edelweiss financial services ltd share price Auditors report

To the Members of Edelweiss Financial Services Limited report on the Audit of the Consolidated Financial statements

opinion

We have audited the accompanying consolidated financial statements of Edelweiss Financial Services Limited (hereinafter referred to as "the Holding Company"), its subsidiaries and trusts (the Holding Company, its subsidiaries and its trusts together referred to as "the Group") and its associate comprising of the consolidated Balance sheet as at March 31 2023, the consolidated Statement of Profit and Loss, including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory consolidated financial statements").

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the subsidiaries, trusts ofreportsofotherauditorsonseparatefinancialstatementsand on the other financial and associate, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its associate as at March 31, 2023, their consolidated profit including other comprehensive loss, their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.

Basis for opinion

Weconductedourauditof theconsolidatedfinancial in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group and associate in accordance with the ‘Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirementsthatarerelevanttoourauditoffinancialstatements under the provisions of the Act and the responsibilities in accordance with these requirements and the Code Rulesthereunder,andwehavefulfilled of Ethics. We believe that the audit evidence we have obtained is sufficient opinion on the consolidated 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 consolidated financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement oftheconsolidatedfinancialstatements. The results of audit procedures performed by us and by other auditors of components not audited by us, as reported by them in their audit reports furnished to us by the management, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

Key audit matters	How our audit addressed the key audit matter
Impairment of receivables from financing and other business
(as described in note 5.6, 13, 13.1, 14, 14.2 & 57.7 of the Consolidated Financial Statements)
The Groups impairment provision for receivables from financing business is based on the expected credit loss approach laid down under Ind AS 109. Ind AS 109 requires the Group to provide for impairment of its financial assets as at the reporting date using the expected credit loss (ECL) approach. ECL involves an estimation of probability-weighted loss on financial instruments over their life, considering reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions which could impact the credit quality of the Groups financial assets (loan portfolio).	The audit procedures, including those reported in the auditors report of respective subsidiary companies, comprised the following:
	a) Read and assessed the Groups accounting policy for impairment of financial assets and its compliance with Ind AS 109 and the governance framework approved by the Board of Directors pursuant to Reserve Bank of India guidelines issued on March 13, 2020.
	b) Tested the design and operating effectiveness of the controls for staging of loans based on their past-due status. Tested samples of performing (stage 1) loans to assess whether any loss indicators were present Performed procedures to test the inputs used in the ECL computation, on a sample basis.
In the process, a significant degree of judgement has been applied by the management for: . requiringthemtobeclassified understage 2 or 3
a) Staging of financial assets (i.e. classification in ‘significant c) increase in credit risk ("SICR") and ‘default categories);
b) Grouping of the loan portfolio under homogenous pools in order to determine probability of default on a collective basis;	d) Tested assumptions used by the management in determining the overlay for macro- economic factors.
	e) Assessed the additional considerations applied by the management for staging of loans as SICR or default categories in view of Companys policy on OTR.
c) Assigning internal rating grades to customers for which external rating is not available;
d) Calibrating external ratings-linked probability of default to align with past default rates;	f) Tested the arithmetical accuracy of computation of ECL provision performed by the Company in spreadsheets.
e) Applying assumptions regarding the probability of various scenarios and discounting rates for different loan products;	g) Read the report on ECL model reviewed by external consultant during the year.
f) Estimation of management overlay for macro- economic factors bearing a correlation with the credit quality of the loans.
In view of such high degree of managements judgement involved in estimation of ECL, it is considered as a key audit matter.

 

Key audit matters	How our audit addressed the key audit matter
It systems and controls
The reliability and security of IT systems play a key role in the financial reporting process of the Group. The Groups key financial accounting and reporting processes are highlycompanies, comprised the following: automated, whereby any gaps in the IT control environment could result in a material misstatement of the financial accounting and reporting records.	The audit procedures assisted by our IT specialists, including those reported in the auditors report of respective subsidiary
	a) Tested the design and operating effectiveness of the Companys IT access controls over the information systems that are important to financial reporting and various interfaces, configuration and other identified application controls.
Therefore, the assessment of the general IT controls and the application controls specific to the accounting and preparation of financial information is considered to be a key audit matter.
	b) Tested IT general controls (logical access, changes management and aspects of IT operational controls). This included testing requests for access to systems were reviewed and authorized.
	c) Tested the periodic review of access rights. Also tested requests of changes to systems for approval and authorization.
	d) In addition to the above, tested the design and operating effectiveness of certain automated controls that were considered as key internal controls.
	e) Tested the design and operating effectiveness of compensating controls in case deficiencies were identified and, where necessary, extended the scope of our substantive audit procedures.

