Ujjivan Financial Services Ltd Directors Report.

To the Members of Ujjivan Financial Services Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of Ujjivan Financial Services Limited ("the Company"), which comprise the balance sheet as at March 31, 2020, and the statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows For the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory inFormation.

In our opinion and to the best of our inFormation and according to the explanations given to us, the aForesaid standalone financial statements give the inFormation required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and Fair view in conFormity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, and profit, changes in equity and its cash flows For the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are Further described in the Auditors Responsibilities For the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules 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.

Emphasis of Matter

We draw attention to Note 28 to the standalone financial statements, which describes the extent to which the SARS-Cov-2 virus responsible For the COVID-19 Pandemic will impact the subsidiarys financial statements. Consequentially, the impact on the carrying value of Investment of subsidiary in the books of the Company will depend on the Future developments which the Company is unable to assess currently.

Our opinion is not modified in respect of this matter.

Key Audit Matters

We have determined that there are no key audit matters to communicate in our report.

Information Other than the Standalone 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 Directors Report, but does not include the standalone financial statements and our auditors report thereon, which we obtained prior to the date of this Auditors Report, and Annual Report, which is expected to be made available to us aFter that date.

Our opinion on the standalone financial statements does not cover the other inFormation and we do not express any Form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other inFormation and, in doing so, consider whether the other inFormation is materially inconsistent with the standalone financial statements 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 Annual 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 and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible For the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and Fair view of the financial position, financial perFormance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act. 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 standalone financial statement that give a true and Fair view and are Free From material misstatement, whether due to Fraud or error.

In preparing the standalone financial statements, 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 Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are Free From material misstatement, whether due to Fraud or error, and to issue an 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 standalone financial statements.

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

• IdentiFy and assess the risks of material misstatement of the financial statements, whether due to Fraud or error, design and perForm audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis For our opinion. The risk of not detecting a material misstatement resulting From Fraud is higher than For one resulting From error, as Fraud may involve collusion, Forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal 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 internal financial controls with reFerence to financial statements 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.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identiFy during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related saFeguards.

Other Matter

The standalone Ind AS financial statements of the Company For the year ended March 31,2019, were audited by another auditor whose report dated May 30, 2019 expressed an unmodified opinion on those statements.

Our opinion is not modified in respect of this matter.

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 Act, we give in “Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, 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, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.

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

e) On the basis of the written representations received From the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 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 reFerence to standalone financial statements of the Company and the operating effectiveness of such controls, reFer to our separate Report in "Annexure B".

(g) 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, in our opinion and to the best of our inFormation and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have 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.

3. As required by The Companies (Amendment) Act, 2017, in our opinion, according to inFormation, explanations given to us, the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Deepak Rao
Partner
Bengaluru Membership No. 113292
May 27, 2020 UDIN: 20113292AAAAJR4366

Annexure A to the Independent Auditors Report

of even date on the Standalone Financial Statements of Ujjivan Financial Services Limited For the year ended March 31, 2020

[ReFerred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report]

i. (a) The company has maintained proper records

showing Full particulars including quantitative details and situation of fixed assets (Property, Plant and Equipment).

(b) Fixed assets (Property, Plant and Equipment) have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) According to the inFormation and explanations given to us, there are no immovable properties, and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.

ii. The Company is involved in the business of rendering services. Accordingly, the provisions stated in paragraph 3(ii) of the Order are not applicable to the Company.

iii. The Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships (LLP) or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (the Act). Accordingly, the provisions stated in paragraph 3(iii)(a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the inFormation and explanations given to us, the Company has not either directly or indirectly, granted any loan to any of its directors or to any other person in whom the director is interested, in accordance with the provisions of section 185 of the Act and the Company has not made investments through more than two layers of investment companies in accordance with the provisions of section 186 of the Act. Accordingly, provisions stated in paragraph 3(iv) of the Order are not applicable to the Company.

v. In our opinion and according to the inFormation and explanations given to us, the Company has not accepted any deposits From the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules Framed there under.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company as the Central Government of India has not specified the maintenance of cost records For any of the products of the Company. Accordingly, the provisions stated

in paragraph 3(vi) of the Order are not applicable to the Company.

vii. (a) According to the inFormation and explanations

given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident Fund, employees state insurance, income-tax, goods and service tax and any other statutory dues applicable to it.

(b) According to the inFormation and explanations given to us, no undisputed amounts payable in respect of provident Fund, employees state insurance, income-tax, service tax, sales-tax, value added tax, goods and service tax and other statutory dues were outstanding, at the year end, For a period of more than six months From the date they became payable.

(c) According to the inFormation and explanation given to us and the records of the Company examined by us, there are no dues of income tax, goods and service tax and any other statutory dues which have not been deposited on account of any dispute.

viii. The Company does not have any loans or borrowings From any financial institution, banks, government or debenture holders during the year. Accordingly, the provision stated in paragraph 3(viii) of the Order is not applicable to the Company.

ix. The Company did not raise any money by way of initial public offer or Further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions stated in paragraph 3(ix) of the Order are not applicable to the Company.

x. During the course of our audit, examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the inFormation and explanations given to us, we have neither come across any instance of material Fraud by the Company or on the Company by its officers or employees.

xi. According to the inFormation and explanations given to us and based on our examination of the records of the Company, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the Company.

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 sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. 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 fully or partly convertible debentures during the year. Accordingly, the provisions stated in paragraph 3(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions stated in paragraph 3(xv) of the Order are not applicable to the Company.

xvi. The Company is required to and has been registered under Section 45-IA of the Reserve Bank of India Act, 1934 as an NBFC-ND-SI-CIC.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Deepak Rao
Partner
Bengaluru Membership No. 113292
May 27, 2020 UDIN: 20113292AAAAJR4366

Annexure B to the Independent Auditors Report

of even date on the Standalone Financial Statements of Ujjivan Financial Services Limited

[Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report]

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")

We have audited the internal financial controls with reference to standalone financial statements of Ujjivan Financial Services Limited ("the Company") as of March 31, 2020 in conjunction with our audit of the standalone 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 with reference to standalone 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 (ICAI) (the "Guidance Note"). 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.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether internal financial controls with reference to standalone 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 internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone 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 standalone 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 with reFerence to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

A Companys internal financial control with reFerence to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements For external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reFerence to standalone 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 standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reFerence to standalone 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 standalone financial statements to Future periods are subject to the risk that the internal financial control with reFerence to standalone 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 Company has, in all material respects, adequate internal financial controls with reFerence to standalone financial statements and such internal financial controls with reFerence to standalone financial statements were operating effectively as at March 31, 2020, based on the internal control with reFerence to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Deepak Rao
Partner
Bengaluru Membership No. 113292
May 27, 2020 UDIN: 20113292AAAAJR4366