• i. Applicability The policy and procedure so mentioned hereunder, after approval by the Board of Directors of the Company (“Board”), shall be applicable from November 01, 2022.
• ii. Governance (a) The responsibility for oversight and ensuring that the appointment of statutory auditors meets the requisite statutory and regulatory standards as well as the stipulations under this policy vests with the Board and Audit Committee of the Board. (b) The Board and Audit Committee of the Board shall monitor and assess the independence of the auditors and ensure that there is no conflict of interest position in terms of relevant regulatory provisions, standards, and best practices. The Board at their discretion may hold separate and exclusive meetings with the Statutory Auditors to ensure that they are able to function and carry out their obligations freely and without hindrance and also obtain feedback on their interim or final findings.
• iii. Eligibility criteria for Statutory Auditors a) SAs should fulfill all eligibility criteria as prescribed by RBI from time to time through various circulars and guidelines. b) To be eligible for appointment as Statutory Auditors, the audit firm will need to fulfill requirements as explicitly specified in Annexure 1 to the RBI Guidelines in regard to the number of full-time partners, number of full-time partners with FCA accreditation, minimum audit experience of the firm, number of professional staff, number of CISA/ISA qualified partners/paid CAs, etc. as scaled to the asset size of the Company as on March 31 of the previous year. c) The partners, paid chartered accountants and professional staff should meet the minimum requirements of continuous association with the audit firm as specified. d) The audit firm to be appointed as SA for the Company shall be duly qualified for appointment as auditor of a company in terms of Section 141 of the Companies Act, 2013. e) The audit firm should not be under debarment by any Government Agency, National Financial Reporting Authority (NFRA), the Institute of Chartered Accountants of India (ICAI), RBI or Other Financial Regulators. f) The appointment of SCAs/SAs will be in line with the ICAI’s Code of Ethics/any other such standards adopted and does not give rise to any conflict of interest. g) The Audit firm should have the capability and experience in deploying Computer Assisted Audit Tools and Techniques (CAATTs) and Generalized Audit Software (GAS), commensurate with the degree and complexity of the computer environment of the Company in order to achieve audit objectives. h) The audit firm should comply with the eligibility criteria at the time of commencement of the statutory audit and will strive to adhere to the eligibility criteria on a continuous basis. The audit firm will be obliged to inform Company of their continued compliance.
• iv. Independence criteria for Statutory Auditors and issues of conflict of interest a) The Board after the recommendation of the Audit Committee of the Board, will assess, at the time of appointment and every year thereafter, the eligibility and independence of the auditors and any conflict of interest in terms of relevant regulatory provisions, standards, and prevalent best practices. Any concerns are to be flagged by the Board of the Company and to the Senior Supervisory Manager (SSM)/ Regional office of RBI. b) The Board and Audit Committee of the Board to consider assignments being done by the SA for Related Party entities, both before and after the appointment of SA, where exposure and value of Related Party transactions are significant. c) No non-audit assignment as mentioned in section 144 of the Companies Act 2013, which may create a conflict of interest, should be awarded to SAs during the course of their tenure as SAs. d) The time gap between any non-audit works (services mentioned in Section 144 of the Companies Act, 2013, Internal assignments, special assignments, etc.) by the SAs for the Company or any audit/non-audit works for its group companies (RBI-regulated entities) should be at least one year, before or after its appointment as SAs. However, during the tenure as SA, an audit firm may provide such services to the concerned Entities which may not normally result in a conflict of interest, and Entities may take their own decision in this regard, in consultation with the Board and Audit Committee of the Board. This restriction shall apply to an audit firm under the same network of audit firms or any other audit firm having common partners.
• v. Adherence to professional standards by Auditors a) The SAs shall be strictly guided by the relevant professional standards in the discharge of their responsibilities with the highest diligence. Any negligence is to be reported by the Board to RBI after a yearly assessment. b) In case of any concern with the Management such as non-availability of information/non- cooperation by the Management, which may hamper the audit process, the SCAs/SAs shall approach the Board of the Entity, under intimation to the concerned SSM/RO of RBI.
• vi. Number of Auditors to be appointed a) The Company to appoint such number of SAs as prescribed by the Companies Act, 2013, RBI from time to time, through its various circulars and guidelines, subject to approval and recommendation from the Board and Audit Committee of the Board b) The Company shall ensure that both minimum and maximum numbers of SAs appointed are within the limits set by RBI from time to time. Accordingly, based on the current circular, on achieving an Asset size of over Rs. 15,000 crs, the Company shall appoint a minimum of two SAs firm for conducting its joint statutory audit.
• vii. Tenure and rotation policy a) An Audit firm can continue to be appointed as SA for three years subject to the firm satisfying the eligibility criteria for each year. The same audit firm cannot be reappointed by the Company for the next two terms of 3 years each. b) In the event of the Company needing to remove the SAs before the completion of three years tenure, the Company shall inform concerned SSM/Central Office of RBI, Department of Supervision (NBFCs) about it, along with reasons/justification for the same, within a month of such a decision being taken. c) A group of audit firms having common partners and/or under the same network, will be considered as one entity and they will be considered for allotment of SA accordingly. Shared/Sub-contracted audit by any other/associate audit firm under the same network of audit firms is not permissible. The incoming audit firm shall not be eligible if such audit firm is associated with the outgoing auditor or audit firm under the same network of audit firms.
