MAS Financial Services Limited BASIS FOR OPINION
Report on the Audit of the Standalone Financial Statements OPINION
We have audited the accompanying Standalone Financial Statements of MAS Financial Services Limited ('the Company'), which comprise the standalone Balance Sheet as at March 31, 2026, the standalone Statement of Profit and Loss (including Other Comprehensive Income), the standalone Statement of cash flows and the standalone Statement of Changes in Equity for the year then ended, and notes to the Standalone Financial Statements, including material accounting policies and other explanatory information ("the Standalone Financial Statements").
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 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, 2026, and its profit, total comprehensive income, cash flows and the changes in equity for the year then ended.
We conducted our audit of the Standalone Financial Statements 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 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current year. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and in forming our opinion thereon, 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.
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Sr.
No.
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Key Audit Matters
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Auditor's Response
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1
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Impairment of Loans:
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Principal Audit Procedures
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Charge: INR 44.58 Crore for the year ended March 31,2026
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Procedures performed by us have been enumerated herein
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Provision: INR 214.30 Crore as at March 31,2026
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below:
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Under Ind AS 109, Financial Instruments, allowance for loan losses is determined using expected credit loss ('ECL') estimation model. The estimation of ECL on financial instruments involves significant judgement and estimates. The key areas where we identified greater levels
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We performed end to end process walkthroughs to identify the key systems, applications and controls used in ECL processes. We tested the relevant manual (including spreadsheet controls), general IT and application controls over key systems used in ECL process.
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of management judgement and therefore increased levels
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Key aspects of our controls testing involved following:
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of audit focus in the Company's estimation of ECLs are:
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• Testing the design and operating effectiveness of the
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• Data inputs - The application of ECL model requires several data inputs. This increases the risk of
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key controls over the completeness and accuracy of the key inputs, data and assumptions into the Ind AS
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completeness and accuracy of the data that has
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109 impairment models.
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been used to create assumptions in the model.
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• Testing the 'Governance Framework' controls over
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• Model estimations - Inherently judgmental models are used to estimate ECL which involves
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validation, implementation and model monitoring in line with Reserve Bank of India guidance.
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determining Probabilities of Default ("PD"), Loss
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• Testing the design and operating effectiveness of
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Given Default ("LGD"), and Exposures at Default
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the key controls over the application of the staging criteria.
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Sr.
No.
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Key Audit Matters
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Auditor's Response
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("EAD"). The PD and the LGD are the key drivers
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• Testing key controls relating to selection and
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of estimation complexity in the ECL and as
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implementation of material macro-economic
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a result are considered the most significant
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variables and the controls over the scenario selection
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judgmental aspect of the Company's modelling
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and application of probability weights.
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approach.
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• Testing management's controls over authorisation
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• Economic scenarios - Ind AS 109 requires the
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and calculation of post model adjustments and
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Company to measure ECLs on an unbiased
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management overlays.
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forward-looking basis reflecting a range of future
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• Testing management's controls on compliance with
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economic conditions. Significant management judgement is applied in determining the economic
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Ind AS 109 disclosures related to ECL.
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scenarios used and the probability weights applied
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• Testing key controls operating over the information
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to them especially when considering the current
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technology system in relation to loan impairment
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uncertain economic environment.
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including system access and system change management, program development and computer
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• Qualitative adjustments - Adjustments to the model-driven ECL results are recorded by management to address known impairment
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operations.
Test of details:
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model limitations or emerging trends as
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Key aspects of our testing included:
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well as risks not captured by models. They
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• Sample testing over key inputs, data and assumptions
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represent approximately 8.21% of ECL balances
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impacting ECL calculations to assess completeness,
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as at March 31, 2026. These adjustments
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accuracy and relevance of data and reasonableness of
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are inherently uncertain and significant
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economic forecasts, weights, and model assumptions
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management judgement is involved considering
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applied.
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internal assessment of emerging forward looking
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economic factors and related uncertainties. The
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• Model calculations testing through re-performance,
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underlying forecasts and assumptions used in
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where possible.
