We have audited the accompanying financial statements
of ESAF SMALL FINANCE BANK LIMITED (the "Bank"),
which comprise the Balance Sheet as at March 31, 2025,
Profit and Loss Account, the Cash Flow Statement for the
year then ended, and 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
financial statements give the information required by the
Banking Regulation Act, 1949 and the Companies Act,
2013 (the "Act") in the manner so required and give a true
and fair view in conformity with the Accounting Standards
prescribed under section 133 of the Act ("Accounting
Standards") as applicable to the Bank, the relevant circulars,
guidelines and directions issued by the Reserve Bank
of India ("RBI") from time to time and other accounting
principles generally accepted in India, of the state of affairs
of the Bank as at March 31, 2025, its profit and its cash
flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the financial statements 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 Auditor's
Responsibility for the Audit of the Financial Statements
section of our report. We are independent of the Bank in
accordance with the Code of Ethics issued by the Institute
of Chartered Accountants of India (ICAI) together with the
ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and
the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe
that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on the
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
financial statements of the current period. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have determined the matters described below to be
the key audit matters to be communicated in our report.

INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR'S REPORT THEREON

• The Bank's Board of Directors is responsible for the
preparation of the other information. The other
information comprises the Chairman's Statement,
the Directors' Report including annexures to the
Directors' Report included in the Annual Report but
does not include the financial statements and our
Auditors Report thereon and the Basel II Disclosures
under New Capital Adequacy Framework (Basel II
Disclosures). The Directors' Report is expected to be
made available to us after the date of this Auditors'
Report.

• Our opinion on the financial statements does not
cover the other information and Basel II Disclosures
available in the website of the Bank and we do not
express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained during the course of our
audit or otherwise appears to be materially misstated.

• If, based on the work we have performed on the
other information, we conclude that there is a
material misstatement of this other information, we
are required to communicate the matter to those
charged with governance as required under SA
720 'The Auditor's responsibilities Relating to Other
Information'. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS

The Bank's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect
to the preparation of these financial statements that give
a true and fair view of the financial position, financial
performance and cash flows of the Bank in accordance
with the provisions of Section 29 of the Banking Regulation
Act, 1949, Accounting Standards and other accounting
principles generally accepted in India and the circulars,
guidelines and the directions issued by RBI, from time
to time. This responsibility also includes maintenance
of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the
Bank and for preventing and detecting frauds and other
irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the financial statement

that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, management is
responsible for assessing the Bank'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 Bank or to cease operations, or has no
realistic alternative but to do so.

The Bank's Board of Directors is also responsible for
overseeing the Bank's financial reporting process.

AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE
FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an Auditors' Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.

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

• Identify and assess the risks of material 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 internalfinancial
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 Bank has adequate 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 the management.

• Conclude on the appropriateness of management's
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a materialuncertainty exists related to events or

conditions that may cast significant doubt on the
Bank's 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 Bank to cease to continue as a going
concern.

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS

1. As required by Section 143(3) of the Act and Section
30(3) of the Banking Regulation Act, 1949, based on
our Audit, 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, the transactions of the Bank
which have come to our notice have been within
the powers of the Bank.

c) As explained in the paragraph 2 below, the
financial accounting system of the Bank is
centralised and, therefore, accounting returns
are not required to be submitted by branches.

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

e) The Balance Sheet, Profit and Loss Account and
the Cash Flow Statement dealt with by this Report
are in agreement with the books of account.

f) In our opinion, the aforesaid financial statements
comply with the Accounting Standards specified
under Section 133 of the Act as applicable to the
Bank.

g) On the basis of the written representations
received from the directors and taken on record
by the Board of Directors, none of the directors
is disqualified as on March 31, 2025 from being
appointed as a director in terms of Section 164(2)
of the Act.

h) With respect to the maintenance of accounts and
other matters connected therewith, reference is
made to our remarks in paragraph 1(b) above on
reporting under Section 143(3)(b) and paragraph
1(k)(v) below on reporting under Rule 11(g) of the
Rules,

i) With respect to the adequacy of the internal
financialcontrols with reference to financial
statements of the Bank and the operating
effectiveness of such controls, refer to our
separate Report in "Annexure A". Our report
expresses an unmodified opinion on the
adequacy and operating effectiveness of the
Bank's internal financial controls with reference
to financial statements.

j) 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 entity being a banking company,
section 197 of the Act related to the managerial
remuneration is not applicable by virtue of
Section 35B(2A) of the Banking Regulation Act,
1949.

k) 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 Bank has disclosed the impact of
pending litigations on its financial position
as at the year-end in its financial statements
- Refer Schedule 12 to the financial
statements;

ii. The Bank did not have any long-term
contracts including derivative contracts as
at the year-end 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 Bank.

iv. (a) The Management has represented

that, to the best of it's knowledge and
belief, as disclosed in the note 18.16 to
the 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 Bank 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, directly or indirectly
lend or invest in other persons or
entities identified in any manner
whatsoever by or on behalf of the Bank
("Ultimate Beneficiaries") or provide
any guarantee, 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 B.16 of Schedule
18 to the financial statements, no funds
have been received by the Bank from
any person(s) or entity(ies), including

foreign entities ("Funding Parties"), with
the understanding, whether recorded
in writing or otherwise, that the Bank
shall, 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.

(c) Based on the audit procedures
performed 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. Based on our examination, which included
test checks, the Bank has used accounting
softwares for maintaining its books of
account for the FinancialYear ended
March 31, 2025 which has a feature of
recording audit trail (edit log) facility, and
the same has operated throughout the
year for all relevant transactions recorded
in the software systems. Further, during the
course of our audit, we did not come across
any instance of the audit trail feature being
tampered with and the audit trail has been
preserved by the Bank as per the statutory
requirements for record retention.

2. We report that during the course of our audit, we have
visited and performed select relevant procedures at 34
branches. Since the Bank considers its key operations
to be automated, with the key applications largely
integrated to the Core Banking System, it does not
require its branches to submit any financial returns.
Accordingly, our audit is carried out centrally at Head
Office based on the records and data required for the
purpose of audit being made available to us.