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MAS Financial Services Ltd.

BSE: 540749 Sector: Financials
NSE: MASFIN ISIN Code: INE348L01012
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P/E 25.80
Mkt Cap.(Rs cr) 4,599
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OPEN 856.85
CLOSE 850.30
VOLUME 5450
52-Week high 938.25
52-Week low 469.05
P/E 25.80
Mkt Cap.(Rs cr) 4,599
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MAS Financial Services Ltd. (MASFIN) - Auditors Report

Company auditors report

To the Members of MAS Financial Services Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying Standalone financial statements of MASFinancial Services Limited (‘the Company') which comprise the standaloneBalance Sheet as at March 31 2022 the standalone Statement of Profit and Loss (includingother comprehensive income) the standalone Statement of cash flows and the standaloneStatement of changes in Equity for the year then ended and notes to the Standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information ("the Standalone Financial Statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone financial statements give theinformation required by the Companies Act 2013 (‘the Act') in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (‘Ind AS') and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and its profit total comprehensive income cash flows and the changes in equity for theyear ended on that date.

BASIS FOR OPINION

We conducted our audit of the Standalone financial statements inaccordance with the Standards on Auditing (‘SAs') specified under section143(10) of the Act. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI')together with the ethical requirements that are relevant to our audit of the Standalonefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. Key Audit Matter Auditor's Response
1 Impairment of Loans Principal Audit Procedures
Charge: INR 97.73 Lakhs for the year ended 31st March 2022 Procedures performed by us have been enumerated herein below:
Provision: INR 10019.62 as at 31st March 2022 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.
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 of management judgement and therefore increased levels of audit focus in the Company's estimation of ECLs are: Key aspects of our controls testing involved following: Testing the design and operating effectiveness of the key controls over the completeness and accuracy of the key inputs data and assumptions into the Ind AS 109 impairment models.
Data inputs - The application of ECL model requires several data inputs. This increases the risk of completeness and accuracy of the data that has been used to create assumptions in the model.
Model estimations - Inherently judgmental models are used to estimate ECL which involves determining Probabilities of Default ("PD") Loss Given Default ("LGD") and Exposures at Default ("EAD"). The Testing the ‘Governance Framework' controls over validation implementation and model monitoring in line with Reserve Bank of India guidance.
PD and the LGD are the key drivers of estimation complexity in the ECL and as a result are considered the most significant judgmental aspect of the Company's modelling approach. Testing the design and operating effectiveness of the key controls over the application of the staging criteria.
Economic scenarios – Ind AS 109 requires the Company to measure ECLs on an unbiased forward- looking basis reflecting a range of future economic conditions. Significant management judgement is applied in determining the economic scenarios used and the probability weights applied to them especially when considering the current uncertain economic environment arising from COVID-19. Testing key controls relating to selection and implementation of material macro-economic variables and the controls over the scenario selection and application of probability weights.
Testing management's controls over authorisation and calculation of post model adjustments and management overlays.
Qualitative adjustments – Adjustments to the model- driven ECL results are recorded by management to address known impairment model limitations or emerging trends as well as risks not captured by models. They represent approximately 38% of ECL balances as at 31 March 2022. These adjustments are inherently uncertain and significant management judgement is involved in estimating these amounts especially in relation to economic uncertainty as a result of COVID-19. Testing management's controls on compliance with Ind AS 109 disclosures related to ECL.
Testing key controls operating over the information technology system in relation to loan impairment including system access and system change management program development and computer operations.
Test of Details:
Key aspects of our testing included:
The underlying forecasts and assumptions used in the estimates of impairment loss allowance are subject to uncertainties which are often outside the control of the Company. The extent to which the COVID-19 pandemic will impact the Company's current estimate of impairment loss allowances is dependent on future developments which are highly uncertain at this point. Sample testing over key inputs data and assumptions impacting ECL calculations to assess completeness accuracy and relevance of data and reasonableness of economic forecasts weights and model assumptions applied.
Model calculations testing through re-performance where possible.
Given the size of loan portfolio relative to the balance sheet and the impact of impairment allowance on the standalone financial statements we have considered this as a key audit matter. Test of details of post model adjustments considering the size and complexity of management overlays with a focus on COVID-19 related overlays to assess the reasonableness of the adjustments by challenging key assumptions inspecting the calculation methodology and tracing a sample of the data used back to source data.
Disclosures:
The disclosures regarding the Company's application of Ind AS 109 are key to explaining the key judgements and material inputs to the Ind AS 109 ECL results. Assessing disclosures - We assessed whether the disclosures appropriately disclose and address the uncertainty which exists when determining ECL. In addition we assessed whether the disclosure of the key judgements and assumptions made was sufficiently clear.
2 Information Technology In course of audit our focus was on user access management change management segregation of duties system reconciliation controls and system application controls over key financial accounting and reporting systems. We performed a range of audit procedures which included:
IT Systems and controls
The Company's key financial accounting and reporting processes are highly dependent on the automated controls in information systems such that there exists a risk that gaps in the IT control environment could result in the financial accounting and reporting records being materially misstated.
IT general and application controls are critical to ensure that changes to applications and underlying data are made in an appropriate manner. Adequate controls contribute to mitigating the risk of potential fraud or errors as a result of changes to the applications and data. Review of the report of IS Audit carried in earlier year(s) by an independent firm of Chartered Accountants pertaining to IT systems general controls including access rights over applications operating systems and databases relied upon for financial reporting.
Due to the pervasive nature of role of information technology systems in financial reporting in our 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. Our other processes include:
• selectively recomputing interest calculations and maturity dates;
• Selectively re-evaluating masters updation interface with resultant reports;
• Testing of the system generated reports and accounting entries manually for core financial reporting matters (i.e. verification around the computer system)
• 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
• Other areas that were independently assessed included password policies system configurations system interface controls controls over changes to applications and databases.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS ANDAUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Company's Annual Report but does not include the standalonefinancial statements and our audit reports thereon. The other information is expected tobe made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

