Mahindra & Mahindra Financial Services Ltd Auditor Reports

To the Members of

Mahindra & Mahindra Financial Services Limited

Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of Mahindra & Mahindra

Financial Services Limited (‘the Company), which comprise the Standalone Balance Sheet as at 31^st March 2025, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flow and the Standalone Statement of Changes in Equity for the year then ended, and notes to the Standalone financial statements, including a summary of the material accounting policies and other explanatory information (hereinafter referred to as the ‘Standalone Financial Statements).

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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 (‘Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, the relevant circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time (‘RBI Guidelines) and other accounting principles generally accepted in

India, of the state of affairs of the Company as at 31^st March 2025, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the

Standards on Auditing specified under section

143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone 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 Standalone Financial Statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements for the financial year ended 31^st March 2025. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. 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
Impairment of loans and advances to customers
(Refer Note 2.5 (ii) for material accounting policies and Note 49.2 for credit risk disclosures)
As at 31st March 2025, the Company has reported gross loan assets of 1,19,673.02 crore against which an impairment loss of 3,459 crore has been recorded. The Company recognized impairment provision for loan assets based on the Expected Credit Loss ("ECL") approach laid down under ‘Ind AS 109 – Financial Instruments.	Our audit included assessing the appropriateness of managements judgment and estimates used in the impairment analysis through procedures that included, but were not limited to, the following:
The estimation of ECL on financial instruments involves significant management judgement and estimates and the use of different modelling techniques and assumptions which could have a material impact on reported profits. Significant management judgement and assumptions involved in measuring ECL is required with respect to:	• Obtained an understanding of the modelling techniques adopted by the Company including the key inputs and assumptions;
• ensuring completeness and accuracy of the data used to create assumptions in the model.	• Considered the Companys accounting policies for estimation of Expected Credit Loss on loans and assessing compliance with the policies in terms of Ind AS 109;
• determining the criteria for a significant increase in credit risk.	• Obtained an understanding of the managements updated processes, systems and controls implemented in relation to impairment allowance process.
• factoring in future economic assumptions techniques used to determine probability of default, loss given default and exposure at default.	• Accuracy of the computation of the ECL estimate including reasonableness of the methodology and assumption used to determine macro- economic overlays;
These parameters are derived from the Companys internally developed statistical models and other historical data.	• Tested the design and operating effectiveness of key controls over completeness and accuracy of the key inputs and assumptions considered for calculation, recording, monitoring of the impairment loss recognized and staging of assets;
Disclosure	• Assessed the critical assumptions and input data used in the estimation of Expected Credit Loss models for specific key credit risk parameters, such as the movement logic between stages,
The disclosures regarding the Companys application of Ind AS 109 are key to explaining the key judgements and material inputs to the	Exposure at default (EAD), probability of default (PD) or loss given default (LGD);
ECL results. Further, disclosures to be provided as per RBI circulars with regards to Non-Performing Assets and provisions is also an area of focus.	• Evaluated the reports and working for the methodology used in the computation of Through The Cycle PD, Point In Time PD and LGD, among others;
Considering the significance of the above matter to the overall financial statements and extent of managements estimates and judgements involved, it required significant auditor attention. Accordingly, we have identified this as a key audit matter.	• Performed test of details over calculation of ECL, in relation to the completeness and accuracy of the data;
	• Obtained written representations from management and those charged with governance on whether they believe significant assumptions used in calculation of expected credit losses are reasonable;
	• Assessed the appropriateness and adequacy of the related presentation and disclosures of Note 49 "Financial risk management" disclosed in the accompanying financial statements in accordance with the applicable accounting standards and related RBI circulars and Resolution Framework.

