manipal finance corporation ltd Auditors report

TO THE MEMBERS OF

MANIPAL FINANCE CORPORATION LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the accompanying financial statements of MANIPAL FINANCE CORPORATION LIMITED (CIN: L65910KA1984PLC005988) (“the Company”), which comprises the Balance Sheet as at 31st March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis of Qualified Opinion paragraph, the aforesaid Financial Statements give the information required by the Companies Act, 2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the loss and total comprehensive income and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No.28.01 of the financial statements. The Company has incurred losses and its majority of funds are blocked in Non Performing Assets, raising a doubt about the Company to continue as a going concern. The Company has presented a scheme of arrangement for restructure of liabilities as detailed in Note 14.01 of the financial statements and subsequently withdrawn the same, for reasons given therein. The account, however have been prepared on a “going concern basis” in view of management perception as detailed in Note No.28.01 as aforesaid. In this connection, we are unable to comment on the ultimate realisability of the Companys assets including Property, Plant & Equipment under lease. Accordingly, we are also unable to comment on the Companys ability to settle its liabilities.

We conducted our audit of the Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Companies Act, 2013 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 on the Financial Statements.

Emphasis of Matter

We draw attention to Note 28.27 of the Financial Statements. The Company has earned Profit during the immediate previous financial year i.e. year ending 31st March 2022 due to Exceptional income as disclosed in Note 27. Our opinion is not modified in this matter.

During the immediately preceding financial year viz. on 31st March 2022, the Company has remitted to the credit of Investors Education and Protection Fund, all the unclaimed matured debentures and unclaimed matured subordinated debts with interest till maturity as detailed in the aforesaid note, with the exception of the amount involved in disputed cases (disputed before appropriate legal forum). The Company has disclosed such disputed sum as “Other financial liabilities” in the audited statement of assets and liabilities, with interest accrued till maturity. Our opinion Is not modified in this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the ‘Basis for Qualified Opinion and ‘Emphasis of Matter section, we have determined that there are no other key audit matters to communicate in our report.

Other Information (other than the Financial Statements and Auditors Report thereon)

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report, Corporate Governance Report (including shareholders information) and Schedule to Balance Sheet of a Non-Banking Financial Company (as required in terms of Paragraph 9BB of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998) but does not include the financial statements and our auditors report thereon. The above information is expected to be made available to us after the date of this auditors report. Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

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

When we read the Boards Report including Annexures to Boards Report, the Corporate Governance Report (including shareholders information) and Schedule to Balance Sheet of a Non-Banking Financial Company (as required in terms of Paragraph 9BB of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998), if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibility of Management for the Financial Statements

The Companys Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is 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 intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

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

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

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls 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 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 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 Financial Statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal 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 the 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 financial statements of the current period 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by the Master Direction DNBS PPD.03/66.15.001/2016-17 dated 29.09.2016 (RBI/DNBS/2016-17/48) issued by the Reserve Bank of India, Department of Non-Banking Supervision Central Office we will be giving a statement of matters specified in paragraph 3(A) & 3(B) of the order at a later date.

3. In terms of press release issued by Reserve Bank of India dated 27.06.2001, we state that:

a) The Certificate of Registration as issued by the Reserve Bank of India is not in force, since same was cancelled during December 2004.

b) The Company has not obtained credit rating.

c) The capital adequacy ratio is negative and accordingly the Companys loans, advances and investments are above the credit exposure limits.

d) The Company has not filed the prudential returns and annual returns as per revised directives. However, the Company has filed such returns as per the directives as prevailed till 31st March 2011 i.e. prudential returns on half yearly basis and annual return once a year.

e) The public deposits have been fully repaid by the Company during the previous year ending 31st March 2022. The Company has not accepted/renewed any deposits during the current year.

f) The Company does not have any outstanding deposits as on 31st March 2023 and accordingly the question of creating floating charge in favor of the depositors, on the statutory liquid assets invested does not arise.

g) The Company has not closed any of its branches during the year. Therefore, the question of making any comments therein does not arise.

4. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

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

(e) Our Qualifications as given under paragraph titled “Basis for qualified opinion" may have adverse effect on the functioning of the Company, if the management perception as detailed in Note 28.01 of financial statement does not materialize. However, our observation as given under paragraph titled “Emphasis of matter” will not have adverse effect on the functioning of the Company.

(f) The qualification/observations relating to the maintenance of accounts and other matters connected therewith are as stated in the “Basis for Qualified Opinion paragraph”, and “Emphasis of Matter paragraph” above.

