Auditor Report of Sakthi Finance Ltd.

Mar 31, 2025

1. We have audited the accompanying Financial Statements
of Sakthi 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), Statement of Changes in Equity and Statement
of Cash Flows for the year then ended on that date and
notes to the Financial Statements, including a summary
of material accounting policies and other explanatory
information.

2. 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 read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, ("Ind AS") and other
accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2025, its
profit including other comprehensive income, the changes
in equity and its cash ffows for the year ended on that
date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards
on Auditing (SAs) 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 (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 Code
of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis
for our opinion.

key Audit Matters

4. 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 matters described
below to be the key audit matters to be communicated in
our report.

Description of key Audit Matter

Description of key Audit Matter

Description of Auditors'' Response

4.1 Asset Classification Accuracy in identification and categorization of Loan receivables into performing and non-performing assets and in ensuring appropriate asset classification, existence of security, income recognition, provisioning/ write off thereof and completeness of disclosure including compliance with applicable guidelines/directions issued by Reserve Bank of India (RBI) (hereinafter referred to as RBI guidelines). We observed that Asset classification and Provisioning based on various factors including existence of security in accordance with RBI guidelines has bearing on the Financial Statements. Hence,we determine this to be a Key audit matter.

• We have assessed the systems and processes laid down by the company to appropriately identify and classify the Loan receivables including those in place to ensure correct classification, income recognition and provisioning/ write-off as per applicable RBI guidelines. • The audit approach includes testing the existence and effectiveness of the control environment laid down by the management in Asset classification and conducting detailed substantive verification on selected samples of continuing and new transactions in accordance with the principles laid down in the Standards on Auditing and other guidance issued by Institute of Chartered Accountants of India. • Agreements entered by management with customers on significant transactions including related to Loan receivables have been examined to ensure compliance. • We have also reviewed the reports obtained from Information systems audit, Internal audit, Secretarial audit and Inspection reports issued by RBI. The impact of all significant external and internal events including those if any, subsequent to Balance Sheet date have been taken into consideration for the above purposes. • Compliance with material disclosure requirements prescribed by RBI guidelines and other statutory requirements have been verified. • Based on the test of controls and other substantive audit procedures performed, the asset classification, provisioning, and the related disclosure in the Financial Statements are reasonable.

Description of key Audit Matter	description of auditors'' Response
4.2 information technology system The dependence of Information technology (IT) system is run throughout the operating cycle of the company. Hence the reliability on Company''s key financial accounting and reporting processes are tied with the effectiveness and efficiency of IT systems, IT controls over the voluminous transactions, process around such information systems and the usage of information from such systems. We observed that any probability of deficiencies in control over IT systems such as validation failures, incorrect input data, improper segregation of duties, unauthorized access to IT system, lack of monitoring may result in the financial reporting being misstated. In view of the same, we have considered this as Key Audit Matter.	Our audit procedures focused on the following: • Our audit procedures focused on the IT infrastructure and applications relevant to the financial reporting: • Evaluating the IT policy and procedures of the Company in accordance with accepted standards, guidelines and practices. • Reviewing the organizational structure with job description, managerial policy and deployment of IT resources with respect to segregation of duties in IT environment to ensure that unauthorized data entry cannot take place and unauthorized programs are not allowed to run. • The aspects covered in the IT systems General Control audit were (i) User Access Management (ii) System maintenance control • have been ensured by understanding the design and the operating effectiveness of such controls in the system; • Understanding updation that were made to the IT landscape during the audit period and assessing the relevant information for financial reporting. • Application level embedded controls have been reviewed by performing validation checks, test check on logical access controls, a run through test to ensure non-manipulation of transaction entered into the system and other compensatory controls, wherever applicable. • Based on our verification of checks and evaluation of controls over information technology and based on the reports obtained from information system audit, management''s assessment on impact of information technology over financial reporting is considered to be reasonable.
4.3 impairment Loss allowance Management''s judgements in the calculation of impairment allowances have significant impact on the Financial Statements. The estimates regarding impairment allowances are complex and require a significant degree of judgement, which increased with Expected Credit Loss ("ECL") model as required by Ind Accounting Standard 109 (Ind AS 109) relating to "Financial instruments." Management is required to determine the expected credit loss that may occur over either a 12-month period or the remaining life of an asset, depending on the categorisation of the individual asset. The key areas of judgement include: 1. Categorisation of loans in Stage 1, 2 and 3 based on identification of: a. exposures with significant increase in credit risk since their origination and b. Individually credit impaired/default exposures. 2. Techniques used to determine Loss Given Default (''LGD'') and Probability of Default (''PD'') to calculate ECL 3. The impact of different forwardlooking information including future macroeconomic conditions in the determination of ECL. Considering the interpretations and assumptions made by Management in developing ECL models, the accuracy of data ffows required for the estimating impairment loss and on considering high degree of Management''s judgement involved such estimation, it is considered as a key audit matter.	• We obtained understanding of management''s assessment of impairment of loans including the impairment allowance policy and ECL modelling methodology. • We assessed the design and implementation, and tested the operating effectiveness of controls over the modelling process including governance over monitoring of the model and approval of key assumptions. • We also assessed the approach of the Company for categorisation of the loans in various stages reflecting the inherent risk in the respective loans. • For a sample of financial assets, we tested the correctness of stage-wise categorisation, reasonableness of PD, accuracy of LGD and ECL computation. • We also assessed the appropriateness of the impairment methodology adopted by the management. This included assessing the appropriateness of key judgements. We tested the accuracy of key data inputs and calculations used in this regard. • Based on the above work performed, management''s assessment of impairment loss allowance and related disclosure are considered to be reasonable.

information Other than the Financial Statements and

Auditor''s Report thereon

5. The Company''s Board of Directors is responsible for
the preparation of the other information. The other
information comprises the Management Discussion
and Analysis, Board''s Report including Annexures to
Board''s Report, Corporate Governance and Shareholder''s
Information, but does not include the Financial Statements
and our auditor''s report thereon.

6. The other information is expected to be made available
to us after the date of this auditor''s report. Our opinion
on the Financial Statements does not cover the other
information and we do not express any form of assurance
conclusion thereon.

