SBI Cards & Payment Services Ltd Auditor Reports

n 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. 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 misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timingoftheauditand any significant 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 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.

The Financial Statements include comparative financial figures of the Company for the corresponding year ended 31^st March,

2024 which has been audited by predecessor firms of joint statutory auditors vide their audit report dated April 26 April, 2024, in which the predecessor firms of joint statutory auditors have expressed an unmodified opinion.

We have relied upon the said report for the purpose of our report on these financial statements. Our opinion is not modified in respect of the above matter.

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, we give in Annexure – ‘A, a statement on the matters specified in paragraph 3 and 4 of the Order.

2. We also enclose our report in terms of section 143(5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriateWeconsider and according to the information and explanations given to us by the management, in Annexure - ‘B, on the identified directions and sub-directions issued by Comptroller and

Auditor General of India.

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

a. we have sought and obtained all the information and deficienciesininternalcontrolthat weidentify 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 the statement of cash flows dealt with by this the report are in agreement with the books of account;

d. in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards ("Ind AS") notified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,

2015, as amended from time to time;

e. on the basis of the written representations received from the directors as at March 31, 2025 and taken on record by the board of directors, none of the directors are disqualified 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 reference to financial statements of the company and the operating effectiveness of such controls, refer to our separate report in

Annexure - ‘C;

g. with respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/ provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act;

h. with respect to the other matters to be included in the 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 disclosed the impact of pending litigations on its financial position in its financial statements in note 44 to its financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company;

iv. (a) The Management has represented that, to the best of its knowledge and belief as disclosed in note no. 8 to the financials statements, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate or provide any guarantee, Beneficiaries") security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief as disclosed in note no. 8 to the financials statements, no funds (which are material either individually or in aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"),with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate or provide any guarantee, Beneficiaries") 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, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.

v. During the year the Company has declared and paid interim dividend, which is in accordance with section 123 of the Act.

vi. Based on our examination, which included test checks, and in accordance with the requirements of Implementation Guide on Reporting on Audited Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules

2014, except for our comments below, the

Company has used accounting softwares for maintaining its books of account for the financial year ended March 31, 2025 which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with. The audit Trail has been preserved by the Company as per statutory requirements for record retention.

in respect of accounting software operated by a third party service provider and used for payroll and allied functions of the

Company, the feature of recording audit trail (edit log) facility was enabled as confirmedby the consultants of the service provider. However, we are unable to independently verify and confirm the same. Also we are not in a position to confirmwhether the audit trail feature in the accounting software operated by third party service provider has been tampered with and preserved as per statutory requirements for record retention.

Based on the audit procedures performed and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) In respect of its property, plant and equipment, intangible assets and right-of-use assets;

a. (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and relevant details of right-of-use assets;

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

b. The Company has a regular programme of physical verification of property, plant and equipment by which all fixed assets are verified, over the period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

According to the information and explanations given to us, no material discrepancies were noticed on such verification;

c. The Company is not having any immovable property. Hence, reporting under clause 3(i)(c) of the Order is not applicable to the Company;

d. The Company has not revalued any of its property, plant and equipment (including right-of-use assets) and intangible assets during the year;

e. According to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceedings have been initiated during the year or are pending against the

Company as at March 31, 2025 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, as amended.

(ii) (a) The Company does not have any inventory hence reporting under clause 3(ii)(a) of the Order is not applicable;

(b) According to the information and explanations given to us and on the basis of our examination of the records of Company, the Company has been sanctioned the working capital limit in excess of 5 Crores, in aggregate during the year, from banks or financial institutions on the basis of security of current assets. The amount reported in quarterly statements filed by the Company with such banks or financial institutions during the year are in agreement with the books of account of the Company and no material differences were observed therein.

(iii) The Company is a non-deposit accepting Systemically

Important Non-banking Financial Company (NBFC-ND-SI) registered with Reserve Bank of India (RBI) and in the Business of credit card services, in the nature of credit to the customers, which are treated as loans in the financial statements.

