SoRe BATL/BOI & Co. L P Chartered Accountant s

12tl1 Floor, Th e Ruby 29 Se napa ti Bapat Ma rg Dada r (West) Mumbai - 400028, Ind ia

Tel: +9 1 22681 9 8000

Independent Auditor's Report on the Standalone Ind AS Financial Results pursuant to the Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

To The Board of Directors Spandana Sphoorty Financial Limited

1. We have audited the accompanying statement of Standalone Ind AS financial results of Spandana Sphoorty Financial Limited ('the Company') for the year ended March 31, 2019 ('the Statement') attached herewith, being submitted by the Company pursuant to the requirements of Regulation 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Circular No. CIR/IMD/DFl/69/2016 dated August 10, 2016 (collectively, 'the Listing Regulations'). This Statement has been prepared on the basis of the audited Ind AS financial statements for year ended March 31,2019, which is the responsibility of the Company's management and has been approved by the Board of Directors. Our responsibility is to express an opinion on the Statement based on our audit of the Standalone Ind AS financial statements as at and for the year ended March 31, 2019, prepared in accordance with Indian Accounting Standards ('Ind AS') specif ied under section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India and the relevant requirements of the Listing Regulations.

2. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the Statement is free of material misstatement .

3. An audit involves performing procedures to obtain sufficient audit evidences about the amounts and disclosures in the Statement. The procedures selected depend on the auditor's judgement including the assessment of material misstatement of the Statement, whether due to fraud or error. In making those risk assessment, the auditor considers internal controls relevant to the Company's preparation and fair presentat ion of the Statement in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4. In our opinion and to the best of our information and according to the explanations given to us, the Statement:

i. is presented in accordance with the requirements of the Listing Regulations; and

ii. gives a true and fair view of the net profit including other comprehensive income and other financial information of the Company for the year ended March 31, 2019.

5. We draw attention to Note 4 of the Statement, which describes an uncertainty arising from an observation made by the Reserve Bank of India (RBI) with regards to adherence to the pricing guidelines issued under RBI Master Directions DNBR. PD. 008/03.10.119/2016-17 dated September 1, 2016, as amended ("Master Directions"), management's response thereto supported by external legal advice confirming compliance with the Master Directions. Pending outcome of the management's response to the RBI , no provision has been made in the accompanying Statement.

Our opinion is not modified in respect of this matter.

For S. R. Batliboi Co. LLP

jhartered Accountants

I AI Firm Re~istration Number: 301003E/E300005

fc.~ per Shrawan alan Partner Membership NO.:l02102

Mumbai May 24,2019

S.R. Batllboi & Co. LLP, a Limited Liability Partnership with LL P Identity No. AAB-4294 Regd, Office: 22, Camoc Sl ree!, Block 'B', 3rd Floor, Kolkala'700 016

Plirticulllrs

ASSETS Financialnssets

Cash and cash equivalents

SPANDANA SPHOORTY FINANCIAL LIMITED (eIN: 1I6S929TG2003PLC04(648)

Rogd. Office: Plot No:· 31 & 31, Ramky Selenium Tower" Tower A, Ground Floor,

Finnncial Dlst, Nunnkrnmguda, Hy,lerabad, TciangaJl8 -500()32.

Pholle No. : 040-1812 6666, W~bsitc : www.spandan.iudla.com

St.tement of Stalldalonc Financial Result. thr thl' half year I year ended xlarch 31.2019

(Ru t!CS in millions unless otherwise stated) As at As at

March 31. 2019 March 31, 2018 Audited Audited

1,454J17 1,025.07 Bank Balances other !btm cash and cash equivulents Trade Receivables

2,028.09 3549

1,032.47 25.54

Loan Portfolio Investments Other financial assets

Total Financial Assets

Non-financial assets ClIIrent tax assds (nd) Deferred tax asseL,> (net) Property, Plant and Equipment Intangible assets Other non-linancial assets

Total Non-Financial Assets

LIABILITIES AND EQUITY LIABILITIES Financial Liabilities

Debt Securities

Total Assets

Borrowings (Other than Debt Securities) Subordinated Liabilities Other Financial liabilities

Total Financial Liabilities

Non-Financial Liabilities Current tax liabilities (net) Provisions Other non-linancialliabilities

Total Non-Financial Liabilities

EQUITY Equity share capital Other equity

Total Equity

Phll:c; Mumbai Dtlle: May 2-1,2019

Total E uitv and Liabilities

41,653.89 646.35 861.35

46,679.24

83.37 1,998.36

70.86 21".53

127.01 2,301.13

48,980.37

13,719.64 15,529.89

201.56 435 .21

29,886.30

J4S 342

223.43 230.33

596.34 IS,267..40 18,863.74 48.980.37

30,896.26 2100

659.59. 33,659.93

41.86 3,840.84

58,54 26.03 15..47

3.982.74 37.6~2.67

10.147.13 12,96508

201.55 14514

23,458.90

92.96 3 .90

180.3! 277.17

For und on behalf of the Board of'Dire firs I) SPANDANA SPHOORTY FINANCIAL MlTED

SPA:-.IDANA SPIIOOlHY F'IN.·\NCIAL LIMIT/<]) (CIN: lI65929TG2003PLCIJ.I0<>48)

Rl'gd. Office: Plot No:- 31 & 32, Raulky SclC'lIiulI1 To""tr.-i. Tow,'r A. Ground 1<'1001',

i'inadciaIDist. NunakramgucJa. Hydef1,bad, T(>hHlg~m;.\ ·50()(U2.