7. In connection with our audit of the Financial Statements,
our responsibility is to read the other information
identified above when it becomes available and in
doing so, consider whether the other information is
materially inconsistent with the Financial Statements
or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. Based on the work
we have performed on other information, if we conclude
that there is a material misstatement, if any, of this other
information, we are required to report that fact. We have
nothing to report in this regard.

Other Matters

8. The Audited Financial Statement for the year ended
March 31,2024 have been audited by the predecessor
auditor vide their Auditor''s report dated 25.05.2024.
who expressed an unmodified opinion on those financial
statements. Our opinion on the statement is not modified
in respect of this matter.

Responsibilities of Management and Those Charged with

Governance for the Financial Statements

9. 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),
changes in equity and cash fiows of the Company in
accordance with the accounting principles generally
accepted in India, including the Ind AS. 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.

10. In preparing the Financial Statements, the Board of
Directors 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 the Board
of Directors either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Financial

statements

12. 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.

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

a. 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.

b. Obtain an understanding of internal 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.

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

d. 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.

e. 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.

14. 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.

15. 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.

16. 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.

Report on Other Legal and Regulatory Requirements

17. 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 Companies Act, 2013, we give in the "Annexure A" a
statement on the matters specified in paragraphs 3 and 4
of the Order.

18. 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 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 Companies
(Indian Accounting Standard) Rules, 2015 as amended.

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

f. With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and the operating effectiveness of such
controls, refer to our separate Report in "Annexure B".

g. With respect to the matter to be included in the Auditors''
Report under Section 197(16) of the Act: In our opinion
and according to the information and 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 Auditor''s 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: 32 to the Financial
Statements.

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

iii) There has been no delay in transferring amounts
required to be transferred to the Investor Education
and Protection Fund by the Company except for
'' 500 that has not been transferred to IEpF for
the reason described in Note 18 to the Financial
Statements.

iv) a) The management has represented that, to the

best of its knowledge and belief, 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 persons or entities, including
foreign entities ("Intermediaries") with the
understanding, whether recorded in writing or
otherwise, that the Intermediary shall whether
directly or indirectly lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the 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, no funds
have been received by the Company from any
persons or entities, 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 as considered
reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused
us to believe that the representations under
subclause (i) and (ii) of Rule 11 (e), as provided
under (a) and (b) above, contain any material
mis-statement

v) The equity dividend declared and paid during the
year by the Company relating to financial year 2023¬
24 is in compliance with Section 123 of the Act.
The interim dividend declared and paid by the
company on Redeemable, Cumulative, Preference
Shares during the current year is in compliance with
Section 123 of the Act.

vi) Based on our examination which included test
checks, the company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail
(edit log) facility. The audit trail function has operated
throughout the year for all relevant transactions

since ivss

recorded in the software. Further, during the course
of our audit we did not come across any instance
of audit trail feature being tampered with and the
audit trail has been preserved by the Company as
per the statutory requirements for record retention.

For P N RAGHAVENDRA RAO &CO.,
Chartered Accountants
Firm Registration Number: 003328S

P R Vittel

Partner

Coimbatore Membership Number: 018111

30th May 2025 UDIN: 25018111BMRJZV2916

---

Mar 31, 2024

To the Members of Sakthi Finance Limited Report on the Audit of the Financial Statements Opinion

1. We have audited the accompanying Financial Statements of Sakthi Finance Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year ended on that date and notes to the Financial Statements, including a summary of the material accounting policies and other explanatory information (hereinafter referred to as "the Financial Statements").

2. 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 read with the Companies(Indian Accounting Standards) Rules, 2015 as amended,(''lnd AS'') and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2024, its profit and other comprehensive income/ loss, changes in equity and its cash ffows for the year ended on that date.

Basis for Opinion

3. We conducted our audit of the Financial Statements in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those SAs 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 ("ICAl") 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 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..

Description of key Audit matter
key Audit matter	How our audit addressed the key Audit Matter
4.1 Asset Classification Accuracy in identification and categorization of receivables from financing activities (loans) as performing and non-performing assets and in ensuring appropriate asset classification, existence and valuation of security/ collaterals, income recognition, provisioning/ writeoff thereof and completeness of disclosure including compliance with applicable guidelines/directions issued by Reserve Bank of India ("RBI"). As part of our risk assessment, we determined that accuracy of asset classification has bearing on the Financial Statements as a whole. Given the complexity of the matter, we determined this to be a Key Audit Matter.	Our audit procedures included the following: • We have assessed the systems and processes laid down by the company to appropriately identify and classify the receivables from financing activities including those in place to ensure appropriate asset classification, income recognition and provisioning/ write-off, including nonperforming assets, existence and valuation of security/ collaterals as per applicable RBI guidelines/directions. • The audit approach includes testing the existence and effectiveness of the control environment laid down by the management and conducting detailed substantive verification on selected samples of continuing and new transactions in accordance with the principles laid down in the Standards on Auditing and other guidance issued by the Institute of Chartered Accountants of India ("ICAl"). • Agreements entered into regarding significant transactions including related to Loan Receivables have been examined to ensure compliance. • We have also reviewed the reports generated from management information systems, audit/ inspection reports issued by the internal auditors and RBI. • The impact of all significant external and internal events including those if any, subsequent to Balance Sheet date have been taken into consideration for the above purposes. • Compliance with material disclosure requirements prescribed by RBI guidelines and other statutory requirements have been verified.

key Audit Matters

4. 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 year. 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.

