual credit loss being different than that being estimated.	8. We assessed the appropriateness of the scenarios used and calculation of the management overlay and validated the assumptions using the
(Refer note 6 to the financial statements)	data provided by the Company. 9. The mathematical accuracy of the ECL computation by using the same input data as used by the Company.

Information Other than the Financial Statements and Auditor''s
Report Thereon

• The Company''s Board of Directors is responsible for the other
information. The other information comprises the information included
in the Director''s report including Annexures, Management Discussion &
Analysis, Business Responsibility & Sustainability Report, but does not
include the financial statements and our auditor''s 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.

• When we read the Director''s report including Annexures, Management
Discussion & Analysis, Business Responsibility & Sustainability Report,
if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance
as required under SA 720 ''The Auditor''s responsibilities Relating to
Other Information.

Responsibilities of Management and Board of Directors for the
Financial Statements

The Company''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 including other comprehensive income, cash flows
and changes in equity of the Company in accordance with the accounting
principles generally accepted in India, including Ind AS specified under
section 133 of the Act. 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 and Board of Directors
are responsible for assessing the Company''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 Board of Directors
either intend to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.

The Company''s Board of Directors is also responsible for overseeing the
Company''s financial reporting process.

Auditor''s Responsibility 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 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 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 the 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 Company''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 Company 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.

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 financial
controls 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 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 Matter

The financial statements of the Company for the year ended March 31,
2024, were audited by another auditor who expressed an unmodified
opinion on those statements on April 30, 2024.

Our opinion on the financial statements is not modified in respect of this
matter.

Report on Other Legal and Regulatory Requirements

1. 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, except for our comments as stated in (i)(vi) below.

c) The Balance Sheet, the Statement of Profit and Loss including
Other Comprehensive Income, the Statement of Cash Flows and
Statement of Changes in Equity dealt with by this report are in
agreement with the relevant books of account.

d) In our opinion, the aforesaid financial statements comply with the
Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the
directors as on March 31, 2025 and 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) The modification/s relating to the maintenance of accounts and
other matters connected therewith, is as stated in paragraph (b)
above.

g) 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 A". Our report expresses an unmodified opinion on the
adequacy and operating effectiveness of the Company''s internal
financial controls with reference to financial statements.

h) With respect to the other matters to be included
in the Auditor''s 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.

i) 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 Company has disclosed the impact of pending litigations on
its financial position as at the year end in its financial statements
- Refer Note 36 to the financial statements.

ii. The Company has made provision at the year end, as required
under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including
derivative contracts - Refer Note 6 and 15 to the financial
statements.

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, other than as disclosed in the Note 50(v)

(i) to the financial statements no funds have been advanced
or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company
to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries"), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the
Company ("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, other than as disclosed in the Note 50(v)

(ii) to the financial statements, no funds have been received by
the Company from any person(s) or entity(ies), including foreign
entities ("Funding Parties"), with the understanding, whether
recorded in writing or otherwise, 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 performed 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. As stated in Note 22 to the financial statements, the Board of
Directors of the Company has proposed final dividend for the
year which is subject to the approval of the members at the
ensuing Annual General Meeting. Such dividend proposed is in
accordance with section 123 of the Act, as applicable.

vi. Based on our examination, which included test checks, the
Company has used an accounting software for maintaining its
books of account for the year ended March 31, 2025, which
has a feature of recording audit trail (edit log) facility and the
audit trail has operated throughout the year for all relevant
transactions recorded in the software, except that in respect of
one accounting software, the audit trail feature was not enabled
at the database level to log any direct data changes during the
period from April 1, 2024 to May 23, 2024. Consequent to this,

we are unable to comment whether there were any instances ol
the audit trail feature being tampered with during this period.

2. As required by the Companies (Auditor''s Report) Order, 2020 ("the
Order") issued by the Central Government in terms of Section 143(11)
of the Act, we give in "Annexure B" a statement on the matters specified
in paragraphs 3 and 4 of the Order.

Further, during the course of our audit, we did not come
across any instance of the audit trail feature being tampered
with, in respect of the accounting software for the period
for which the audit trail feature was enabled and operating.