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the estimates of impairment loss allowance are
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• Test of details of post model adjustments, considering
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subject to uncertainties which are often outside
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the size and complexity of management overlays,
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the control of the Company. Given the size of
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to assess the reasonableness of the adjustments
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loan portfolio relative to the balance sheet
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by challenging key assumptions, inspecting the
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and the impact of impairment allowance on
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calculation methodology and tracing a sample of the
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the Standalone Financial Statements, we have considered this as a key audit matter.
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data used back to source data.
Assessing disclosures - We assessed whether the
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Disclosures:
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disclosures appropriately disclose and address the
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The disclosures regarding the Company's application
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uncertainty which exists when determining ECL. In
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of Ind AS 109 are key to explaining the key judgements
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addition, we assessed whether the disclosure of the key
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and material inputs to the Ind AS 109 ECL results.
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judgements and assumptions made was sufficiently clear.
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2
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Information Technology:
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In course of audit, our focus was on user access
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IT Systems and controls
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management, change management, segregation of duties, system reconciliation controls and system application
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The Company's key financial accounting and reporting
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controls over key financial accounting and reporting
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processes are highly dependent on the automated
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systems. We performed a range of audit procedures, which
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controls in information systems, such that there exists a risk that gaps in the IT control environment could
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included:
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result in the financial accounting and reporting records
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• Review of the report of IS Audit carried during the
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being materially misstated.
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year by an independent firm pertaining to IT systems general controls including access rights over
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IT general and application controls are critical to ensure
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applications, operating systems and databases relied
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that changes to applications and underlying data are made in an appropriate manner. Adequate controls
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upon for financial reporting.
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contribute to mitigating the risk of potential fraud or
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• Our other processes include:
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errors as a result of changes to the applications and data.
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o selectively recomputing interest calculations and maturity dates
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Sr. Key Audit Matters No.
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Auditor's Response
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Due to the pervasive nature of role of information
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o
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Selectively re-evaluating masters update,
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technology systems in financial reporting, in our
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interface with resultant reports.
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preliminary risk assessment, we planned our audit by assessing the risk of a material misstatement arising from the technology as significant for the audit, hence the Key Audit Matter.
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o
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Testing of the system generated reports and accounting entries manually for core financial reporting matters (i.e. verification around the computer system).
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o
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Evaluating the design, implementation and operating effectiveness of the significant accounts-related IT automated controls which are relevant to the accuracy of system calculation, and the consistency of data transmission.
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Other
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areas that were independently assessed included
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password policies, system configurations, system interface controls, controls over changes to applications and databases.
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INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the Standalone Financial Statements and our audit reports thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the 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.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
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 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 Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the 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 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 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone 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
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income, the standalone Cash Flow Statement and standalone Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rule, 2014.
e) On the basis of the written representations received from the directors as on March 31,2026, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2026, 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". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting
g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. t he Company has disclosed the impact of pending litigations as at March 31, 2026, on its financial position in its Standalone 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 have been no amounts required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to 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
conducted by us, nothing has come to our notice that has caused us to believe that the representations under sub
clause (a) and (b) above, contain any material misstatements.
v. As stated in Note no. 21.2 of the Standalone Financial Statements
Ý The final dividend proposed in the
previous year, declared and paid
during the year by the Company is in compliance with section 123 of the Act.
Ý The interim dividend declared and paid by the Company during the year and until the date of this report is in compliance with section 123 of the Act.
Ý The Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members in the ensuing Annual General Meeting. The amount of proposed dividend is in accordance with section 123 of the Act.
vi. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its books of account for the financial year ended March 31, 2026 which have the feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software systems.
Further, during the course of our audit we did not come across any instance of the 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 Sorab S. Engineer & Co.
Chartered Accountants Firm's Registration No. 110417W
CA. Chokshi Shreyas B.
Partner
Ahmedabad Membership No. 100892
April 29, 2026 UDIN: 26100892JEJDCT6785
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