key Audit Matter	How our audit addressed the key Audit Matter
4.2 impairment of Loans (Expected Credit Losses) (Refer to the Material Accounting Policies in Note 3.a.(v) to the Financial Statements and Note 45 to the Financial Statements).
Management''s judgements in the calculation of impairment allowances have significant impact on the Financial Statements. The estimates regarding impairment allowances are complex and require a significant degree of judgement, which increased with Expected Credit Loss ("EcL") model as required by Ind AS 109 relating to "Financial Instruments." Management is required to determine the expected credit loss that may occur over either a 12-month period or the remaining life of an asset, depending on the categorization of the individual asset. The key areas of judgement include: 1. Categorization of loans into Stage 1, 2 and 3 based on identification of: a. Exposures with significant increase in credit risk since their origination and b. Individually impaired / default exposures and determination of Exposure at Default (''EAD''). 2. Techniques used to determine Loss Given Default (’LGD'') and Probability of Default (''PD'') to calculate ECL. 3. The impact of different forward-looking information including future macro-economic factors in the determination of ECL. These judgements require new models to be built and implemented to measure the expected credit losses on certain financial assets measured at amortized cost. Management has made a number of interpretations and assumptions when designing and implementing models that are compliant with the standards. The accuracy of data ffows and the implementation of related controls are critical for the integrity of the estimated impairment provisions. In view of such high degree of Management''s judgement involved in estimation of ECL, it is considered as a key audit matter.	Our Audit Procedures included the following: • We obtained understanding of management''s assessment of impairment of loans including the Ind AS 109 implementation process, impairment allowance policy and ECL modelling methodology. • We assessed the design and implementation and tested the operating effectiveness of controls over the modelling process including governance over monitoring of the model and approval of key assumptions. • We also assessed the approach of the Company for categorization of the loans into various stages reflecting the inherent risk in the respective loans. • For a sample of financial assets, we tested the correctness of stage-wise categorization, reasonableness of PD, accuracy of LGD and ECL computation. • We also assessed the appropriateness of the impairment methodology adopted by the management including the presentation and disclosure requirements. This included assessing the appropriateness of key judgements. We tested the accuracy of key data inputs and calculations used in this regard. Based on the above work performed, management''s assessment of impairment loss allowance and related disclosures are considered to be reasonable.
4.3 information technology system The dependence of Information technology ("iT") system is run throughout the operating cycle of the company. Hence the reliability on Company''s key financial accounting and reporting processes are tied with the effectiveness and efficiency of IT systems, IT controls over the voluminous transactions, process around such information systems and the usage of information from such systems. We observed that any probability of deficiencies in control over IT systems such as validation failures, incorrect input data, improper segregation of duties, unauthorized access to IT system, lack of monitoring may result in the financial accounts and report being misstated.	Our audit procedures focused on the following: • IT infrastructure and applications relevant to the financial reporting. • Evaluating the IT policy and procedures of the Company in accordance with accepted standards, guidelines, practices and External Information Security ("iS") Audit performed in respect thereof. • Reviewing the organizational structure with job description, managerial policy and deployment of IT resources with respect to segregation of duties in IT environment to ensure that unauthorized data entry cannot take place and unauthorized programs are not allowed to run.

key Audit Matter

How our audit addressed the key Audit Matter

In view of this, we have considered this as Key Audit Matter and had focus on IT systems and controls, user access management, segregation of duties, system reconciliation controls and system application controls due to the complexity of the IT environment, huge daily operational volume across numerous locations and the reliance on automated and IT dependent manual controls.

• The aspects covered in the IT systems General Control audit were: (i) User Access Management (ii) System maintenance control have been ensured by understanding the design and the operating effectiveness of such controls in the system; • Understanding updates that were made to the IT landscape during the audit period and assessing the relevant information for financial reporting • Application level embedded controls have been reviewed by performing validation checks, test check on logical access controls, a run through test to ensure non-manipulation of transaction entered into the system and other compensatory controls, wherever applicable

Other information

5. The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s Annual Report, but does not include the Financial Statements and our auditor''s report thereon.

6. The other information is expected to be made available to us after the date of this auditor''s report. Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

8. 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 and take necessary actions, as applicable under the relevant laws and regulations.

Responsibilities of Management and Those Charged with

Governance for the Financial Statements

9. The Company''s Board of Directors are 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 State of Affairs, profit including Other Comprehensive Income / loss, Changes in Equity and Cash Flows of the Company 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 and other accounting principles generally accepted in India.

10. 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 of the appropriate accounting software for ensuring compliance with applicable laws and regulations including those related to retention of audit logs; 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.

11. In preparing the Financial Statements, the 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 have no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Financial

Statements

13. 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 Standards of Auditing ("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.

14. 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 and Board of Directors.

• Conclude on the appropriateness of Management''s and Board of Directors'' use of the going concern basis of accounting in preparation of Financial Statements 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.

15. 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.

16. 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.

17. 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 year 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

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

19. (A) 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 in electronic mode on servers physically located in India, so far as it appears from our examination of those books and further the process of taking daily back-up is in place. Refer Note 56 to the Financial Statements. In respect of reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended), please refer to matters stated in paragraph 19(B)(f) below.

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 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 the Companies (Indian Accounting Standards) Rules, 2015, as amended.

e. On the basis of the written representations received from the directors as on 31 March 2024, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 19(A)(b) above (on reporting under section 143(3)(b) of the Act) and paragraph 19(B)(f) below (on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended)).

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 B" to this report.

(B) 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:

a. The Company has disclosed the impact of pending litigations as at 31st March 2024 on its financial position in its Financial Statements - Refer Note 32(i) to the financial statements.

b. The Company has made provision, as required under the applicable law or Ind As, for material foreseeable losses, if any, on Long-term contracts. The company did not have derivative contracts for which there were any material foreseeable losses.

c. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund ("IEPF") by the Company except for '' 500 that has not been transferred to IEPF for the reason described in Note 18 to the financial statements.

d. i) The Management has represented that, to the

best of their knowledge and belief, as disclosed in Note 36(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 ("Ultimate Beneficiaries") by or on behalf of the Company

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

ii) The Management has also represented that, to the best of their knowledge and belief, as disclosed in Note 36(j) 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 ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, performed by us, nothing has come to our notice that has caused us to believe that the representations under paragraphs 19 (B) (d) (i) and 19 (B) (d) (ii) contain any material misstatement.

e) i) The Equity dividend recommended for the

previous year, declared and paid by the Company during the current year, is in accordance with Section 123 of the Act, to the extent it applies to declaration and payment of dividend.

ii) The interim dividend declared and paid by the Company on Redeemable, Cumulative, Preference Shares during the current year is in accordance with Section 123 of the Act, to the extent it applies to declaration and payment of dividend.

iii) As stated in Note 57 to the financial statements, the Board of Directors of the Company have recommended an equity dividend for the year, which is subject to the approval of the members at the ensuing Annual General Meeting. Such equity dividend recommended by the Board of Directors is in accordance with Section 123 of the Act, to the extent it applies to declaration of dividend.

f) Based on our examination which included test checks, the Company has used accounting software''s for maintaining the books of accounts, which has a feature of recording audit (edit log) facility and the same has been operating throughout the year for all the relevant transactions recorded in the software''s. Further during the course of our audit, we did not come across any instance of audit trail (edit log) feature been tampered with. As proviso to

Rule 3(1) of the Companies (Accounts) Rules, 2014, as amended, is applicable from 1st April 2023, 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 is not applicable for the financial year ended 31st March 2024

(C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid/

provided by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/ provided to directors is within the limits laid down under Section 197 of the Act.