PhonE' No. : 040·4812 6666, \Vt'b.'Jite: W\\~'.$pUnd~lllaif1di ll.C()m

Shlt'fll1 cnl orStllndOllonc .Flnancial RUUUfi for 1ht half YNU'/ yea .. ended March J 1,2019

(Rup.'\!:' in million" ,111 1,';', O)fh~l\\ i~'" ~I;\kd) IIalfv('ar enMd Yeat'('IIded

Particulars March 31. 2019 M:ln'h 31. 2018 March 31, 2019 March 31, 2018 Un:lUdited Unlludited Audited Audited

Revenue from Opet'.ltiOlls Interest Income 5.18615 3.4(,() 56 9.914.42 5.730.09 Commission Income 71.J2 22. 44 14759 3975 Nd gain on fair valu~ chal1ge,~ 217115 2991 265.70 42.15 Others 21 16 37.61 35.10 60.75 Total Revl.'nue from operations 5,.t96.28 3,550.52 10,362.81 5,S72.7.t

Other· income 53.59 066 54.27 2.25 Total Income 5.549.87 3.S51.18 10.417.08 5.87.J.?9

F:xpcnscs Financ~ cost 1.860.81 1.405.07 3,564.71 2.317.91 Impaimlent on financial instruments 304.91 (10711) 454. 17 (354.09) Employee benefit expenses 696.25 404.13 1.299.89 75&.71 Depreciation and amortization expense 37.95 31.96 69.19 57.24 Oth~r expenses 196.10 132.71 335.31 26&.01

Total expenses 3,096.02 1,866. 76 5,723.27 3,047.78

Profil befOJ'" la x 2,453.S5 1,68.4.42 .t,693.8t 2,827.21

Tax t'XPCIlSC: Cum:nt tax 3.48 353.46 3,48 573.37 Deferred tax 815.94 193.74 1.602 85 374. 13

Income tax expense 819.42 547.20 1,606.33 9.t7.SO

Profit fOI' the pel'lod 1.634..l3 1.137.22 J.HII7 • .m 1,"7').71

Othel' Comprehensive Income

Items that wiJInot be I'echlssilied subsequently to ,lrofit or loss Re-t11Cilsuremcnt gains;(1osses) on ddintld benefit plaJls (LI2) (\ 66) (3.07) (0.42 ) Income (ax elTcct 0.39 0.58 1.07 0. 14

Itt'IIIS that will be redass(fil'd SII bseq lIenti), to profit or loss Fair Value gain on loan portfolio 688.80 . 688.80 . Income tax dTect (240.69) . 1240.69 ) . Total other comprehensive llIt'ollle for the period 2.ItlU.81 1.13( .. 1·1 3,533.59 l,!I79 . .t.'S

E0I'l1.l11gS per share (equity sh~re, pnr value ofRs.lO each) COl1lpllt~d 011 the basis of tolal prollt for Ih.: period Basic· (Rs.) (EPS) 27.41 24.54 5292 4252 Diluted' CRs. ) lOPS) 27.32 24.53 52.81 J.. 42.51 • EPS tutd DPS 1\.1(111.: hill I" year emkd are not alllllmliscd

l'or and on bchnlf of the B()jlrd II h~H'~\l1 SPAN~A ~PIIOORTY Ff' '1(' L LI:\IITEI>

~ ,~ '. <:'0 l'luc.', Mumb:li 7. ,bJ )f LHlmuju (;uueln'ddy I)all': ~I"y :'24, 2019 ',~ I M I ~ AI',. tt,1\ MUllllghl:.l !)h'~t'iflr

\' :~.~;~'" 9 ~ ~ <:'C~~/ ~ *.~¢:'

SPAl\l)ANA SPHOORTY FINANCIAL LIMITED (ON: U65929TG2003PL(040648)

Rcgd. ()fti~e: Plot No:- 31 & 32, Ramky ScleniulIl Towe,.,., Tower A, Ground Floor,

Financial Dist, Nanllkrmngutla, Ilydembad, Teillngana - 500032.