When we read the annual report if we conclude that there is a materialmisstatement of this other information we are required to communicate the matter to thosecharged with governance.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these Standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the Ind-AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the Standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

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

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.

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

Identify and assess the risks of material misstatement of theStandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of theStandalone financial statements including the disclosures and whether the Standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 FinancialStatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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 thematters 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept so far as it appears from our examination of those books.

c) The standalone Balance Sheet the standalone Statement of Profit andLoss including Other Comprehensive Income the standalone Cash Flow Statement andstandalone Statement of Changes in Equity dealt with by this report are in agreement withthe books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof section 164(2) of the Act. f) With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B". g) With respect to theother matters to be included in the Auditor's Report in accordance with therequirements of section 197(16) of the Act as amended in our opinion and to the best ofour information and according to the explanations given to us the remuneration paid bythe Company to its directors during the year is in accordance with the provisions ofsection 197 of the Act. h) With respect to the other matters to be included in theAuditor'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 theexplanations given to us: i. The Company has disclosed the impact of pending litigationsas at March 31 2022 on its financial position in its Standalone financial statements. ii.The Company did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii. The Company is not required to transferany amount to the Investor Education and Protection Fund. iv. (a) The management hasrepresented that to the best of its knowledge and belief no funds have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other persons or entities including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend to orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe

Company ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; (b) The management hasrepresented that to the best of its knowledge and belief no funds have been received bythe Company from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and (c) Based on such audit procedures that we haveconsidered reasonable and appropriate in the circumstances nothing has come to our noticethat has caused us to believe that the representations given under (a) and (b) abovecontain any material mis-statement. v. As stated in Note no. 21.2 of the standalonefinancial statements (a) The final dividend proposed in the previous year declared andpaid during the year by the Company is in compliance with section 123 of the CompaniesAct 2013.

(b) The interim dividend declared and paid by the Company during theyear and until the date of this report is in compliance with section 123 of the CompaniesAct 2013.

(c) The Board of Directors of the Company has proposed final dividendfor the year which is subject to the approval of the members in the ensuing Annual GeneralMeeting. The amount of proposed dividend is in accordance with section 123 of theCompanies Act 2013.

ForMUKESH M. SHAH & CO.
Chartered Accountants
Firm Registration No.: 106625W
Chandresh S. Shah
Partner
Place: Ahmedabad Membership No.: 042132
Date: May 4 2022 UDIN: 22042132AIQHLC4714

"Annexure A" to the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended March 312022.

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the Standalone financial statements of the Company and taking intoconsideration the information and explanations given to us we report that:

1. (a) A. The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

B. The Company has maintained proper records showing full particularsof intangible assets.

(b) The Company has a program of physical verification of its PropertyPlant and Equipment so as to cover all the items of Property Plant and Equipment in aphased manner. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogram certain Property Plant and Equipment were physically verified by the Managementduring the year. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification. (c) According to the information andexplanations given to us and based on the examination of the registered sale deed /transfer deed / conveyance deed provided to us we report that the title deedscomprising all the immovable properties of land and buildings which are freehold are heldin the name of the Company as at the balance sheet date. In respect of the immovableproperties taken on lease and disclosed under "Right of use asset" in thefinancial statements the lease agreements are in the name of the Company where theCompany is lessee in the agreement.

(d) According to the information and explanations given to us and therecords examined by us and based on the examination the Company has not revalued any ofits property plant and equipment (including Right of Use assets) and intangible assetsduring the year.

(e) According to the information and explanations given to us and therecords examined by us and based on the examination no proceedings have been initiatedduring the year or are pending against the Company as at March 31 2022 for holding anybenami property under the Benami Transactions (Prohibition) Act 1988 (as amended in 2016)and rules made thereunder. Refer Note 47 to the standalone financial statements.