For CSK Prabhu & Co., Chartered Accountants Firm Registration Number : 002485S

CSk Prabhu

Partner

Coimbatore Membership No.019811

25th May 2024 UDIN: 24019811BKFAJN7471

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Mar 31, 2023

Report on the Audit of the financial statements

Opinion

1. We have audited the Financial Statements of Sakthi Finance Limited ("the Company"), which comprise the balance sheet as at 31 March 2023, the statement of profit and loss (including other comprehensive income), statement of changes in equity and statement of cash flows for the year then ended and notes to the Financial Statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Financial Statements").

2. 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 accounting principles generally accepted in India, of the state of affairs of the company as at 31 March 2023, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those SAs 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 ("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 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.

key Audit Matters

4. 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.

Description of key audit matter
key audit matter	How our audit addressed the key audit matter
4.1 Asset Classification accuracy in identification and categorization of receivables from financing activities (loans) as performing and non-performing assets and in ensuring appropriate asset classification, existence and valuation of security/ collaterals, income recognition, provisioning/ writeoff thereof and completeness of disclosure including compliance with applicable guidelines/directions issued by Reserve Bank of India (RBI). As part of our risk assessment, we determined that accuracy of asset classification has bearing on the Financial Statements as a whole. Given the complexity of the matter, we determined this to be a Key Audit Matter.	Our audit procedures included the following: • We have assessed the systems and processes laid down by the company to appropriately identify and classify the receivables from financing activities including those in place to ensure appropriate asset classification, income recognition and provisioning/ write-off, including nonperforming assets, existence and valuation of security/ collaterals as per applicable RBI guidelines/directions. • The audit approach includes testing the existence and effectiveness of the control environment laid down by the management and conducting detailed substantive verification on selected samples of continuing and new transactions in accordance with the principles laid down in the Standards on Auditing and other guidance issued by the Institute of Chartered Accountants of India ("ICAI"). • agreements entered into regarding significant transactions including related to Loan Receivables have been examined to ensure compliance. • We have also reviewed the reports generated from management information systems, audit/ inspection reports issued by the internal auditors and RBI. • The impact of all significant external and internal events including those if any, subsequent to Balance Sheet date have been taken into consideration for the above purposes. • Compliance with material disclosure requirements prescribed by RBI guidelines and other statutory requirements have been verified.

key Audit Matter	How our audit addressed the key Audit Matter
4.2 impairment of Loans (Expected Credit Losses) (Refer to the Accounting Policies in Note 2.g.(v) to the Financial Statements and Note 45 to the Financial Statements)
Management''s judgements in the calculation of impairment allowances have significant impact on the Financial Statements. The estimates regarding impairment allowances are complex and require a significant degree of judgement, which increased with Expected Credit Loss ("EcL") model as required by Ind AS 109 relating to "Financial Instruments." Management is required to determine the expected credit loss that may occur over either a 12-month period or the remaining life of an asset, depending on the categorization of the individual asset. The key areas of judgement include: 1. Categorization of loans into Stage 1, 2 and 3 based on identification of: a. Exposures with significant increase in credit risk since their origination and b. Individually impaired / default exposures and determination of Exposure at Default (''EAD''). 2. Techniques used to determine Loss Given Default (’LGD'') and Probability of Default (''PD'') to calculate ECL. 3. The impact of different forward-looking information including future macro-economic conditions in the determination of ECL. These judgements require new models to be built and implemented to measure the expected credit losses on certain financial assets measured at amortized cost. Management has made a number of interpretations and assumptions when designing and implementing models that are compliant with the standards. The accuracy of data flows and the implementation of related controls are critical for the integrity of the estimated impairment provisions. In view of such high degree of Management''s judgement involved in estimation of ECL, it is considered as a key audit matter.	Our Audit Procedures included the following: • We obtained understanding of management''s assessment of impairment of loans including the Ind AS 109 implementation process, impairment allowance policy and ECL modelling methodology. • We assessed the design and implementation and tested the operating effectiveness of controls over the modelling process including governance over monitoring of the model and approval of key assumptions. • We also assessed the approach of the Company for categorization of the loans into various stages reflecting the inherent risk in the respective loans. • For a sample of financial assets, we tested the correctness of stage-wise categorization, reasonableness of PD, accuracy of LGD and ECL computation. • We also assessed the appropriateness of the impairment methodology adopted by the management including the presentation and disclosure requirements. This included assessing the appropriateness of key judgements. We tested the accuracy of key data inputs and calculations used in this regard. Based on the above work performed, management''s assessment of impairment loss allowance and related disclosures are considered to be reasonable.
4.3 information technology system The dependence of I nformation technology ("iT") system is run throughout the operating cycle of the company. Hence the reliability on company''s key financial accounting and reporting processes are tied with the effectiveness and efficiency of IT systems, IT controls over the voluminous transactions, process around such information systems and the usage of information from such systems. We observed that any probability of deficiencies in control over IT systems such as validation failures, incorrect input data, improper segregation of duties, unauthorized access to iT system, lack of monitoring may result in the financial accounts and report being misstated.	Our audit procedures focused on the following: • IT infrastructure and applications relevant to the financial reporting. • Evaluating the IT policy and procedures of the Company in accordance with accepted standards, guidelines, practices and External Information Security ("iS") Audit performed in respect thereof. • Reviewing the organizational structure with job description, managerial policy and deployment of IT resources with respect to segregation of duties in IT environment to ensure that unauthorized data entry cannot take place and unauthorized programs are not allowed to run.

key audit matter

How our audit addressed the key audit matter

In view of the same, we have considered this as Key Audit Matter and had focus on IT systems and controls, user access management, segregation of duties, system reconciliation controls and system application controls due to the complexity of the IT environment, huge daily operational volume across numerous locations and the reliance on automated and IT dependent manual controls.