 

Information Technology and General Controls
The Company is highly dependent upon its Information Technology (IT) systems for carrying out its operationsandowingtothesignificant volume of transactions that are processed daily basis as part of the operations, which impacts key financial accounting and reporting. The company has put in place the IT General Controls and application controls to ensure that the information produced by the Company is complete, accurate and reliable. Among other things, the Management also uses the information produced by the entitys	Our audit procedures for assessment of the IT systems and controls over financial reporting, which includes carrying out the key audit procedures, but were not limited to the following:
IT systems for accounting and preparation and the presentation of the of the financial statements. Since our audit strategy included focus on entitys key IT systems relevant to our audit due to their potential pervasive impact on the financial statements, we have determined the use of IT systems and related control environment for accounting and financial reporting as a key audit matter.	• Obtained an understanding of the Companys key
	IT systems, IT General Controls which covered access controls, program/ system changes, program development and computer operations i.e., job processing, data/ system backup and incident management and application controls relevant to our audit.
	• Tested the design, implementation and operating effectiveness of the general IT controls over the key IT systems that are critical to financial reporting. This included evaluation of entitys controls to ensure segregation of duties and access rights being provisioned / modified based on duly approved requests, access for exit cases being revoked in a timely manner and access of all users being re-certified during the period of audit.
	• Tested application controls (automated controls), related interfaces and report logic for system generated reports relevant to the audit of loans, expenses, payroll, borrowings and investment among others, for evaluating completeness and accuracy and;
	• Tested compensating controls or performed alternate procedures to assess whether there were any unaddressed IT risks that would impact the controls or completeness and accuracy of data.
	• We have also relied on IS and other technology audits conducted during the year.
	• We have obtained management representations wherever considered necessary.

Information other than the Financial Statements and Auditors Report thereon

6. The Companys Board of Directors is responsible for the preparation of other information. This other information comprises the information included in the Boards Report (including annexures thereto) and Management Discussion and Analysis ("MD&A")

(collectively referred to as "Other Information"), but does not include the Standalone Financial

Statements and our Auditors Report thereon. The

Other Information is expected to be made available to us after the date of this Auditors Report.

Our opinion on the Standalone performanceFinancial 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 Standalone 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 Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the Other Information, if we conclude that there is a material misstatement for ensuring the accuracy therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those

Charged with Governance for the Standalone Financial Statements

8. The accompanying Standalone Financial Statements have been approved by the Companys Board of Directors. The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the including financial position, financial other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the

Act, RBI Guidelines and other accounting principles generally accepted in India. Thisresponsibility 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 judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

9. In preparing the Standalone Financial Statements, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors Responsibilities for the Audit of the Standalone Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 on Auditing 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 Standalone Financial Statements.

12. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal financial 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 system with reference to Standalone Financial Statements in place and the operating effectiveness of such controls based on our audit;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors;

• Conclude on the appropriateness of Board of Directors and managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone 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 auditors 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 Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation; and

• Obtain sufficient appropriate audit evidence regarding the Standalone Financial Statements of the Company to express an opinion on the Standalone Financial Statements.

13. 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.

14. 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.

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

Other Matter

16. These Standalone Financial Statementsinclude the figures for the year ended 31^st March 2024 which were audited by predecessor auditors who expressed an unmodified opinion as relevant on those Standalone Financial Statements vide their audit report dated 04^th May 2024. Our opinion on the Standalone Financial Statements is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

17. As required by Section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its Directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

18. As required by the Companies (Auditors 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 I, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

19. Further to our comments in Annexure I, as required by Section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying Standalone Financial Statements;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in paragraph 17(g)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended) ("the Rules");

c) the Standalone Financial Statements dealt with by this report are in agreement with the books of account;

d) in our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, none of the

Directors is disqualified as on 31 ^st March 2025 from being appointed as a Director in terms of section 164(2) of the Act;

f) with respect to the adequacy of the internal financial controls with referenceto Standalone financial statements of the Company as on 31 ^st March 2025 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and

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

i. The Company, as detailedin Note 43 to the Standalone Financial Statements, has disclosed the impact of pending litigations on its financial position as at

31^st March 2025;

ii. The Company, as detailedin Note 47 to the Standalone Financial Statements, has made provision as at 31^st March 2025, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31^st

March 2025. The Company, as detailed in Note 18 to the Standalone Financial Statements, has regularly transferred the required amounts to the Investor Education and Protection Fund;

iv. a. The managementhas represented that, to the best of its knowledge and belief, as disclosed in Note 36 (vi) to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (‘the 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 (‘the

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

b. The managementhas represented that, to the best of its knowledge and belief, as disclosed in Note 36 (vi), to the Standalone Financial Statements no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the 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 identifiedin any manner whatsoever by or on behalf of the Funding