2. (a) The Company is a non-banking finance company (‘NBFC')and does not hold any inventories. Accordingly reporting under clause 3(ii)(a) of theOrder is not applicable.

(b) During the year the company has availed sanctioned working capitallimit in excess of Rs 5 Crores from banks on the basis of security of current assets.Based on our examination of the records of the Company the quarterly returns/ statementsfiled by the Company with the said bank are materially in agreement with the books ofaccounts maintained by the Company.

3. (a) Since the Company's principal business is to give loans.Accordingly the reporting under clause 3(iii) (a) of the Order is not applicable to it.

(b) In our opinion and according to the information and explanationsgiven to us the investments made guarantees provided security given and the terms andconditions of the grant of all loans and advances in the nature of loans and guaranteesprovided during the year are prima facie not prejudicial to the Company's interest.(c) The Company being a Non-Banking Financial Company (‘NBFC') registeredunder provisions of RBI Act 1934 and rules made thereunder in pursuance of itscompliance with provisions of the said Act/Rules particularly the Income RecognitionAsset Classification and Provisioning Norms monitors repayments of principal and paymentof interest by its borrowers as stipulated. In our opinion and according to theinformation and explanations given to us in respect of loans and advances in the natureof loans the schedule of repayment of principal and payment of interest has beenstipulated and in cases where repayment of principal and payment of interest is notreceived as stipulated the cognizance thereof is taken by the Company in course of itsperiodic regulatory reporting. Refer note 8.1 to the Standalone Financial Statements forsummarised details of such loans/ advances which are not repaid by borrowers as perstipulations. According to the information and explanations given to us reasonable stepsare taken by the Company for recovery thereof.

(d) The Company being a Non-Banking Financial Company(‘NBFC') registered under provisions of RBI Act 1934 and rules madethereunder in pursuance of its compliance with provisions of the said Act/Rulesparticularly the Income Recognition Asset Classification and Provisioning Normsmonitors and report total amount overdue including principal and /or payment of interestby its customers for more than 90 days. In cases where repayment of principal and paymentof interest is not received as stipulated the cognizance thereof is taken by the Companyin course of its periodic regulatory reporting. Refer note 8.1 to the Standalone FinancialStatements for summarised details of such loans/advances which are not repaid by borrowersas per stipulations. According to the information and explanations given to us reasonablesteps are taken by the Company for recovery thereof.

(e) Since the Company's principal business is to give loans thereporting under clause 3(iii)(e) of the Order are not applicable to it.

(f) Based on our audit procedures and the information and explanationmade available to us the Company has not granted any loans or advances in the nature ofloans either repayable on demand or without specifying any terms or period of repayment.

4. According to the information and explanations given to us and on thebasis of examination of the records the Company has not granted any loans madeinvestments or provided guarantees in contravention of the provisions of Section 185 ofthe Act and has complied with the applicable provisions of Section 186 (1) of the Act.

5. The Company has not accepted any deposits within the meaning of theprovisions of section 73 to 76 of the Act or any other relevant provisions of the Act andthe rules framed thereunder. Further according to the information and explanations givento us 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 Tribunalin this regard.

6. The Central Government has not prescribed the maintenance of costrecords under sub-section (1) section 148 of the Act for any of the services rendered bythe Company. Accordingly reporting under clause 3(vi) of the Order is not applicable tothe Company.

7. According to the information and explanations given to us inrespect of statutory dues: (a) The Company has been regular in depositing undisputedstatutory dues including Goods and Services tax Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Duty of Custom Duty of Excise Value addedTax Cess and any other material statutory dues.

(b) There were no material undisputed amounts payable in respect ofGoods and Service Tax Provident Fund Employees' State Insurance Income-taxSales-tax Service tax Duty of Custom Duty of Excise Value added Tax Cess and anyother material statutory dues in arrears as at March 31 2022 for a period of more thansix months from the date they became payable.

(c) Details of dues of Income Tax which have not been deposited as onMarch 31 2022 on account of disputes are given below:

Sr. Name of Statute No. Nature of Dues Amount Rs [ in Lakhs] Period to which the amount relates Forum where dispute is pending
1 Income tax Act 1961 Income Tax DDT 768.57 37.06 AY 2013-2014 Assistant Commissioner of Income Tax
Income Tax DDT 39.10 234.23 AY 2018-2019 Assistant Commissioner of Income Tax

The above demands are on account of non-adjustment of taxes paid asTDS Advance Tax DDT and Self-Assessment Taxes. Hence the same is not shown ascontingent liabilities in the Standalone Financial Statements.

8. In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company there wereno transactions relating to previously unrecorded income that were surrendered ordisclosed as income in the tax assessments under the Income Tax Act 1961 (43 of 1961)during the year.