Additionally, the audit trail that was enabled and operated for
the year ended March 31, 2024, has been preserved by the
Company as per the statutory requirements for record retention,
as stated in Note 51 to the financial statements.

For Deloitte Haskins & Sells

Chartered Accountants
Firm''s Registration No: 008072S

G.K. Subramaniam

Partner

Place: Mumbai Membership No: 109839

Date: April 29, 2025 UDIN: 25109839BMOFUP4228

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Mar 31, 2024

To the Members of Five-Star Business Finance Limited Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Five-Star Business Finance Limited (the “Company”), which comprise the Balance Sheet as at March 31 2024, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of material 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 Companies Act, 2013, as amended (the “Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

Weconducted 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 Company 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 thereunder, 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.

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, 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. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements

Key audit matters	How our audit addressed the key audit matter
(a) Impairment of Loans based on expected credit loss model (Refer Note 6 of the financial statements)
Loans to customers represent a significant portion of the total	Our audit procedures included the following:
assets of the Company. The Company has loans aggregating INR	• Read and assessed the Company''s accounting policies for
984,365.20 lakhs as at March 31, 2024.	impairment of financial assets considering the requirements of Ind AS 109 and the governance framework approved by
As per the expected credit loss model of the Company developed	the Board of Directors pursuant to Reserve Bank of India
in accordance with the principles set out in Ind-AS 109 on	guidelines.
Financial Instruments, the Company is required to estimate the	• Evaluated the management estimates by understanding
probability of loss / expected loss based on past experience and	the process of ECL estimation and related assumptions and
future considerations, grouping of the loan portfolios under	tested the design and operating effectiveness of controls
homogeneous pools in order to determine the probability of	around data extraction, validation and computation.
defaults on a collective basis. This involves a significant degree	• Assessed the criteria for staging of loans based on their past
of estimation and judgement, including determination of	due status as per the requirements of Ind AS 109. Tested a
staging of financial assets; estimation of probability of defaults,	sample of performing loans to assess whether any SICR or
loss given defaults, exposure at defaults; and forward-looking	loss indicators were present requiring them to be classified
factors, micro and macro-economic factors, in estimating the	under higher stages.
expected credit losses.	• Involved internal experts for testing of the ECL model and
Additionally, regulatory changes on asset classification due	computation, including factors that affect the PD, LGD and
to changes pursuant to RBI Circular dated November 12, 2021	EAD considering various forward looking, micro and macro-
read with RBI Circular February 15, 2022, have been collectively	economic factors.
considered by the management in the classification / staging	• Tested assumptions used by the management in determining
of financial assets including additional provision as part of its	the overlay for macro-economic and other factors.
Expected Credit Loss provision on loans.	• Tested the arithmetical accuracy of computation of ECL

Key audit matters	How our audit addressed the key audit matter
The Company has also recorded a management overlay as part of its ECL, to reflect among other things an increased risk of deterioration in relevant macro-economic factors. Such overlays are based on various uncertain variables which could result in actual credit loss being different than that being estimated.	provision performed by the Company in spreadsheets. • Assessed disclosures included in the financial statements in respect of expected credit losses.
In view of the high degree of management''s judgement involved in estimation of ECL and the overall significance of the impairment loss allowance to the financial statements, it is considered as a key audit matter.

We have determined that there are no other key audit matters to communicate in our report.

Other Information

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Chairman''s Message, Director''s Report including annexures, Management and Discussion Analysis, Business Responsibility and Sustainability Report, Corporate Governance Report, but does not include the financial statements and our auditor''s 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 such other information is materially inconsistent with the financial statements or our knowledge obtained in the 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.

Responsibilities of Management and those charged with governance for the Financial Statements

The Company''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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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 Company''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 Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company''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 Company 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 Company''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 Company 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. As required by the Companies (Auditor''s Report) Order, 2020 (the “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 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 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 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 these financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2024 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph (b) above on reporting under Section 143(3)(b) and paragraph (i)(vi) below on reporting under Rule 11(g);

(i) 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 Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 35 to the financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 6, Note 14 and Note 19 to the financial statements;

iii) There has been no delay in transferring amounts, 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, other than as disclosed in the note 49 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“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, other than as disclosed in the note 49 to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding 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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed 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 (a) and (b) contain any material misstatement.

v) No dividend has been declared or paid during the year by the Company;

vi) Based on our examination which included test checks and as explained in note 50 to the financial statements, the Company 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; and during the course of our audit, we have not noted any instances of the audit trail feature being tampered at the application level. However, in the absence of Service Organization Controls (SOC) report covering the audit trail feature at a database level, we are unable to comment on whether audit trail feature of the said software was enabled and operated throughout the year or whether there were any instances of the audit trail feature being tampered with at a database level. Further, customer loan maintenance software, does not have an audit trail feature, and accordingly, we are unable to comment whether audit trail feature was tampered with, in this regard.