Valuation of Investments in security receipts (sr) for edelweiss Assets reconstruction Company Limited

The fair value of SRs is determined through discounted cash flow method which involves management judgement usingof a subsidiary company, comprised the following: level 3 inputs such as projection of future cash flows and expenses.	The audit procedures those reported in the auditors report
	a) Assessment of internal controls over measurement of fair value and evaluating the methodologies, inputs, judgments made and assumptions used by management in determining fair values.
The management has involved credit rating agencies for valuation of SR.
Considering the fair valuation of investments is significant overall consolidated financial statements and the degree of managements judgment involved in the estimate, any error	b) Evaluated rationale to of the models and accounting treatment applied. Compared observable inputs against independent sources and externally available market data for sample cases.
in the estimate could lead to material misstatement in the consolidated financial statements. Accordingly, it is considered as a key audit matter.
	c) Performed testing on a sample basis of key inputs as mentioned above to validate the reasonableness of the input values.
	d) Assessed disclosures included in the Financial Statements with respect to such fair valuation.

Information other than the Financial statements and Auditors report thereon

The Holding Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Board report, but does not include the consolidated financial statements and our auditors report thereon, which we obtained prior to the date of this auditors report, and the Annual report, which is expected to be made available to us after that date.

Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the consolidatedfinancialstatements or our knowledge obtained in the 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.

When we read the Board Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those Charged with Governance.

Responsibilities of Management for the Consolidated Financial Statements

The Holding Companys Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group including its associate in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group and of its associate are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of their respective companies 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 the 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 consolidatedfinancialstatements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financialstatements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associate are responsible for assessing the ability of their respective companies 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 Group or to cease operations, or has no realistic alternative but to do so.

Those respective Board of Directors of the companies included in the Group and of its associate are also responsible for overseeing the financial reporting process of their respective companies.

Auditors responsibilities for the Audit of the Consolidated Financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 misstatementoftheconsolidatedfinancialstatements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has adequate internal financial controls with reference to financial statements in place and 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 the ability of the Group and its associate 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 consolidated financial 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 Group and its associate to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficientappropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associate of which we are the independent auditors, to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any 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 consolidated financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

other Matter

(a) We did not audit the financial statements and other financial information, in respect of:

31 subsidiaries, whose financial statements include total assets of 504,010.53 million as at March 31, 2023 and total revenues of 75,598.18 million and net cash inflow of 10,194.56 million for the year ended on that date. These financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditors reports have been furnished to us by the management

7 associate companies forming part of the Group, whose statements include Groups share of net profit after tax of 307.78 million and Groups share of total comprehensive income of 326.26 million for the period from April 1, 2022 to March 30, 2023, as considered financialstatement,

whose financial statements, other financial theconsolidated information have been audited by other auditors and whose reports have been furnished to us by the Management.

Our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and 7 associate companies, and our report in terms of sub- sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and 7 associate companies, is based solely on the report(s) of such other auditors.

(b) The actuarial valuation of liabilities of Edelweiss Tokio Life Insurance Company Limited (ETLIFE) for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at March 31, 2023 is the responsibility of ETLIFEs Appointed Actuary ("the Appointed Actuary"). The actuarial valuation of these liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at March 31, 2023 has been duly certified by the Appointed Actuary and in his opinion, the assumptions for such valuation are in accordance with Ind AS 104 "Insurance Contracts", Ind AS 109 "Financial Instruments", the guidelines and norms issued by the Insurance Regulatory and Development Authority of India (‘IRDAI) and the Institute of Actuaries of India in concurrence with IRDAI. The auditors have relied upon the Appointed Actuarys certificate in this regard for forming their opinion on the valuation of liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists in financial statement of the ETLIFE.

(c) The actuarial valuation of liabilities Zuno General Insurance Limited (formerly known as Edelweiss General Insurance Company Limited (ZGIL) for Incurred But Not Reported and Incurred But Not Enough Reported claims of ZGIL as at March 31, 2023 is the responsibility of ZGILs Appointed Actuary. The actuarial valuation of these liabilities has been duly certified by the ZGILs Appointed Actuary and in his opinion, the assumptions for such valuation are in accordance with Ind AS 104 "Insurance Contracts", the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with IRDAI. The auditors have relied on the ZGILs Appointed Actuarys certificate regard.