• The aspects covered in the IT systems General Control audit were: (i) User Access Management (ii) System maintenance control have been ensured by understanding the design and the operating effectiveness of such controls in the system; • Understanding updates that were made to the IT landscape during the audit period and assessing the relevant information for financial reporting. • Application level embedded controls have been reviewed by performing validation checks, test check on logical access controls, a run through test to ensure non-manipulation of transaction entered into the system and other compensatory controls, wherever applicable.

information other than the Financial Statements and auditor''s

report thereon

5. The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s Annual Report, but does not include the Financial Statements and our auditor''s report thereon.

6. The other information is expected to be made available to us after the date of this auditor''s report. Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

8. 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 and take necessary actions, as applicable under the relevant laws and regulations.

Management''s and Board of Directors'' Responsibilities for

the Financial statements

9. The Company''s management and Board of Directors are 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 ("ind AS") specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended.

10. 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.

11. 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 have no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Financial

statements

13. 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 Standards of Auditing ”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.

14. 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 and Board of Directors.

• Conclude on the appropriateness of Management''s and Board of Directors'' use of the going concern basis of accounting in preparation of Financial Statements 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.

15. 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.

16. 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.

17. 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.

Report on Other Legal and Regulatory Requirements

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

19. (A) 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 in electronic mode on servers physically located in India, so far as it appears from our examination of those books and further the process of taking daily back-up is in place. Refer Note 56 to the Financial Statements.

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 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 the Companies (Indian Accounting Standards) Rules, 2015, as amended.

e. On the basis of the written representations received from the directors as on 31 March 2023, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 Financial Statements of the Company and the operating

effectiveness of such controls, refer to our separate Report in "Annexure-B" to this report.

19. (B) 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, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2023 on its financial position in its Financial Statements - Refer Note 32(i) to the financial statements.

b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund ("IEPF") by the Company except for '' 500 that has not been transferred to IEPF for the reason described in Note 18 to the financial statements.

d) i) The Management has represented that, to the

best of it''s knowledge and belief, as disclosed in Note 36(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 persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

ii) The Management has also represented that, to the best of it''s knowledge and belief, as disclosed in Note 36(j) to the financial statements, no funds have been received by the Company from any persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

iii) 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) contain any material misstatement.

e) i) The Equity dividend recommended for the

previous year, declared and paid by the Company during the current year, is in accordance with Section 123 of the Act, to the extent it applies to declaration and payment of dividend.

ii) The interim dividend declared and paid by the Company on Redeemable, Cumulative, Preference Shares during the current year is in accordance with Section 123 of the Act, to the extent it applies to declaration and payment of dividend.

iii) As stated in Note 57 to the Financial Statements, the Board of Directors of the Company have recommended an equity dividend for the year, which is subject to the approval of the members at the ensuing Annual General Meeting. Such equity dividend recommended by the Board of Directors is in accordance with Section 123 of the Act, to the extent it applies to declaration of dividend.

f) 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 only with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

19. (C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid/ provided by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/ provided to directors is within the limits laid down under Section 197 of the Act.

For CSK Prabhu & Co., Chartered Accountants Firm''s Registration No: 002485S Mahesh Prabhu Partner

Coimbatore Membership No.214194

26th May 2023 UDIN: 23214194BGY0PT8995

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Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

To

The Members of Sakthi Finance Limited

Report on the Financial Statements

We have audited the accompanying financial statements of SAKTHI FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 mis-statement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material mis-statement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material mis-statement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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.

Opinion

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 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 31st March, 2018, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the CentralGovernment of India in exercise of the powers conferred by sub-section (11) of Section 143 of the Companies Act, 2013, we give in the "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in"Annexure B"; and

(g) With respect to other matters to be included in the Auditor''s 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 as referred to in Note No.26 to the financial statements.

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

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

	For P K Nagarajan & Co.,
	Chartered Accountants
	Firm Regn. No.:016676S
	P K Nagarajan
Coimbatore	Partner
30th May 2018	Membership No. 025679

The Annexure- ''A'' referred to in our Independent Auditors'' report to the members of the company on the financial statements for the year ended 31st March 2018, we report that:

i. a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us, the title deeds of immovable properties, as disclosed in Note No.10 to the financial statements, are held in the name of the company.

ii. The company does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the Order are not applicable to the company.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore, the provisions of Clause 3(iii) (a) to (c) of the order are not applicable to the company.

iv. In our opinion and according to the information and the explanations given to us, the company has not given/provided any loans, guarantee and securities to parties mentioned in Section 185 of the Companies Act 2013. The provision of Section 186 is not applicable to the Company, as it is a Non-Banking Financial Company.

v. The company has accepted deposits from the public. The directives issued by the Reserve Bank of India (RBI) and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder, wherever applicable, have been complied with. No order has been passed by National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. The Central Government has not specified the maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act, 2013 for the activities of the company.

vii. a) The company is regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, service tax, sales tax, cess and any other applicable material statutory dues with the appropriate authorities. There are no such statutory dues as at the last day of the financial year, remaining in arrears for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, the disputed statutory dues (in case of income tax, service tax and cess) aggregating to Rs. 1338.12 Lakhs that have not been deposited on account of matters pending before appropriate authority are as under:

Name of the Statute	Nature of dues	Amount (Rs. in Lakhs)	Period to which the amount relates	Forum where the dispute is pending
Income Tax Act, 1961	Income Tax	9.83	AY 2012-13	In co me Tax Appellate Tribunal, Chennai
Finance Act 1994	Service Tax	1328.29	Oct 2009 to Sept 2014	High Court of Madras
	Total	1338.12

viii. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks, Government and debenture holders during the year.

ix. In our opinion and according to the information and the explanations given to us, the Company has utilized the money raised by way of term loans during the year for the purpose for which those were raised. The Company has not raised any money by way of public offer.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on the examination of the records, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, para 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, wherever, applicable. The details of such related party transactions have been disclosed in the notes to the financial statements as required under the Accounting Standard (AS) 18.

xiv. During the year under review, the company has made private placement of preference shares and the requirements of Section 42 of the Act have been complied with. The amounts raised have been used for the purpose for which they were raised. Further, during the year, the company has neither made any fully or partly convertible debentures nor any preferential allotment of shares.

xv. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with the Directors or persons connected with them. Accordingly, para 3(xv) of the Order is not applicable.

xvi.According to the information and explanations given to us, we report that the company has registered as required, under Section 45-IA of the Reserve Bank of India Act, 1934.