Phonl' No. : 040-4438 6666, Fit>: No.! 040-4438 66411, 'Veb~lte: "ww.sp,mdanllindia.com

Stllt.ment "fStandalone Illnllncilll Results for the halr yea.·' year ended Mar~h 31 , 2019

Nu~s:

L The above results for the year ended March 31 > 2019 have been reviewed by the Audit Committee and approved by the Board of Directors at their meetings held on May 16, 2019 and May 24, 2019 respectively> in accordance with the requirement of Regulation 52 of the SEBI tListing Obligations and Disclosure Requirements) Regulations, 2015. The above results t()r the year ended lv1arch 31 , 2019 have been audited by the Statutory Auditors of the Company.

2 The Company has adopted Indian Accounting StundardstInd AS) notified under section 133 or the Companies Act 2013 Cthe Act') read with the Companies (Indian Accounting Standards) Rules , 2015 from April 1, 2018 and elTective date of the transition is April 1, 2017. Such transition has been carried out from the erstwhile Accounting Standards under the Act, read with relevant rules issued there under and guidelines issued by Reserve bank of India ('IWI') (collectively referred as "the previous GAAP"). Accordingly, the impact of transition has been recorded in the opening reserves as at April I, 2017 and the corresponding figures presented in these results have been prepared on the basis of previoll"ly published results under prcvious GAAP for the relevant preiod / year, duly restated to Ind AS.

3 As required by the paragraph 32 of Ind AS 10 1: a . Reconciliation of the financia l re1lults to those reported under Previou!I GAAP is summarized as follows:

(R~ m !Vliilipllt'i) Half year ended Year ended

Particulars March 31 , 2018 March 31, 2018

Profit after tax as per previous GAAP 1.298.58 1.7 18.52 Increase / decrease in profit due to : Expected credit loss on financial assets (release) 98.39 728.45 Effective interest rate impact 011 financial assets (51.37) (138 14) Effective interest rate impact on financial liabilities 08.75) (120.46) Re-recoQnition of securitization arranQement (net) 63.01 79.76 Others (0.00) (14.57) Tax Impact of the above adjustments 092.64) (373.85) Profit after tax as per Ind AS 1,137.22 1879.71 Other Comprehensive Income (net of taxes) ( 1.08) (0.28)

Total Comprehensive Income as per Ind AS 1,136.14 1,879.43

b. Reconciliation of Equity (R~ in MiIli(lll$'l

Particulars As of

March 31,2018 Elluily liS ft:llbrted under pn:\"iou~ GAAP 9,H.f2.37 l~\pet.:h:d C:r~ditl\ls$ 011 Ih..: jjlllln~tul m.isl!l!I(rdcasc) ~45 .. '5 Effect ive interest ra te Impucl on tinancial assets (216.6 t) Effective interest rate Hlll'lid on financial liabilities 115.00 l<c-n:clljlnlllOll of securitization iUTIII1!!c::mcn( t nell 79.74 Others !IJJ)~)

R~l:nllnl lh1l) of Deferred Tax Asset 3 .~·10 R~

EIIUih' as rqlOr1cd under Inti AS \4.,906.60 I

- c; ~~'t'~ il ~ORr~ 8~ 1r.~1 \ ,;',(.~." , ./

'-0(;" l'A~\~/

4 RBI conducted mml.U'll in!>pection of the Company fllT FY 18 and shared their concerns vide its letter dated 1vrarch 28, 2019, One of the supervisory concerns mentioned in their letter is that the Company overcharged interest rate violating pricing guidelines prescribed under paragraph 54 of the Master Directions DNBR PD. 008/03.10.119/2016-17 dated September 1,2016, as amended, (the 'Master Directions'). The RBI has further advised the Company to initiate the reftmd process The Company is of the opinion that the pricing of qualifying loans is very much in line with para 54 of the Master Directions. An independent legal opinion has been ()btaincd substantiating that the Company ' s method of detemlining the pricing of qualifying Iv1FI loans is in compliance with the Master Directions The Company is in the procc-')s or submitting its response to the RBI to this effect. Pending the outcome of the Company's submission to the RBI and given that the amotmt required to be reftmded, if any, cannot be measured with sufficient reliability, no provision in this regard has been recorded as at March 31. 2019.

5 During the year ended March 31. 2019, the Company acquired 97.54% stake in Criss Financial Holdings Limited, a non banking finance company registered ",ith Reserve Bank of India. at a purchase consideration of Rs. 625.24 million. Such purchase consideration has been fully discharged in cash.

6 The figures for the last half year arc the balancing figures between audited figures in respect of full financial year and the audited published year to date figures upto the first half year of the financial year.

7 The Company operates in a single business segment i.e. lending to members, having similar risks and returns for the purpose of Ind AS 108 on 'Operating Segments'. The Company operates in single geographic segment. i.e domestic .

P /;Il'C: Mumbai Ollie: MilV 24, 2019

For and on behalf of the Board of DiyQ-ctors of SPANDANA SPHOORTY FINANCIAL IM ITEO

Plld uja Gangircddy Man.a~ing Director