Party (‘Ultimate Beneficiaries)or provide any guarantee, security or the like on behalf of the Ultimate

Beneficiaries; and c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. Thefinal dividend proposedin the previous year, declared and paid by the Company during the year in accordance with the provision of section 123 of the Act; and

vi. Based on our examination, which included test checks, the Company has used various accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility, which have operated throughout the year for all relevant transactions recorded in the software, except in respect of customer masters in two accounting software wherein earlier value is not retained, databases maintained in two accounting software where the audit trail feature was not enabled for part of the year and five accounting software where the audit trail feature at the database level (DML logs) was not enabled throughout the year to log any direct data changes. Based on our procedures performed, we did not notice any instance of the audit trail feature being tampered with. In respect of the aforesaid masters and databases, in the absence of audit trail for the said period, the question of our commenting on whether the audit trail was tampered with, does not arise. Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention.

Annexure I

referred to in Paragraph 16 of the Independent Auditors Report of even date to the members of Mahindra & Mahindra Financial Services Limited on the Standalone Financial Statements for the year ended 31^st March 2025

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

i. a. (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of Right-Of-Use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

b. During the year, the management has carried out physical verificationof all the Property,

Plant and Equipment. In our opinion, the frequency of verificationis reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deed of the immovable property disclosed in the financial statements included under PPE are held in the name of the Company.

d. The Company has not revalued any of its

Property, Plant and Equipment (including Right- Of- Use assets) and intangible assets during the year and hence reporting under clause 3(i)(d) of the Order is not applicable to the Company.

e. According to the information and explanations given to us, no proceedings have been initiated during the year or are pending against the Company as at 31^st March 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable to the Company.

ii. a. The Company is engaged in providing financial services primarily into non-banking financial services (NBFC). Accordingly, it does not hold any inventory and hence reporting under clause 3(ii)(a) of the Order is not applicable to the Company.

b. The Company has a working capital limit in excess of 5 crore sanctioned by banks and financial institutions, in aggregate based on the security of loans (assets). We have observed reconciliation items in the quarterly returns/statements, in respect of the working capital limits have been filed by the Company with such banks and financial institutions as compare to the books of accounts maintained by the Company. However, we have not carried out a specificaudit of such statements. The details of such difference /reconciliation items are given in Note 17 of the standalone financial statements of the Company.

iii. a. The Company is a Non-Banking Finance

Company and its principal business is to give loans. Accordingly, reporting under clause 3(iii)(a) of the Order is not applicable to the Company.

b. The investments made, guaranteeprovided, security given and terms and conditions of the grant of all loans and advances in the nature of loans are not, prima facie, prejudicial to the Companys interest.

c. The Company is a Non-Banking Financial Company (‘NBFC), registered under provisions of the Reserve Bank of India Act, 1934 and rules made thereunder and is regulated by various regulations, circulars and norms issued by the Reserve Bank of India including Master Circular – Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances. In respect of loans and advances in the nature of loans granted by the Company, we report that the schedule of repayment of principal and payment of interest has been stipulated and the repayments/receipts of principal and interest are regular except for certain instances as below:

Overdue amount as on 31st March 2025
Particulars –	Total amount due
Days past due	(in crore)
1-30 days	435.98
31-90 days	743.42
More than 90 days	1,789.95
Total	2,969.35

d. According to the information and explanations given to us, the total amount which is overdue for more than 90 days in respect of loans and advances in the nature of loans given in the course of the business operations of the Company aggregates to 1,789.95 Crore as at 31^st March 2025 in respect of 1,17,623 number of loans. Further, reasonable steps as per the policies and procedures of the Company have been taken for recovery of such principal and interest amounts overdue.

e. The Company is a Non-Banking Finance Company, and its principal business is to give loans. Accordingly, reporting under clause 3(iii)(e) of the Order is not applicable to the Company.

f. The Company hasnot granted any loans or advances in the nature of loans which are repayable on demand (except for the short-term loan) or without specifying any terms or period of repayment during the year. Accordingly, reporting under clause 3(iii)(f) of the Order is not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has not granted any loans, made investments or provided guarantees or securities to the parties that are covered under the provisions of sections 185 or 186 of the Companies Act, 2013, and hence reporting under clause 3(iv) of the Order is not applicable.