(g) The Management of the Company is of the opinion that its directors are not disqualified u/s 164(2) of the Companies Act, 2013 as on 31st March 2023 for the reasons as stated in Note 28.11 of the financial statements. Accordingly, the directors have given the written representations as on 31st March 2023 that they are not disqualified to be the directors of the Company u/s 164(2) of the Companies Act, 2013, which has been taken on record by the Board of Directors. Accordingly, we are of the opinion that none of the directors of the Company disqualified as on 31st March 2023 from being appointed as directors in terms of Section 164(2) of the Companies Act, 2013.

(h) 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 a qualified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

(i) With respect to the other matters to be included in Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

The Company has not paid any managerial remuneration to its directors, other than sitting fees. In our opinion and to the best of our information and according to the explanations given to us, the remuneration (i.e. sitting fees) so paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

(j) 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 has stated vide 28.10 and 28.28 of the financial statement that the impact of pending litigations on its financial position is not ascertainable for the reasons as stated in the aforesaid notes.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses, which has been confirmed by the management vide Note 28.29 of the financial statement.

iii. The Company has transferred unclaimed amounts of debentures and subordinated debts with interest upto maturity to the investor education and protection fund on 29th March, 2022 as given in Note 14 read with sub notes thereon. iv.

A) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or b) provide any guarantee, security or the like to or 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 a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or b) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and

C) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv)(A) and ((iv)(B) contain any material misstatement. v. The Company has not declared or paid any dividend during the year. Therefore, commenting on compliance of Sec 123 of the Act does not arise.

ANNEXURE “A” TO INDEPENDENT AUDITORS REPORT

(Issued to the Members of MANIPAL FINANCE CORPORATION LIMITED) REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING“REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF EVEN DATE

i. (a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets i.e. Property, Plant and Equipment and Investment Property.

(B) The Company does not have intangible assets. Accordingly, paragraph 3(i)(a)(B) of the Order is not applicable.

(b) We draw attention to Note 28.14 of the financial statements. According to the information and explanations given to us the fixed assets i.e. Property, Plant and Equipment other than those under lease and Investment Property, have been physically verified by the management during the period and no material discrepancies were noticed on such verification as compared to available records. In respect of leased assets physical verification has not been done during the year.

(c) According to the information given to us and on the basis of our examination, all title deeds of free hold immovable properties are held in the name of the company except the following:

Description of property	Gross carrying Value	Held in name of	Whether promoter, director or their relative or employee	Period held indicate range, where appropriate	Reason for not being held in name of company
Property, Plant and Equipment Land & Building	INR 2,060.90 thousands	Mr Teofilo Eufemiano Xavier Da Cruz Pinto	No	28th September, 1995	As disclosed by Management vide Note 28.16

The title deeds of lease hold immovable properties are supported by Memorandum of agreement entered into with the lessor. We are informed that the original title deeds in respect of immovable properties of land and buildings (both freehold and lease hold), whose title deeds have been pledged as security for debentures, are lying with the Debenture Trustee, as evidenced by the records produced before us and accordingly, we have given our report as above, based on the examination of copies of the above said documents.

(d) According to the information and explanations given to us, the Company has not revalued its Property, Plant and Equipment during the year. The Company does not have intangible assets.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii (a) According to the information and explanations given to us, the inventories which consist of shares and securities have been physically verified by the management during the year at reasonable intervals. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(b) According to the information and explanations given to us, the Company has not been sanctioned working capital limits in excess of five crore rupees from banks on the basis of security of loans during the year. Accordingly, paragraph 3(ii)(b) of the Order is not applicable.

iii During the year the Company has not made investments, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties. Accordingly, Paragraph 3(iii) of the Order is not applicable.

iv According to the information and explanations given to us, the Company has not given loans, made any investments or provided any guarantee or security during the year under audit. Accordingly, the question of reporting on compliance of section 185 and 186 of the Act does not arise. Therefore, the paragraph 3(iv) of the Order is not applicable to the Company.

v. In our opinion and according to the information and explanation given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provision of Section 73 to 76 of the Companies Act, 2013, Companies (Acceptance of Deposit) Rules 2014 and Non Banking Financial Companies (Reserve Bank Directions) with regard to acceptance of deposit from public. Further, the Company has not accepted/renewed deposits/debentures/subordinated debts during the year under audit and has fully repaid the public deposits/ debentures/subordinated debts during the previous year ending 31st March 2022 by way of repayment/transfer to Investor Education and Protection Fund except for disputed amounts of INR 476 thousands which is pending before Consumer Courts. As evident by the records produced before us and as per the information and explanation given to us by the management , the Company has not received any order by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of deposits, except the orders from various Consumer Courts (including the Appellate Authorities/Courts acting upon under Consumer Protection Act) as stated above. We are informed that the Company will comply with the orders issued by the Consumer Courts as and when it is received.

vi. The Central Government has not prescribed maintenance of cost records u/s 148(1) of the Companies Act, 2013 for the Company. Therefore, the question of making any comments as required under paragraph 3(vi) of the Order does not arise.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the record of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income tax, duty of customs, cess, and other material statutory dues (if payable by the Company) have been regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, Goods and Services Tax, duty of customs, cess and any other material statutory dues were in arrears as at 31 March 2023 for a period of more than six months from the date they became payable.