	For P K Nagarajan & Co.,
	Chartered Accountants
	Firm Regn. No.:016676S
	P K Nagarajan
Coimbatore	Partner
30th May 2018	Membership No. 025679

Annexure-''B'' to the Independent Auditors'' report of even date on the Financial Statements of SAKTHI FINANCE LIMITED

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of Sakthi Finance Limited ("the Company") as of 31st March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of the internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of Internal Financial Controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risks. The procedures selected depend on the auditor''s judgment, including the assessment of the risk of material mis-statements of the financial statements, whether due to fraud or error.

We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial control system over financial reporting.

Meaning of Internal Financial Control Over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial controls over financial reporting includes those policies and procedures that:

1) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the company are being made only in accordance with authorizations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitation of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in condition, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

	For P K Nagarajan & Co.,
	Chartered Accountants
	Firm Regn. No.:016676S
	P K Nagarajan
Coimbatore	Partner
30th May 2018	Membership No. 025679

---

Mar 31, 2016

INDEPENDENT AUDITORS REPORT

To

The Members of Sakthi Finance Limited

Report on the Financial Statements

We have audited the accompanying financial statements of SAKTHI FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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.

Opinion

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 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 31st March 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in exercise of the powers conferred by sub-section (11) of Section 143 of the Companies Act, 2013, we give in the "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in"Annexure B"; and

g. With respect to other matters to be included in the Auditor''s 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 explanation given to us;

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note No.27 to the financial statements.

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

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

Annexure A referred to in the Independent Auditors'' report of even date

Re : Sakthi Finance Limited (the Company)

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

c. According to the information and explanations given to us, the title deeds of immovable properties, as disclosed in Note No.10 to the financial statements, are held in the name of the company.

ii. The company does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the Order are not applicable to the company.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act 2013. Therefore, the provisions of Clause 3(iii)(a) to (c) of the Order, are not applicable to the company.

iv. In our opinion and according to the information and the explanations given to us, the company has not given/provided any loans, guarantee and securities to parties mentioned in section 185 of the Companies Act 2013. The provisions of section 186 is not applicable to the Company as it is a Non-Banking Financial Company.

v. The company has accepted deposits from the public. The directives issued by the Reserve Bank of India (RBI) and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, wherever applicable, have been complied with except the directives issued by RBI under Residuary Non-Banking Finance Companies (Reserve Bank) Directions, 1987 in respect of maintenance of liquid assets in investment in unencumbered approved securities as enumerated below:

There is a shortfall of Rs.30.39 lakhs in maintaining the minimum level of liquid assets for a period of 43 days during June 2015 quarter.

No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. The Central Government has not specified the maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act 2013 for the activities of the company.

vii. a. The company is regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, service tax, sales tax, cess and other applicable material statutory dues with the appropriate authorities. There are no such statutory dues as at the last day of the financial year, remaining in arrears for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, the disputed statutory dues (in case of income tax, service tax, and cess) aggregating to Rs.1408.60 Lakhs that have not been deposited on account of matters pending before appropriate authority are as under.

Name of the Statute	Nature of the Dues	Amount (Rs. in Lakhs)	Period to which the amount relates	Forum where the dispute is pending
Income Tax Act, 1961	Income Tax	66.57	AY 2009-10	Commissioner of Income Tax (Appeals), Coimbatore
Income Tax Act, 1961	Income Tax	13.74	AY 2012-13
Finance Act 1994	Service Tax	1328.29	Oct 2009 to Sept 2014	High Court of Madras

viii. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks, Government and debenture holders during the year.

ix. In our opinion and according to the information and the explanations given to us, the Company has utilized the money raised by way of public offer and term loans during the year for the purpose for which those were raised.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and based on the examination of the records, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, para 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the notes to the financial statements as required under the Accounting Standard (AS) 18.

xiv. During the year under review, the Company has made private placement of preference shares and the requirements of Section 42 of the Act have been complied with. The amounts raised have been used for the purpose for which they were raised.

xv. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with the Directors or persons connected with them. Accordingly, para 3(xv) of the Order is not applicable.

xvi. According to the information and explanations given to us, we report that the company has registered as required, under Section 45-IA of the Reserve Bank of India Act, 1934.

For P.N. Raghavendra Rao & Co

Chartered Accountants

Firm Regn. No.:003328S

Pon Arul Paraneedharan

Coimbatore Partner

28th M_ay 2016 Membership No.212860

---

Mar 31, 2015

1. We have audited the accompanying financial statements of SAKTHI FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. 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.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

6. 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.

Opinion

7. 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 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 31st March 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditors' Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

9. 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on 31st March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. 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, 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 as referred to in Note No. 26 to the financial statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

Annexure referred to in the Independent Auditors' report of even date Re : Sakthi Finance Limited (the Company)

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

b. These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

ii. The company does not hold any inventory. Therefore, the provisions of Clause 3(ii)(a) to (b) of the Companies (Auditor's Report) Order 2015 are not applicable to the company.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Therefore, the provisions of Clause 3(iii)(a) to (b) of the Companies (Auditor's Report) Order 2015 are not applicable to the company.

iv. There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the services rendered. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v. The company has accepted deposits from the public. The directives issued by the Reserve Bank of India and provisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder, wherever applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. The Central Government has not specified the maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act 2013 for the activities of the company.

vii. a. The company is regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income-tax, service tax, cess and other applicable statutory dues with the appropriate authorities. There are no such statutory dues as at the last day of the financial year, remaining in arrears for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, the disputed statutory dues (in case of income tax, sales tax, wealth tax, service tax, and cess) aggregating to Rs. 80.31 lakhs that have not been deposited on account of matters pending before appropriate authority are as under.