v. In our Opinion, the Company had complied with the directive issued by the Reserve Bank of India (‘the RBI) with regards to the deposits accepted and amounts deemed to be deposits during the year. According to the information and explanation given to us, the provisions of sections 73 to 76 and any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended), are not applicable to the Company being an non-banking financial company registered with the RBI. We are informed by the management that no order has been passed by the Company Law Tribunal or RBI or any Court or any other Tribunal against the Company in this regard.

vi. The Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Companys products/business activity. Accordingly, reporting under clause 3(vi) of the Order is not applicable.

vii. a. In our opinion, and according to the information and explanations given to us, undisputed statutory dues including Goods and Services tax, Provident Fund, Employees State Insurance, Income-tax, Cess and other material statutory dues, as applicable, have been regularly deposited with the appropriate authorities by the Company. As explained to us, the Company does not have any dues on account of Sales Tax, Service Tax, Duty of Customs, Duty of Excise and Value Added Tax.

The following undisputed amountspayable in respect of Provident Fund are in arrears as at 31^st March 2025, for a period of more than six months from the date they became payable:

Name of the Statute	Nature of the Dues	Amount due in	Period to which the amount relates	Due Date	Date of payment (if paid)	Remarks
Provident Fund	PF Contribution	14,85,672	April 2022 – September 2024	Various due dates	-	Due to pending Aadhar Seeding of employees

b. According to the information and explanations given to us, there are no statutory dues referred in subclause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute	Nature of dues	Amount (Rs in crore)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax	435.51	FY 2013-14; 2016-17; 2017-18; 2018-19	Commissioner of Income Tax (Appeals)
VAT – Andhra Pradesh	Value Added Tax	1.24	FY 2008-09 to FY 2013-14	Andhra Pradesh High Court

 

Name of the statute	Nature of dues	Amount (Rs in crore)	Period to which the amount relates	Forum where dispute is pending
VAT – Madhya Pradesh	Value Added Tax	0.07	FY 2013-14 to FY 2016-17	Appellate Authority of Commercial Taxes, Bhopal
VAT – Maharashtra	Value Added Tax	7.5	FY 2010-11; FY 2012-13 to FY 2015-16	Maharashtra Sales Tax Tribunal
VAT – Maharashtra	Value Added Tax	0.45	FY 2011-12	Deputy Commissioner of Sales Tax (Appeals)
Service Tax	Service Tax	93.66	FY 2007-08 to FY 2014-15	Customs, Excise & Service Tax Appellate Tribunal
GST – Uttar Pradesh	Goods & Services Tax	22.82	FY 2017-18 to FY 2019-20	Allahabad High Court, Lucknow Bench
GST – Maharashtra	Goods & Services Tax	0.85	FY 2017-18	Joint Commissioner of State Tax, Maharashtra

viii. According to the information and explanations given to us and as verified by us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961), which have not been recorded in the books of accounts.

ix. a. According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or other borrowings or in the payment of interest thereon to any lender during the year.

b. According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or financial institution or other lender or government or any government authority.

c. In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained, though idle/surplus funds which were not required for immediate utilisation have been invested in readily realisable liquid investments.

d. In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the

Company, funds raised by the Company on short term basis have not been utilised for long term purposes.

e. According to the information and explanations given to us and on an overall examination of the standalone financial statements of the

Company, the Company has not taken any funds from any entity or person on accounts of or to meet the obligation of its subsidiaries, joint ventures or associate.

f. According to the information and explanations given to us and as verified by us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate.

x. a. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

b. According to the information and explanation given to us and as verified by us, the Company has utilized funds raised by way of private placement of debentures for the purpose for which they were raised and there was no preferential allotment or private placement of shares during the year.

xi. a. To the best of our knowledge according to the information and explanations given to us and as verified by us, no fraud by the

Company has been noticed or reported during the year. Accordingly, to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit except for misappropriation cash by its employees or cheating and forgery of documents by its employees or by the customers of the Company identified by the management during the year, involving amounts aggregating to 6.33 Crore as mentioned in Note 42 of the accompanying standalone financial statements. The Company has initiated necessary action against the employees and customers connected to such instances including of their employment contracts and recovery of the amounts.

