Aditya Birla Capital Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
1. We have audited the accompanying Standalone Financial Statements of Aditya Birla Capital Limited ('the Company'), which comprise the Standalone Balance Sheet as at 31st March 2026, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity for the year ended on that date, and Notes to the Standalone Financial Statements, including a summary of the material accounting policies and other explanatory information ('the Standalone Financial Statements').
2. 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 ('Ind AS') prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, the relevant circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time ('RBI Guidelines') and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2026,
and its Profit (including Other Comprehensive Income), its Cash Flows and the Changes in Equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing ('SAs') specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's 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 obtained by us is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current year. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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5. We have determined the matters described below to be the Key Audit Matters:
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Key Audit Matter
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How our audit addressed the key audit matter
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impairment of Loans to Customers
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(Refer Note No. 2 for Material Accounting Policies and Note No. 7 for Credit Risk Disclosures of the Standalone Financial Statements)
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As at 31st March 2026, the Company has reported gross loan
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Our key audit procedures included, assessing the appropriateness of
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assets of f 1,52,348.91 crore, against which an impairment loss of
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the Management's judgement and estimates used in the impairment
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f 1,713.80 crore has been recorded.
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analysis through procedures that included, but were not limited to, the
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Subjective Estimates:
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following:
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Under Ind AS 109, "Financial Instruments", allowance for loan losses
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• Assessed the governance framework around ECL, including approval
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is determined using Expected Credit Loss ('ECL') estimation model.
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and review of models, key assumptions, and management overlays
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The ECL framework integrates both model-based outcomes and
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by the Senior Management/Audit Committee in accordance with
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significant management judgement through overlays.
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the Board-approved ECL Policy and documentation supporting provisioning logic.
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The estimation of ECL on financial instruments involves significant
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management judgement and estimates and the use of different
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• Considered the Company's accounting policies for estimation of
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modelling techniques and assumptions, which could have a material
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Expected Credit Loss on loans and assessing compliance with the
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impact on reported profits and, therefore, increased levels of audit
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policies in terms of Ind AS 109;
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focus in the Company's estimation of ECLs, which are as under:
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• Assessed consistency of accounting policies with those applied in the
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• Data Inputs - The application of ECL model requires multiple
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previous year and obtained an understanding of the Management's
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internal and external data inputs. This increases the risk of
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updated processes, systems and controls implemented in relation to
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completeness and accuracy of the data that has been used to
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impairment allowance process;
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create assumptions in the model.
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• Obtained an understanding of and evaluated the design,
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• Model Estimations - Inherently judgemental models are used
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implementation and operating effectiveness of key internal controls
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to estimate ECL which involves determining Probabilities of
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over the ECL computation, the modelling techniques adopted by the
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Default ("PD"), Loss Given Default ("LGD") and Exposures at
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Company including application controls with respect to completeness
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Default ("EAD"). The PD and the LGD are the key drivers of
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and accuracy and report generation through interface of relevant
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estimation complexity in the ECL and as a result are considered
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systems. Further, performed walk through of the process involving
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the most significant judgemental aspect of the Company's
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manual control to ascertain the maker checker controls;
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modelling approach. Management overlays were introduced on
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• Tested the completeness and accuracy of the key inputs and
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certain asset classes forward-looking risk indicators warranted
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assumptions considered for calculation, recording, monitoring of the
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additional provisioning.
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impairment loss recognised and staging of assets;
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• Economic Scenarios - Ind AS 109 requires the Company to
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• On a test-check basis, assessed the critical assumptions and input
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measure ECLs on an unbiased forward-looking basis reflecting
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data used in the estimation of Expected Credit Loss models for
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a range of future economic indicators. Significant management
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specific key credit risk parameters, such as the segmentation of loan
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judgement is applied in determining the economic scenarios
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portfolios, the movement logic between stages, exposure at default
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used and the probability weights applied to them.
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(EAD), probability of default (PD) or loss given default (LGD);
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Considering the significance of the above matter to the overall
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• On a test-check basis, evaluated the reports and working for the
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financial statements and extent of management's estimates and
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methodology used in the computation of Through The Cycle PD, Point
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judgements involved, it requires significant auditor attention.
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In Time PD and LGD;
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Accordingly, we have identified this as a key audit matter.
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• Performed test of details procedures, on a sample basis, over ECL computation to assess the completeness and accuracy of the loan level data used in the model;
• Reperformed and verified the mathematical accuracy of ECL calculations for selected samples;
• Critically assessed the rationale, computation and consistency of management overlays, including evaluating whether they reflected observable risks and were free from undue management bias; and
• Assessed the appropriateness and adequacy of the related presentation and disclosures of Note No. 50 "Financial Risk Management" disclosed in the accompanying financial statements in accordance with the applicable accounting standards and related RBI Circulars and Resolution Framework.