9. According to the information and explanations given to us and on thebasis of our examination of the books of account we report that (a) The Company has notdefaulted in repayment of loans or borrowings or interest thereon from any financialinstitution banks government or due to debenture holders during the year. (b) TheCompany has not been declared wilful defaulter by any bank or financial institution orother lender. (c) The Company has utilised the money obtained by way of term loans frombanks and other financial institutions during the year for the purposes for which theywere obtained. Unutilised funds are held by the Company in the form of deposits or incurrent accounts till the time of subsequent utilisation.

(d) The funds raised on short term basis have not been utilized for thelong-term purpose.

(e) The Company has not taken any funds from any entity or person onaccount of or to meet the obligations of its subsidiaries.

(f) The Company has not raised any loans during the year on the pledgeof securities held in its subsidiary company.

10. (a) The Company did not raise any money by way of initial publicoffer or further public offer (including debt instruments) and hence reporting underclause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares orconvertible debentures (fully partially or optionally convertible) during the year.Accordingly reporting under clause 3(x)(b) of the Order is not applicable to the Company.

11. (a) To the best of our knowledge and according to the informationand explanations given to us n o fraud by the Company or on the Company has been noticedor reported during the year.

(b) According to the information and explanations given to us noreport under sub-section (12) of section 143 of the Companies Act has been filed by theauditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government during the year. (c) According to the informationand explanations given by management/Audit Committee there were no whistle blowercomplaints received by the Company during the year. 12. The Company is not a Nidhi companyand hence reporting under clause 3(xii) of the Order is not applicable to the Company.

13. According to the information and explanations given to us and basedon our examination of the records of the Company the Company is in compliance withsection 177 and 188 of the Act where applicable for all the transactions with therelated parties and details of such transactions have been disclosed in the Standalonefinancial statements as required by the applicable accounting standards.

14. (a) In our opinion and based on our examination the Company has anadequate internal audit system commensurate with the size and the nature of its business.

(b) We have considered during the course of our audit the reports ofthe internal auditor issued till date for the period under audit in accordance with theguidance provided in SA 610 "Using the work of Internal Auditors".

15. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company and hence provisions ofsection 192 of the Act are not applicable to the Company.

16. According to the information and explanations given to us and basedon the examination of the records of the Company we report that (a) The Company isrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934 andthe Company has obtained the required registration.

(b) The Company has not conducted any Non-Banking Financial or HousingFinance activities without obtaining a valid Certificate of Registration (CoR) from theReserve Bank of India as per the Reserve Bank of India Act 1934.

(c) The Company is not a Core Investment Company (‘CIC') asdefined under the Regulations by the Reserve Bank of India.

(d) As per information provided in course of our audit the group towhich the Company belongs does not have CIC.

17. The Company has not incurred cash losses in the current financialyear and in the immediately preceding financial year.

18. During the year M/s B S R & Co LLP the erstwhile statutoryauditors of the Company have resigned with effect from 25 August 2021 consequent to theamended rules/regulations applicable to the Company. (i.e. vide RBI circular dated April27 2021). As informed there have been no issues objections or concerns raised by thesaid outgoing auditors.

19. On the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.

20. (a) According to the information and explanations given to usthere are no unspent amount in respect of other than ongoing projects that are required tobe transferred to a fund specified in Schedule VII to the Act.

(b) According to the information and explanations given to us and basedon our examination of the records of the Company the Company has transferred the amountremaining unspent in respect of ongoing projects to a Special Account till the date ofour report in compliance with provision of sub section (6) of section 135 of the Act.Relevant disclosures are made in Note 34 (c) of the Standalone financial statement of theCompany.

For MUKESH M. SHAH & CO.
Chartered Accountants
Firm Registration No.: 106625W
Chandresh S. Shah
Partner
Place: Ahmedabad Membership No.: 042132
Date: May 4 2022 UDIN: 22042132AIQHLC4714

"Annexure B" to The Auditors' Report

Report on the Internal Financial Control clause (i) of sub-section 3 ofsection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of MAS Financial Service Limited ("the Company") as of March31 2022 in conjunction with our audit of the Standalone financial statements of theCompany for the year ended on that date.

MANAGEMENT RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing andmaintaining internal financial control based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India["ICAI"]. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting ("the Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.Ourauditinvolvesperformingprocedurestoobtainauditevidence about the adequacy of theinternal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the materialmisstatement of the Standalone financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlover financial reporting includes those policies and procedures that: 1. pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; 2. provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and 3. provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2022 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

ForMUKESH M. SHAH & CO.
Chartered Accountants
Firm Reg. No. : 106625W
Chandresh S. Shah
Partner
Place: Ahmedabad Membership No.: 042132
Date: May 4 2022 UDIN: 22042132AIQHLC4714

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