b. To the best of our knowledge, report under subsection (12) of section 143 of the Companies Act has been filed by the predecessor Joint Statutory Auditor in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government on 12^th June 2024.

c. We have taken into consideration the whistle blower complaints received by the Company during the year and provided to us, determining the nature, timing and extent of audit procedures.

xii. TheCompany is not a Nidhi Company and the Nidhi

Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of the Act and all details have been disclosed in the standalone financial statements, as required under

Indian Accounting Standard (Ind AS) 24, Related

Party Disclosures specified in Companies (Indian

Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

xiv. a. In our opinion and according to the information and explanations given to us, the Company has an internal audit system as required under section 138 of the Act which is commensurate with the size and the nature of its business.

b. We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

xv. According to the information and explanation given to us, and based on our examination of the records, the Company has not entered into any non-cash transactions with its Directors or persons connected with them and accordingly, provisions of section 192 of the Act are not applicable to the Company.

xvi. a. The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and such registration has been obtained by the Company.

b. During the year, the Company has not conducted any Non - Banking Financial activities without a valid Certificate of Registration (CoR) from the RBI as per the Reserve Bank of India Act, 1934. Further, Company has not conducted any Housing Finance activities and is not required to obtain CoR for such activities from the RBI.

c. According to the information and explanations given to us, the Company is not a Core

Investment Company (CIC) as defined in the regulations made by the RBI. Accordingly, reporting under clause 3(xvi)(c) of the Order is not applicable to the Company.

d. Based on the information and explanations given to us and as represented by the management of the Company, the Group

(as defined in Core Investment Companies

(Reserve Bank) Directions, 2016) has 4 CICs forming part of the group.

xvii. The Companyhas not incurred any cash loss in the current as well as the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management, we are of the opinion that no material uncertainty exists as on the date of the audit report that Company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. Company has fully spent the required amount towards Corporate Social Responsibility (CSR) and there is no unspent CSR amount for the year requiring a transfer to a Fund specified in Schedule VII to the Companies

Act or special account in compliance with the provision of sub-section (6) of section 135 of the said Act. Accordingly, reporting under clause 3(xx) of the Order is not applicable for the year.

xxi. The reporting under clause 3(xxi) is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

Annexure II

To the Independent Auditors Report of even date to the members of Mahindra & Mahindra Financial Services Limited on the Standalone Financial Statements for the year ended 31^st March 2025 Independent Auditors Report on the internal financial controls with Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act) (Referred to in paragraph 17(f) under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

1. In conjunction with our audit of the standalone financial statements of Mahindra & Mahindra Financial Services Limited (‘the Company) as at and for the year ended 31^st March 2025, we have audited the internal financial controls with reference to standalone financial statements the Company as at that date.

Board of Directors Responsibilities for Internal Financial Controls

2. The Companys Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note) issued by the Institute of

Chartered Accountants of India (‘ICAI). responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the

Companys business, including adherence to the Companys 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 Act.

Auditors Responsibility for the Audit of the Internal Financial Controls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial reference to standalone financial based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial standalone financial statements, and the Guidance Note 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 with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditors These judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

6. A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone controls financial statements with for external purposes in accordance with generallystatements accepted accounting principles. A companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in controlswithreferenceto reasonable detail, accurately and fairly reflect dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and Directors of the Company; to the Standalone Financial and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements as

7. Because of the inherent limitations of internal financialcontrols with reference to standalone financial statements, 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 the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and at such controls were operating effectively 31^st March 2025, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For M M Nissim & Co LLP	For M. P. Chitale & Co.
Chartered Accountants	Chartered Accountants
Firm Regn. No. 107122W/W100672	Firm Regn. No.101851W
	Ashutosh Pednekar
Sanjay Khemani	Partner
Partner	Membership No.: 041037
Membership No.: 044577	UDIN: 25041037BMLWNS7695
UDIN: 25044577BMOBDL4882	Place: Mumbai
Place: Mumbai	Date: 22nd April 2025
Date: 22nd April 2025