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Other Information
6. The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Company's Annual Report, but does not include the Standalone Financial Statements and our Auditor's Report thereon. The Other Information is expected to be made available to us after the date of this Auditor's Report.
7. Our opinion on the Standalone Financial Statements does not cover the Other Information, and we do not express any form of assurance conclusion thereon.
8. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the Other Information identified above when it becomes available and, in doing so, consider whether the Other Information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the course of audit or otherwise appears to be materially misstated.
9. 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 and take appropriate action as applicable under the relevant laws and regulations.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
10. The Company's 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 (including Other Comprehensive Income), Cash Flows and Changes in Equity of the Company in accordance with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, RBI Guidelines and other accounting principles generally accepted in India. 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 judgements 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 Statements that give a true and fair view, and are free from material misstatement, whether due to fraud or error.
11. In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company's 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.
12. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
13. 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 auditor's 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.
14. As part of an audit in accordance with SAs we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
14.1. Identify and assess the risks of material misstatement of the Standalone 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;
14.2. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with
reference to the Standalone Financial Statements in place and the operating effectiveness of such controls based on our audit;
14.3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management;
14.4. Conclude on the appropriateness of the Board of Directors and Management's 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 Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone 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 auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern; and
14.5. Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
15. 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.
16. 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.
17. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current year and are therefore the Key Audit Matters. We describe these matters in our auditor's 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 Matters
18. Attention is drawn to the fact that the Standalone Financial Statements of the Company for the year ended 31st March 2025 were audited by M M NISSIM & CO LLP, whose report dated 13th May 2025 expressed an unmodified opinion on those Standalone Financial Statements. Our opinion on the Standalone Financial Statements is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
19. As required by the Companies (Auditor's Report) Order, 2020 ('the Order'), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the 'Annexure A', a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
20. As required by Section 143(3) of the Act, we report, to the extent applicable, that:
20.1. We have sought and obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit of the aforesaid Standalone Financial Statements.
20.2. 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, except for the matters stated in paragraph 21.8 below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
20.3. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
20.4. In our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015.
20.5. On the basis of the written representations received from the directors as on 31st March 2026, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2026 from being appointed as a director in terms of Section 164(2) of the Act.
20.6. The modification relating to the maintenance of books of account and other matters connected therewith are as stated in the paragraph 20.2 above on reporting under Section 143(3)(b) and paragraph 21.8 below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
20.7. With respect to the adequacy of the internal financial controls with reference to the Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in 'Annexure B'.
20.8. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.
21. With respect to the Other Matters to be included in the Auditor's 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:
21.1. The Company has disclosed the impact of pending litigations as at 31st March 2026 on its financial position in its Standalone Financial Statements - Refer Note No. 45 to the Standalone Financial Statements.
21.2. The Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note Nos. 5 and 7 to the Standalone Financial Statements.
21.3. The Company, as detailed in Note No. 69 to the Standalone Financial Statements, has regularly transferred the required amounts to the Investor Education and Protection Fund.
21.4. The Management has represented that, to the best of their knowledge and belief, as disclosed in Note No. 61 to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign
entities ('the 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 ('the Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
21.5. The Management has represented that, to the best of its knowledge and belief, as disclosed in Note No. 61 to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ('the 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 Beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
21.6. Based on such 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 representation under Sub-clauses (i) and (ii) of Rule 11(e), as provided under paras 21.4 and 21.5 above, contain any material misstatement.
21.7. The Company has neither declared nor paid any dividend during the year.
21.8. Based on our examination, which included test checks, the Company has used various accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility, which have operated throughout the year for all relevant transactions recorded in the software, except in respect of a) in six accounting software where the audit trail feature at database level was enabled for part of the year and audit trail feature for these systems for recording earlier values of the modified data was not enabled at the database level; and b) no audit trail feature for recording earlier values of the modified data was enabled at the database level for any direct data changes throughout the year in respect of two SaaS-based application.
Based on our procedures performed, we did not notice any instance of the audit trail feature being tampered with. In respect of the aforesaid databases, in the absence of audit trail for the said period, the question of our commenting on whether the audit
trail was tampered with, does not arise. Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention apart from exception mentioned above.
For M M NISSIM & CO LLP
Chartered Accountants
Firm Regn. No.: 107122W/W100672
Sanjay Khemani
Partner
Membership No.: 044577 UDIN: 26044577TFBXCV2969
Place: Mumbai Date: 4th May 2026
For KKC & Associates LLP
Chartered Accountants (formerly Khimji Kunverji & Co LLP) Firm Regn. No.: 105146W/W100621
Hasmukh Dedhia
Partner
Membership No.: 033494 UDIN: 26033494QTXESM5319
Place: Mumbai Date: 4th May 2026
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