During the year, in the ordinary course business, the Company has made investments in and granted loans and advances in the nature of loans, secured and unsecured loans to companies, firms, limited liability partnership and other parties. With respect to such investments, loans and advances;

a) The provisions of paragraph 3(iii)(a) of the Order are not applicable to the Company as its principal business treated as loans in the financial statements.

b) In our opinion having regard to the nature of the Companys business, the invesments made and the terms and conditions of the grant of loans and advances in the nature of loans are not prejudicial to the Companys interest.

c) The Company is a non-banking financial company engaged in the business of issuing credit card to customers. In respect of loans and advances in the nature of loans, the schedule of repayment of principal and interest payment for EMI portion of portfolio is stipulated, rest of the portfolio is non-EMI portion which do not constitute any schedule of repayment. During the year 54,198 no. of accounts (0.8%) in EMI portfolio have defaulted. Considering that the EMI and non-EMI loans are tagged under the same account of the customer, amount for the EMI defaulted accounts is not separately ascertainable.

Further, the parties in general are repaying the principal amounts and are also generally regular in payment of interest, except for the instances where there are delays or defaults in repayment of principal and/ or interest and in respect of which the Company has recognised necessary provisions in accordance with the principles of Indian Accounting Standards (Ind AS) and the guidelines issued by the Reserve

Bank of India ("RBI") for Income Recognition and Asset Classification (which has been disclosed by the Company in Note 8, Note 37.1.2 (as disclosed below) and note 57.6 to the financial statements), as applicable. Having regard to the nature of the companys business and the volume of information involved, it is not practicable to provide detailed itemised list of loan assets where delinquencies in the repayment of principal and interest have been identified.

(d) The principal amount overdue for more than ninety days, in respect of loans and advances in the nature of loans, as at the year end is 1,394.18 Crores as per breakup hereunder. Reasonable steps are being taken by the Company for recovery of the principal and interest.

(e) The Company is a NBFC and in the business of credit card services, in the nature of credit to the customers, which are treated as loans in the financial statements. Hence, reporting under clause 3(iii)(e) of the Order is not applicable;

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii) (f) of the Order is not applicable.

The Company has not provided any guarantee or security during the year to companies, firms, LLPs or any other parties.

(iv) The Company has given credit card advances of 0.05 Crores to Five Directors and 0.68 Crores to Twelve related parties in the ordinary course of business. (Refer note 8). The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of such loans. The Company has not made any investment and provided any guarantee and security covered by section 185 and 186 of the Act.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder to the extent notified. Hence reporting under clause 3(v) of the Order is not applicable. Further, the provisions of sub-section (1) of Section 73 are not applicable to the Company as it is a non-banking financial company registered with RBI, engaged in the business of credit card services. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal against the Company in this regard.

(vi) Pursuant to the rules made by the Central Government of India, the company is not required to maintain cost records as specified under sub-section (1) of section 148 of the Act, hence reporting under clause 3(vi) of the Order is not applicable.

(vii) In respect of statutory dues: a. In our opinion, the undisputed statutory dues including goods and service tax, provident fund, employee state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, as applicable have generally been deposited with the appropriate authorities and no undisputed amounts payable in respect of aforesaid dues are outstanding as at March 31, 2025 for a period of more than six months from the date they became payable.

b. The particulars of statutory dues referred to in subclause (a) as at March 31, 2025 which have not been deposited on account of a dispute, are as follows;

Notes:

1. AY = Assessment Year

2. FY = Financial Year

3. *against the above liability amount (includes Interest and Penalty), 2.04 Crores has been deposited.

4. ** CESTAT has serviced favourable order in favour of the Company, however department has preferred an appeal against the CESTAT order in Honble Supreme Court, which is yet to be listed.

5. ^ In the process of filing appeal as on 31.03.2025

(viii) There was no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender;

(b) The Company has not been declared willful defaulter by any bank or financial institution or other lender.

(c) The term loans received during the year were applied for the purpose for which these term loans were obtained.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been utilized during the year for long-term purposes.

(e) The Company has no subsidiaries, associate and joint ventures, hence reporting under clause 3(ix) (e) of the Order is not applicable.

(f) The Company has no subsidiaries, associate and joint ventures, hence reporting under clause 3(ix) (f) of the Order is not applicable.

(x) (a) The company has not raised funds by way of an initial public offer or further public offer during the year hence reporting under clause 3(x)(a) of the Order is not applicable.

However, the Company has raised the funds of 1,500 Crores by issue of Non-convertible debentures on private placement basis during the year. The money raised was applied for the purposes for which the same was raised.