• viii. Remuneration and expenses a) Section 142 of the Companies Act prescribed that the remuneration of the auditor of a Company shall be fixed in its general meeting or in such manner as may be determined by the Board and Audit Committee of the Boardin consultation with the statutory auditor. b) Remuneration of Auditor includes the expenses, if any, incurred by the auditor in connection with the audit of the Company and any facility extended to him c) Remuneration of the Auditor does not include any remuneration paid to him for any other services (mentioned in section 144 of the Companies Act) rendered by him at the request of the company. d) The audit fees for the Statutory Auditor shall be reasonable and commensurate with the scope and coverage of the audit. e) The Company shall disclose by way of notes, additional information regarding the aggregate expenditure of the following items:- Payments to the auditor as • Auditor • For Taxation matters • For Company law matters • For other services • For Reimbursement of expenses
• ix. Procedure for appointment and reappointment a) The Board and Audit Committee of the Board shall take into account the relevant factors such as size and spread of assets, accounting and administrative units, complexity of transactions, level of computerization, availability of other independent audit inputs, identified risks in financial reporting, etc. for shortlisting the eligible audit firms. b) The Company shall place the name of shortlisted audit firms, in order of preference, before the Board and Audit Committee of the Board and the Board and Audit Committee of the Board shall shortlist and recommend a minimum of 2 (two) audit firms for every vacancy for selection of SAs so that even if the firm at first preference is found to be ineligible/refuses appointment, the firm at second preference can be appointed and the process of appointment of SAs does not get delayed. c) The Company shall obtain an eligibility criteria certificate, duly signed and authenticated by the main partner/s of the audit firm who are proposed to be appointed as SA, to the effect that each audit firm complies with all the eligibility norms prescribed by RBI as prescribed in Form B of the guidelines (Annexure 3) and also a confirmation that the audit firm adheres to the prescribed limit of conducting a statutory audit of only a maximum number (as prescribed by RBI) of NBFCs during a particular year, including the Company’s audit. d) While the overall onus of the audit firm fulfilling eligibility criteria as prescribed by RBI in Annex I or as may be amended from time to time, for audit of the Company as per RBI guidelines rests with the audit firm, the Company shall also verify, through reasonable means, their compliance with the eligibility norms, prescribed by RBI. e) Upon appointment of SAs, the Company shall inform RBI every year, in prescribed FORM A (Annexure 2), of appointment / confirming eligibility of SAs within such timeframe as may be prescribed. f) In the event of any extraordinary circumstance after the commencement of the audit, like the death of one or more partners, employees, etc., which makes the firm ineligible with respect to any of the eligibility norms, the Company will promptly seek the approval of the RBI to allow the concerned audit firm to complete the audit, as a special case. In such an event, the Company, subject to the approval of its Board, may also consider the substitution of the Audit firm with another Audit firm that fulfills all eligibility criteria and report the same to the Reserve Bank with justification.
• x. Review of performance of Statutory Auditors by the Board a) The Board and Audit Committee of the Board of the Company shall review the performance of SA on an annual basis. The Statutory Auditors continuing to fulfill the eligibility criteria and have not been assessed as negligent will be eligible for continuance subject to policy regarding tenure and rotation. Any serious lapses/negligence in Audit responsibilities or conduct of issues on part of the SAs or any other matter considered relevant shall be reported to RBI within two months from the completion of the annual audit. b) In concurrence of above, every year during the month of April or May the Board should meet and review the performance of the SAs and give requisite approval, if required, for reporting any serious lapses by SAs to RBI,within the required timeframe which is two months from completion of the audit
• xi. Regulatory Reporting a) The Company will inform RBI about the appointment of SAs, by way of a certificate in Form A (Annexure 2) as prescribed by RBI, within one month of such appointment and the Board to assess the eligibility of the SA on a yearly basis and to submit a certificate in FORM A to this effect to the RBI within 30 days of the Annual General Meeting of the Company.
• xii. Compliance under the Companies Act, 2013. a) The Company shall ensure that it complies with requisite provisions as mentioned under the Companies Act 2013, and in case of any conflict among guidelines issued by RBI or any other regulatory authority and provisions of Companies Act 2013, it will take a conservative approach and follow the stricter regulation/provisions. b) Eligibility, qualifications, and disqualification of SAs shall also follow provisions of the Companies Act 2013, which allows a firm to be appointed as SAs. c) The written consent, and a certificate from the auditor or auditors to such appointment, shall be in accordance with the conditions as prescribed by applicable regulations from time to time. d) The Company shall inform the auditor / firm concerned of his or its appointment, and also file a notice of such appointment with the Registrar in such manner as may be prescribed under the Companies Act, 2013.
• xiii. Validity of this policy: This policy is valid from November 01, 2022, and will be reviewed annually.

For Si Creva Capital Services Private Limited