Name of the Nature of the Amount Period to which the dispute Statue Dues (Rs. in Lakhs) amount relates

Income Tax Income Tax Rs. 66.57 AY 2009-10 Act, 1961

Income Tax Act, 1961 Income Tax Rs. 13.74 AY 2012-13

Name of the Forum where dispute Statue is pending

Income Tax Commissioner of Act, 1961 Income Tax

Income Tax (Appeals), Act, 1961 C°imbat°re

c. During the year there are no amount required to be transferred by the company to investor education and protection fund.

viii. In our opinion, the Company's has no accumulated losses at the end of the financial year. The Company has not incurred cash losses during the year and in the immediately preceding financial year.

ix. The company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

x. The company has not given any guarantee for loans taken by others from banks or financial institutions.

xi. Term loans availed during the year have been applied for the purpose for which the loans were obtained.

xii. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For P.N. Raghavendra Rao & Co Chartered Accountants Firm Regn. No.:003328S

PON ARUL PARANEEDHARAN Coimbatore Partner 30th May 2015 Membership No.212860

---

Mar 31, 2014

1. We have audited the accompanying financial statements of Sakthi Finance Limited (the "Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act 1956 (the "Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013.

This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

b. in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order 2003, as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as the "Order"), and 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, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013; and

e. on the basis of written representations received from the directors as on 31st March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 7 of our report of even date Re : Sakthi Finance Limited (the Company)

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of a substantial part of fixed assets during the year.

ii. The Company does not hold any inventories. Accordingly, the provisions of Clause 4(ii) (a) to (c) of the Companies (Auditor''s Report) Order, 2003 ("CARO" or "Order) are not applicable to the Company.

iii. a. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clause 4(iii)(e) to (g) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. a. According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii. The Central Government has not prescribed the maintenance of cost records under Clause (d) of sub-section (1) of Section 209 of the Act in respect of services of the Company. Accordingly, the provisions of clause 4(viii) of the Order are not applicable to the Company.

ix. a. According to the information and explanations given to us and the records of the Company verified by us, in our opinion, the Company is generally regular in depositing, with appropriate authorities, undisputed statutory dues, including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c. In our opinion and according to the information and explanations given to us, there are no disputed statutory dues.

x. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, the term loans obtained during the year have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act.

xix. In our opinion and according to the information and explanations given to us, with respect to the debentures issued by the Company, requisite security/charge has been created.

xx. As informed to us, the Company has not raised any money by public issue during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For P.N. Raghavendra Rao & Co Chartered Accountants Firm Regn. No.:003328S

P R Vittel Coimbatore Partner 28th May 2014 Membership No.18111

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Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Sakthi Finance Limited (the "Company")'' which comprise the Balance Sheet as at 31st March 2013'' the Statement of Profit and Loss and Cash Flow Statement for the year then ended'' and a summary of significant accounting policies and other explanatory information'' which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position'' financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 (the "Act"). This responsibility includes the design'' implementation and maintenance of internal control 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.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence'' about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment'' including the assessment of the risks of material misstatement of the financial statements'' whether due to fraud or error. In making those risk assessments'' the auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management'' as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us'' the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet'' of the state of affairs of the Company as at 31st March 2013;

b. in the case of the Statement of Profit and Loss'' of the Profit for the year ended on that date; and

c. in the case of the Cash Flow Statement'' of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

7. As required by The Companies (Auditor''s Report) Order'' 2003'' as amended by The Companies (Auditor''s Report) (Amendment) Order'' 2004'' issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as the "Order")'' and 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'' we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by Section 227(3) of the Act'' we report that:

a. we have obtained all the information and explanations which'' to the best of our knowledge and belief'' were necessary for the purpose of our audit;

b. in our opinion'' proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet'' Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion'' the Balance Sheet'' Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

e. on the basis of written representations received from the directors as on 31st March 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on 31st March 2013'' from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Annexure referred to in paragraph 7 of our report of even date Re : Sakthi Finance Limited (the Company)

i. a. The Company has maintained proper records showing full particulars'' including quantitative details and situation of fixed assets.

b. As explained to us'' the fixed assets have been physically verified by the management during the year in a phased periodical manner which'' in our opinion'' is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion'' the Company has not disposed of a substantial part of fixed assets during the year.

ii. The Company does not hold any inventories. Accordingly'' the provisions of Clause 4(ii) (a) to (c) of the Companies (Auditor''s Report) Order'' 2003 ("CARO" or "Order) are not applicable to the Company.

iii. a. According to the information and explanations given to us'' the Company has not granted any loans'' secured or unsecured to companies'' firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly'' the provisions of Clause 4(iii) (a) to (d) of the Order are not applicable to the Company.

b. According to the information and explanations given to us'' the Company has not taken any loans'' secured or unsecured'' from companies'' firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly'' the provisions of Clause 4(iii)(e) to (g) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us'' there is an adequate internal control system commensurate with the size of the Company and the nature of its business'' for the purchase of fixed assets and for the sale of services. During the course of our audit'' we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

v. a. According to the information and explanations provided by the management'' we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us'' the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion'' the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

viii. The Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of services of the Company. Accordingly'' the provisions of Clause 4(viii) of the Order are not applicable and hence not commented upon.

ix. a. According to the information and explanations given to us and the records of the Company verified by us'' in our opinion'' the Company is generally regular in depositing'' with appropriate authorities'' undisputed statutory dues'' including provident fund'' investor education and protection fund'' employees'' state insurance'' income-tax'' sales-tax'' wealth-tax'' service tax'' customs duty and other material statutory dues applicable to it.

b. According to the information and explanations given to us'' no undisputed amounts payable in respect of provident fund'' investor education and protection fund'' employees'' state insurance'' income tax'' wealth tax'' service tax'' sales tax'' customs duty and other undisputed statutory dues were outstanding'' at the year end'' for a period of more than six months from the date they became payable.

c. In our opinion and according to the information and explanations given to us'' there are no disputed statutory dues.

x. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management'' we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions'' banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us'' adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion'' the Company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore'' the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion'' the Company is not dealing in or trading in shares'' securities'' debentures and other investments. Accordingly'' the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us'' the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us'' the term loans obtained during the year have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company'' we report that no funds raised on short-term basis have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Act.

xix. In our opinion and according to the information and explanations given to us'' with respect to the debentures issued by the Company'' requisite security/charge has been created.

xx. As informed to us'' the Company has not raised any money by public issue during the year. Accordingly'' the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. Based on the audit procedures performed and information and explanations given by the management'' we report that no fraud on or by the company has been noticed or reported during the year.