(b) The Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year hence reporting under clause 3(x)(b) of the Order is not applicable, to that extent.

(xi) (a) No fraud by the company or no material fraud on the company has been noticed or reported during the year. However, certain instances of customer frauds on the Company have been reported during the year.

As informed, these primarily relate to fraudulent usage of credit cards issued by the Company. During the financialyear 2024-25, the total amount involved in such frauds was 0.48 Crores and the recovery against this amount (pertaining to current year as well as the previous years) is 1.14 Crores. During the year, no employee fraud has been committed.

(b) No report under sub-section (12) of Section 143 of the Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014, as amended, with the Central

Government, during the year and upto the date of this report.

(c) No whistle blower complaint was received by the Company during the year.

(xii) The Company is not a Nidhi company hence reporting under clause 3(xii)(a) to 3(xii)(c) is not applicable.

(xiii) The transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable.

The details of such transactions have been disclosed in the financialstatements as required by Ind AS 24 Related Party Disclosures.

(xiv) (a) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

(b) As represented by the management of the Company,

Internal Audit for the period January 1, 2025 to March 31, 2025 is in progress. Accordingly, the

Internal Audit Report have been considered by us for the purpose of our audit only upto the period ended December 31, 2024.

(xv) The Company has not entered into any non-cash transactions with its directors or person connected with them, hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) (a) The Company is required to be registered under section 45-IA of the Reserve Bank of India (RBI) Act, 1934 (2 of 1934). The Company is a Non-Deposit accepting Systemically Important Non-Banking Financial Company (NBFC-ND-SI) registered with Reserve Bank of India (RBI) vide Registration Number 14.01328 under section 45 IA of the RBI

Act, 1934.

(b) The Company has not conducted any non-banking financial or housing finance activities without a valid Certificate of Registration (COR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934.

(c) The Company is not a Core Investment Company

(CIC) as defined in the regulations made by the Reserve Bank of India. Hence, reporting under clause 3(xvi)(c) of the Order is not applicable.

(d) In our opinion, there is no Core Investment Company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

(xvii) The Company has not incurred cash losses during the financial year covered under our audit and in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of the company during the year.

(xix) 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 and our knowledge of the board of directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on date of audit report indicating that the company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company.

We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

(xx) (a) There are no unspent amounts towards Corporate Social Responsibilities (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Hence, reporting under clause 3(xx)(a) of the Order is not applicable for the year.

(b) there are no unspent amounts under sub section

(5) of Section 135 of the Companies Act towards

Corporate Social Responsibilities (CSR) pursuant to ongoing projects, Hence, reporting under clause 3(xx)(b) of the Order is not applicable for the year.

(xxi) The reporting under clause 3(xxi) is not applicable in respect of audit of financial statements of the Company since the Company has no subsidiaries, associate and joint ventures.

We have audited the internal financial controls with reference to the financial statements ofSBI‘ Cards and Payment Services Limited ("the Company") as at March 31, 2025 in conjunction with our audit of the financial statements of the company for the year ended on that date.

The management of the company is responsible for establishing and maintaining internal financial controls with reference to financial statements 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" (the "Guidance Note") 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 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 Act.

Our responsibility is to express an opinion on the companys internal financial controls with reference to financial statements of the Company 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 the Institute of Chartered Accountants of India and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financialcontrols 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 with reference to financialstatements 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 with reference to financialstatements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financialcontrols with reference to financial 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 is sufficient and appropriate to provide a basis for our audit opinion on the companys internal financial controls system with reference to financial statements

A Companys internal financial control with reference to financial statements 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 financial statements 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 or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

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

In our opinion, to the best of our information and according to the explanations given to us, the company has maintained, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2025, based on the internal control with reference to financial statements criteria established by the company considering the essential components of internal control stated in the guidance note on ‘Audit of internal financial controls over financial reporting issued by the ‘Institute of Chartered Accountants of India.

Chartered Accountants Chartered Accountants

Firm Regd. No. 000250N Firm Regd. No. 000346N

Partner Partner

Membership No. 084312 Membership No. 099143 UDIN:25084312BMOVEL3145 UDIN:25099143BMKOCT2022

Place: Gurugram Place: Gurugram

Date: April 24, 2025 Date: April 24, 2025