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm Registration Number - 101049W/E300004

per Bharath N S

Partner

Membership Number: 210934 UDIN: 24210934BKFUMJ8486

Place of Signature: Chennai Date: April 30, 2024

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Mar 31, 2023

To the Members of Five-Star Business Finance Limited Report on the Audit of the Financial StatementsOpinion

We have audited the accompanying financial statements of Five-Star Business Finance Limited (the “Company”), which comprise the Balance sheet as at March 31 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity 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 Companies Act, 2013, as amended (the “Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive income, its cash flows and the changes in equity 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 Company 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 thereunder, 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.

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. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matter	How our audit addressed the key audit matter
(a) Impairment of Loans based on expected credit loss model (Refer Note 6 of the financial statements)
Loans to customers represent a significant portion of the total assets of the	Our audit procedures included the following:
Company. The Company has loans aggregating INR 693,325.45 lakhs as at	• Read and assessed the Company’s accounting policies for
March 31, 2023.	impairment of financial assets considering the requirements
As per the expected credit loss model of the Company developed	of Ind AS 109 and the governance framework approved by the Board of Directors pursuant to Reserve Bank of India guidelines.
in accordance with the principles set out in Ind-AS 109 on Financial Instruments, the Company is required to estimate the probability of loss	• Evaluated the management estimates by understanding the
/ expected loss based on past experience and future considerations. This	process of ECL estimation and related assumptions and tested
involves a significant degree of estimation and judgement, including	the controls around data extraction, validation and computation.
determination of staging of financial assets; estimation of probability of defaults, loss given defaults, exposure at defaults; and forward-looking	• Assessed the criteria for staging of loans based on their past due
factors, micro and macro-economic factors, in estimating the expected	status as per the requirements of Ind AS 109. Tested a sample of
credit losses.	performing loans to assess whether any SICR or loss indicators
Additionally, regulatory changes on asset classification due to changes pursuant to RBI Circular dated November 12, 2021 read with RBI Circular	were present requiring them to be classified under higher stages. • Involved internal experts for testing of the ECL model and computation,
February 15, 2022, have been collectively considered by the management in	including factors that affect the PD, LGD and EAD considering
the classification / staging of financial assets including additional provision	various forward looking, micro and macro-economic factors.
as part of its Expected Credit Loss provision on loans. In view of the high degree of management’s judgement involved in	• Tested assumptions used by the management in determining the overlay for macro-economic and other factors.
estimation of ECL and the overall significance of the impairment loss allowance to the financial statements, it is considered as a key audit matter.	• Assessed disclosures included in the financial statements in respect of
expected credit losses. We have determined that there are no other key audit matters to communicate in our report.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Chairman’s Message, Director’s Report including annexures, Management Discussion and Analysis, Business Responsibility and Sustainability Report, Corporate Governance Report, but does not include the financial statements and our auditor’s 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 such other information is materially inconsistent with the financial statements or our knowledge obtained in the 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.

Responsibilities of Management and those charged with governance for the Financial Statements

The Company’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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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 Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company’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 Company 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 Company’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 Company 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. As required by the Companies (Auditor’s Report) Order, 2020 (the “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 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Companies (Indian Accounting Standards) Rules, 2015, as amended;

(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 with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(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 Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 35 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 6, Note 14 and Note 19 to the financial statements;

iii. There has been no delay in transferring amounts, 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, other than as disclosed in the note 49 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including

foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“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, other than as disclosed in the note 49 to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding 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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed 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 (a) and (b) contain any material misstatement.

v. No dividend has been declared or paid during the year by the Company;

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.