For P.N. Raghavendra Rao & Co

Chartered Accountants

Firm Regn. No.:003328S

P R Vittel

Coimbatore

Partner

29th May 2013 Membership No.18111

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Sakthi Finance Limited as at 31st March 2012, the annexed Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act 1956, we give below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year.

ii. The Company does not hold any inventories and therefore Clause 4(ii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

iii. a. The Company has not granted any loan during the year to companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has, however, granted loan to a company in the earlier year (Balance as at 31.3.2011 : Rs. 25.99 lakhs) which has been fully realised during the year.

b. In our opinion and according to the information and explanations given to us, the rate of interest, and other terms and conditions of the loans granted are prima facie not prejudicial to the interest of the Company.

c. The receipt of principal amount and interest on loan granted is regular and the loan has been fully realised during the year.

d. The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets and for sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act 1956 that need to be entered into the register maintained under that section have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements and exceeding the value of five lakh rupees in respect of any party have been made at prices which are, prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed thereunder. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii. In our opinion, the internal audit system of the Company is commensurate with the size and nature of its business.

viii. The Central Government has not prescribed the maintenance of Cost Records under Section 209(1)(d) of the Companies Act 1956 for the company.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Service tax and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date of becoming payable.

b. In our opinion and according to the information and explanations given to us, there are no disputed statutory dues.

x. The Company has no accumulated losses as at 31st March 2012 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society.

xiv. The Company is not dealing in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans obtained during the year have been utilised for the purpose for which it was obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short term funds for long term investments.

xviii. During the year, the company has made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956 and the price at which such shares have been issued is not prejudicial to the interest of the company.

xix. In our opinion and according to the information and explanations given to us, with respect to the debentures issued by the company, requisite security / charge has been created.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

4. Further to our comments referred to in Paragraph 3 above, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956; and

e. on the basis of written representations received from the directors as on 31st March 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956;

f. in our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other Notes thereon, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

b. in so far as it relates to the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

c. in so far as it relates to the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

For P.N. Raghavendra Rao & Co

Chartered Accountants

Firm Regn. No.:003328S

P R VITTEL

Coimbatore Partner

29th May 2012 Membership No.18111

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Sakthi Finance Limited as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year.

ii. The Company does not hold any inventories and therefore Clause 4(ii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

iii. a. The Company has not granted any loan during the year to companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has, however, granted loan to a company in the earlier year and the balance outstanding as at 31st March 2011 is Rs. 26.00 Lakhs (Maximum outstanding during the year: Rs. 97.74 lakhs).

b. In our opinion and according to the information and explanations given to us, the rate of interest, and other terms and conditions of the loans granted are prima facie not prejudicial to the interest of the Company.

c. The receipt of principal amount and interest on loan granted is regular.

d. The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets and for sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under that section have been so entered.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements and exceeding the value of five lakh rupees in respect of any party have been made at prices which are, prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.

vii. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

viii. The Central Government has not prescribed the maintenance of any Cost Records under Section 209(1)(d) of the Companies Act, 1956.

ix. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Service tax and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable.

b) The disputed statutory dues aggregating to Rs. 31.11 Lakhs that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of Nature Amount Period to Forum where the Statute of the dues ( Rs. in which the the dispute Lakhs) amount is pending relates

IncomeTax Income 31.11 1987–88 to Supreme Court Act, 1961 Tax 1993-94 of India

x. The Company has no accumulated losses as at 31st March 2011 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society.

xiv. The Company is not dealing in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans obtained during the year have been utilised for the purpose for which it was obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short term funds for long term investments.

xviii.During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. In our opinion and according to the information and explanations given to us, the Company has issued Secured Redeemable Non-Convertible debentures amounting to Rs. 22,473.66 Lakhs. The Company has created adequate securities and charges in respect of debentures issued.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

4. Further to our comments referred to in Paragraph 3 above, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

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

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

e. On the basis of written representations received from the directors and taken on record by the Board of Directors of the Company, none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

b. In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

c. In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

For P.N. Raghavendra Rao & Co Firm Regn. No.:003328S Chartered Accountants P R VITTEL Partner Membership No.18111

Coimbatore 30th May 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Sakthi Finance Limited as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give below a statement on the matters specified in paragraphs 4 and 5 of the said Order.

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year.

ii. The Company does not hold any inventories and therefore Clause 4(ii) of the Companies (Auditor’s Report) Order 2003 is not applicable to the Company.

iii. a. The Company has not granted any loan during the year to companies covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has, however, granted loan to a company in the earlier year and the balance outstanding as at 31st March 2010 is Rs. 97.73 Lakhs.

b. In our opinion and according to the information and explanations given to us, the rate of interest, and other terms and conditions of the loans granted are prima facie not prejudicial to the interest of the Company.

c. The receipt of principal amount and interest on loans granted are regular.

d. The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets and for sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under that section have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements and exceeding the value of five lakh rupees in respect of any party have been made at prices which are, prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has accepted deposits from the public and has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder, wherever applicable.

vii. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

viii. The Central Government has not prescribed the maintenance of any Cost Records under Section 209(1)(d) of the Companies Act, 1956.

ix. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Service tax and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

b. The disputed statutory dues aggregating to Rs.31.11 Lakhs that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of Nature Amount Period to Which Forum where the the Statute of the dues (Rs.in Lakhs) the amount relates dispute is pending

IncomeTax Income 31.11 1987-88 to Supreme Court

Act, 1961 Tax 1993-94 of India

x. The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. In our opinion and according to the information and explanations given to us, adequate documents and records have been maintained in respect of loans granted by the Company on the basis of security by way of pledge of debentures.

xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, Clause 4(xiii) of the Companies (Auditor’s Report) Order 2003 is not applicable to the Company.

xiv. The Company is not dealing in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

xvi. In our opinion, the term loans obtained during the year have been utilised for the purpose for which it was obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short term funds for long term investments.

xviii.During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. In our opinion and according to the information and explanations given to us, the Company has issued Secured Redeemable Non-Convertible debentures amounting to Rs.17,495.75 Lakhs. The Company has created adequate securities and charges in respect of debentures issued during the year.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

4. Further to our comments referred to in Paragraph 3 above, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors and taken on record by the Board of Directors of the Company, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause(g) of sub-section(1) of Section 274 of the Companies Act 1956; and

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

b. In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

c. In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.



For P.N. Raghavendra Rao & Co

Firm Regn. No.:003328S

Chartered Accountants

P R VITTEL

Partner Coimbatore Membership No.18111 26th May 2010