Our opinion above on the consolidatedfinancialstatements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done other auditors and the financial statements and other financial information certified by . the Management

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of the subsidiary companies and associate, incorporated in India, as noted in the ‘Other Matter paragraph we give in the "Annexure 1" a statement on the matters specified in paragraph 3(xxi) of the Order.

2. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of subsidiaries and associate, as noted in the ‘other matter paragraph we report, to the extent applicable, that: (a) We/the other auditors whose report we have relied upon 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 of the aforesaid consolidated financial statements; (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of other auditors; (c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including

Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements; (d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; (e) On the basis of the email confirmation received from the directors of the Holding Company as on March 31, 2023 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies and associate, none of the directors of the Groups companies and its associate, incorporated in India, is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with referencetoconsolidatedfinancialstatements of the Holding Company and its subsidiary companies and associate, incorporated in India, and the operating effectiveness of such controls refer to our separate Report in "Annexure 2" to this report;

(g) In our opinion and based on the consideration of reports of other statutory auditors of the subsidiaries and associate, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Holding Company, its subsidiaries and associate incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) 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 and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries and associate, as noted in the ‘Other matter paragraph:

i. The consolidated financialstatements disclose the impact of pending litigations on its consolidated financial position of the Group and its associate in its consolidated financial statements Refer Note 52.1

(a) to the consolidated financial statements; i

i. Provision has been made in the consolidated financial accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts Refer Note 83 to the consolidated financial statements in respect of such items as it relates to the Group and its associate; ii

i. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and

Protection Fund by the Holding Company, its subsidiaries and associate, incorporated in India during the year ended March 31, 2023.

iv. a) The respective managements of the Holding Company and its subsidiaries and associates which are companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries and associates respectively that, to the best of its knowledge and belief as disclosed in the note 69

(A) to the consolidated financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Holding Company or any of such subsidiaries and associates 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 or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the respective Holding Company or any of such subsidiaries and associates ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; b) The respective managements of the Holding Company and its subsidiaries and its associates which are statements have been audited under the Act have companies incorporated in India whose financial represented to us and the other auditors of such subsidiaries and associate respectively that, to the best of its knowledge and belief, other than as disclosed in the note 69

(B) to the consolidated financial statements, no funds have been received by the respective Holding Company or any of such subsidiaries and associate from any person

(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Holding Company or any of such subsidiaries and associate 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 the audit procedures that have been considered reasonable and appropriate in the circumstances performed by us and that performed by the auditors of the subsidiaries and associate which are companies incorporated in India whose financial statements have been audited under the Act, nothing has come to our or other auditors notice that has caused us or the other auditors to believe that the representations under sub-clause

(a) and

(b) contain any material mis-statement.

v. The final dividendpaid by the Holding Company, its subsidiaries, associate companies incorporated in India during the year in respect of the same declared for the previous year is in accordance with section 123 of the

Act to the extent it applies to payment of dividend.

The interim dividend declared and paid during the year by the Holding Company and subsidiary Company and until the date of the audit reports of such Holding Company and Subsidiary Company incorporated in India is in accordance with section 123 of the Act.

As stated in note 76 to the consolidated financial statements, the Board of Directors of the Holding Company have proposed final dividend for the year which is subject to the approval of the members at the respective ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable only w.e.f. April 1, 2023 for the

Holding Company, its subsidiaries and associate companies incorporated in India, hence reporting under this clause is not applicable.

For s.r. Batliboi & Co. LLp

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per shrawan Jalan

Partner

Membership Number:102102

UDIN: 23102102BGXJES3910

Place of Signature: Mumbai

Date: May 26, 2023

Requirements" of Our Report of Even Date on the Consolidated Financial Statements of Edelweiss

Financial services Limited

Based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of the subsidiary companies and associate, incorporated in India, as noted in the ‘Other Matter paragraph we state that:

3(xxi) There are no qualifications or adverse remarks by the respective auditors in their report on Companies (Auditors Report) Order, 2020 of the companies included in the consolidated financial statements except for following where the respective auditor have reported unfavorable or adverse remarks in their audit report to the principal auditor.