(b) According to the records of the company made available to us and as per the information and explanations given, there are no statutory dues of provident fund, employees state insurance, income tax, goods and services tax, duty of customs, cess which have not been deposited on account of any dispute.

viii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 (43 of 1961) as income during the year

ix. (a) Based on our audit and according to the information and the explanations given to us, we are of the opinion that the Company has not defaulted in repayment of loans or other borrowings or in payment of interest thereon to any lender.

The Company has transferred unclaimed amounts of debentures and subordinated debts with interest upto maturity to the investor education and protection fund on 29th March, 2022 except the disputed amounts at legal forums amounting to INR 476 thousands as given in Note 14 read with sub notes thereon.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared as willful defaulter by any bank or financial institution or Government or Government Authority.

(c) In our opinion and according to the information and explanations given to us, the Company has utilized the money obtained by way of term loans from financial institutions during the year for the purposes for which they were obtained.

(d) According to the information and explanations given to us and the procedures performed by us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis has been used for long term purposes. However, the funds received from the Managing Director amounting to INR

74,007 thousands has been used for repayment of liabilities and same is blocked in accumulated losses of the Company.

(e) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Accordingly, paragraph 3(ix)(e) of the order is not applicable.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

x (a) Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Accordingly, paragraph 3(x)(a) of the order is not applicable.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Accordingly, paragraph 3(x)(b) of the order is not applicable.

xi (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit

(b) According to the information and explanation given to us, no report under sub-section (12) of section 143 of the Companies Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) According to the information and explanation given to us, there were no whistle blower complaints received by the company during the year by the Company.

xii The Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of the Act wherever applicable and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date for the period under audit.

xv In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provision of Section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi (a) The Company was registered under Section 45-IA of the Reserve Bank of India Act, 1934. However, the Certificate of Registration as issued by the Reserve Bank of India is not in force, since same was cancelled during December 2004.

(b) The present activity of the Company is restricted to recovery of dues and repayment of debts. During the year, the Company has not renewed or accepted any fresh deposits. Accordingly, the company has not conducted any Non-Banking Financial activities during the year. Further, the Company has also not conducted any Housing Finance activities.

(c) The company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, paragraph 3(xvi)(c) is not applicable.

(d) According to the information and explanations provided to us during the course of audit, the Group does not have any CIC. Accordingly, paragraph 3(xvi)(d) is not applicable. xvii The Company has incurred cash losses in the financial year and not in the immediately preceding financial year. The amount of cash losses incurred in FY 2022-23 amounts to INR 1,635 thousands.

xviii There has not been any resignation of the statutory auditors during the year. Therefore, reporting under paragraph 3(xviii) does not arise.

xix We draw attention to Note 28.01 of the financial statements. The Company has incurred losses and its majority of funds are blocked in Non Performing Assets, raising a doubt about the Company to continue as a going concern. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, the auditors knowledge of the Board of Directors and management plans and in view of the management perception as stated in Note 28.01 of the financial statements, we are unable to comment on the Companys capability 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.

xx The provisions of CSR is not applicable to the Company. Accordingly, paragraph 3(xx)(a) and 3(xx)(b) of the Order are not applicable. xi The Company is not required to prepare consolidated financial statements. Therefore, paragraph 3 (xxi) of the Order is not applicable.

ANNEXURE “B” TO INDEPENDENT AUDITORS REPORT

(Issued to the Members of MANIPAL FINANCE CORPORATION LIMITED) REFERRED TO IN PARAGRAPH 3(h) UNDER THE HEADING“REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS” OF EVEN DATE

Report on the Internal Financial Controls under Clause (h) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Manipal Finance Corporation Limited (“the Company”) as of 31st March 2023 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of Internal Financial Controls both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 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 system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitation of Internal Financial Controls over Financial Reporting

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

Basis for issue of qualified opinion

We draw attention to Note 28.14 of the Financial Statements. The Company has not verified the Fixed Assets i.e. Property, Plant and Equipments under lease falling under the head “leased machineries and equipment” & “leased vehicles and furniture” of Note 9 of the Financial Statement.

Qualified Opinion

In our opinion except for the effect of the matter described in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2023, based on the internal controls over financial reporting 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 issued by the Institute of Chartered Accountants Of India.

For SRIRAMULU NAIDU & CO

CHARTERED ACCOUNTANTS

Registration Number: 008975S

PLACE: Manipal

DATE : 30th May, 2023

Sd/-

CA SRIRAMULU NAIDU

Partner

Membership No. 018244

UDIN: 23018244BGUFYY8163