s. no.	name	CIn	Holding company/ subsidiary/ associate	Clause number of the CAro report which is unfavorable or adverse
1	Edelweiss Asset Reconstruction Company Limited	U67100MH2007PLC174759	Subsidiary	iii (c) and iii (d)
2	Nido Home Finance Limited (formerly Edelweiss Housing Finance Limited)	U65922MH2008PLC182906	Subsidiary	iii (c) and iii (d)
3	Ecap Securities & Investments Limited	U67190TG2008PLC057122	Subsidiary	ix (d) and xvii
4	Edelcap Securities Limited	U67120TG2008PLC057145	Subsidiary	xvii
5	Ecap Equities Limited (formerly Edel Land Limited)	U74900MH2008PLC287466	Subsidiary	i(c), iii(c), iii(d), ix(d) and xvii
6	Edelweiss Global Wealth Management Limited	U67100TG2007PLC112499	Subsidiary	xvii
7	Allium Finance Private Limited	U67120MH2008PTC180229	Subsidiary	iii (c) and iii (d)
8	Edelweiss Investment Adviser Limited	U74140TG2008PLC120334	Subsidiary	iii (c), iii (d) and xvii
9	Edelweiss Retail Finance Limited	U67120MH1997PLC285490	Subsidiary	iii (c) and iii (d)
10	ECL Finance Limited	U65990MH2005PLC154854	Subsidiary	iii (c) and iii (d) and xvii
11	Edelweiss Securities and Investments Private Limited	U65990TG2009PTC113078	Subsidiary	iii (c) and iii (d)
12	Edelweiss Rural & Corporate Services Limited	U45201TG2006PLC078157	Subsidiary	iii (c), iii (d), ix (d), ix (e), xvii and xix
13	Comtrade Commodities Services Limited	U66990GJ1995PLC025267	Subsidiary	xvii
14	Edel Finance Company Limited	U65920MH1989PLC053909	Subsidiary	xvii
15	Edelweiss Real Assets Managers Limited	U67110MH2021PLC362755	Subsidiary	xvii
16	Edelweiss Financial Services Limited	L99999MH1995PLC094641	Holding Company	ix (e)
17	Nuvama Wealth and Investment Limited (formerly Edelweiss Broking Limited)	U65100GJ2008PLC077462	Associate	iii (c)
18	Nuvama Asset Management Limited (formerly ESL Securities Limited)	U67190MH2019PLC343440	Associate	xvii
19	Nuvama Capital Services (IFSC) Limited (formerly known as Edelweiss Securities (IFSC) Limited)	U65999GJ2016PLC094838	Associate	xvii
20	Pickright Technologies Private Limited	U72200KA2019PTC126326	Associate	xvii

For s.r. Batliboi & Co. LLp

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per shrawan Jalan

Partner

Membership Number:102102

UDIN: 23102102BGXJES3910

Place of Signature: Mumbai

Date: May 26, 2023

statements of edelweiss Financial services Limited

report on the Internal Financial Controls under Clause (i) of sub-section 3 of section 143 of the Companies Act, 2013

("the Act")

In conjunction with our audit of the consolidated financial statements of Edelweiss Financial Services Limited (hereinafter referred to as the "Holding Company") as of and for the year ended March 31, 2023, we have audited the internal financial controls with reference to consolidated financialstatements of the Holding Company and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group") and its associate, which are companies incorporated in India, as of that date.

Managements Responsibility for Internal Financial Controls

The respective Board of Directors of the companies included in the Group and its associate, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding 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 the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and to the respective 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 Holding Companys internal financial controls with reference to consolidated financial statements 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, specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both, issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to consolidated financial statements 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 with reference to consolidated financial statements and their operating effectiveness. Our audit of internalfinancialcontrols with reference to consolidated financial statements included obtaining an understanding of internal financial controls with reference to consolidated financial statements, 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 judgement, 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 and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and on the internal financial controls with reference to consolidated financial statements.

Meaning of Internal Financial Controls With Reference to Consolidated Financial Statements

A companys internal financial control withreferencetoconsolidatedfinancialstatement 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 with reference to consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of records that,

Annexure 2 to the Independent Auditors report of even date on the Consolidated Financial statements of edelweiss Financial services Limited (Continued)

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 or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to Consolidated Financial statements

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

opinion

In our opinion, the Group and its associate, which are companies incorporated in India, have, maintained in all material respects, adequate internal financial controls with reference to consolidated financial statementsandsuchinternalfinancialcontrols with reference to consolidated financial statements were operating effectively over financial reporting criteria established by the Holding Company considering the stated in the Guidance Note issued by the ICAI.

other Matters

Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to consolidated financial statements of the Holding Company, in so far as it relates to these 20 subsidiaries, which are companies incorporated in India, is based on the corresponding reports of the auditors of such subsidiaries incorporated in India.

For s.r. Batliboi & Co. LLp

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per shrawan Jalan

Partner

Membership Number:102102

UDIN: 23102102BGXJES3910

Place of Signature: Mumbai

Date: May 26, 2023