1. We have audited the accompanying Standalone Financial Statements of GIC HOUSING FINANCE LIMITED (“the Company”),which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other ComprehensiveIncome), the Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and notes to theStandalone Financial Statements, including a summary of the material accounting policies and other explanatory information,(hereinafter referred to as ‘the Standalone Financial Statements’).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid StandaloneFinancial Statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner sorequired and give a true and fair view in conformity with the accounting principles generally accepted in India, of the stateof affairs of the Company as at March 31, 2025, and its profit including other comprehensive income, its cash flows and thechanges in equity for the year ended on that date.
BASIS FOR OPINION
2. We conducted our audit of the standalone 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’sResponsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together withethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Actand the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements andthe Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion on the standalone financial statements.
KEY AUDIT MATTERS
3. Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of theStandalone Financial Statements for the financial year ended March 31, 2025. These matters were addressed in the contextof our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. For each matter below, our description of how our audit addressed the matter is providedin that context. We have determined the matters described below to be the key audit matters to be communicated in ourreport.
Key Audit Matter
How the matter was addressed in our audit
Expected Credit Loss - Impairment of carryingvalue of the loans and advances.
Under Ind AS 109, Expected Credit Loss (ECL)is required to be determined for recognisingimpairment loss on financial assets which arestated at amortised cost or carried at fair valuethrough other comprehensive income.
The calculation of impairment loss or ECL isbased on significant management estimates andjudgments, which are as under:
• Judgements about credit risk characteristicsfor collective evaluation of impairmentunder various stages of ECL.
• Loan staging criteria.
We performed audit procedures set out below:
• Read the Company’s Board approved Ind AS 109 based impairmentprovisioning methodology and estimates policy.
• Understood and assessed the Company’s process and controls onmeasurement and recognition of impairment in the loan portfolio.
• Test checked loans in stage 1,2 and 3 to ascertain that they wereallocated to the appropriate stage.
• Test checked PD and LGD calculation workings performed bymanagement, including testing data used in assessment andevaluation of whether the results support appropriateness of thePDs at portfolio level.
• Test checked the calculation of determining Exposure at Default(EAD).
• Consideration of probability scenarios andforward looking macro-economic factors.
• Model estimates - Inherently judgmentalmodels are used to estimate ECL whichinvolves determining Probabilities ofDefault (‘PD’), Loss Given Default (‘LGD’),and Exposures at Default (‘EAD’).
ECL requires a large variety of data as aninput to the model. This increases the risk ofcompleteness and accuracy of the data that hasbeen used to create assumptions in the model.
In our opinion this is considered as a Key AuditMatter in view of the criticality of the item tothe Standalone Financial Statements and thecomplex nature of assumptions and judgmentsexercised by the management.
• Test checked basis of collateral valuation in the determination ofECL provision.
• Performed an assessment of the ECL provision levels at each stageto determine if they were reasonable considering the Company’sportfolio, risk profile, credit risk management practices and themacroeconomic environment.
IT System and controls
The Company’s financial accounting and reportingsystem are highly dependent on the effectiveworking of the operating and accounting system.
The Company has separate software applicationfor loan management / servicing and accounting.Transfer of data from / to these software arecritical for accurate compilation of financialinformation.
Due to extensive volume, variety and complexityof transactions, the operating system isfunctioning consistently and accurately,specifically with respect to following:
• Interest, Fee income and other chargescollected on loans.
• Bifurcation of the loan portfolio based onmaturity pattern and Assets Classificationbased on aging of default.
• Various Reports generated, including thereport for Asset Classification and Provision.
We have identified ‘IT system and controls’ askey audit matter because of significant use of ITsystem and the scale and complexity of the ITarchitecture.
We have carried out the following procedures to verify the effectiveness
of IT Controls:
• We obtained an understanding of the Company’s business ITenvironment and key changes, if any during the audit period thatmay be relevant to the audit.
• Our audit procedures included verifying, testing and reviewingthe design and operating effectiveness of the key automated andmanual business cycle controls and logic for system generatedreports relevant to the audit by verifying the reports / returnsand other financial and non-financial information generated fromthe system on a test check basis.
• We have tested and reviewed the reconciliations between the loanorigination / servicing application and the accounting softwareto mitigate the risk of incorrect data flow to / from separateapplication software.
• We have also obtained management representations whereverconsidered necessary.
4. The Company’s management and Board of Directors are responsible for the preparation of other information. The otherinformation comprises the information included in the Annual Report but does not include the Standalone FinancialStatements, Consolidated Financial Statements and our auditor’s report thereon. The other information is expected to bemade available to us after the date of this audit report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any formof assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other informationidentified 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 during the course of our audit or otherwise appearsto be materially misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required tocommunicate the matter to those charged with governance and review the steps taken by the management to communicatewith those in receipt of the other information, if previously issued, to inform them of the revision.
5. The Company’s management and Board of Directors are responsible for the matters stated in Section 134(5) of the CompaniesAct, 2013 (“the Act”) with respect to the preparation of these Standalone Financial Statements that give a true and fairview of the financial position, financial performance, other comprehensive income, changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in India, including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015, asamended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selectionand 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 forensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of theStandalone Financial Statements that give a true and fair view and are free from material misstatement, whether due tofraud or error.
In preparing the Standalone Financial Statements, the management and Board of Directors are responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the management either intends to liquidate the Company or to cease operations,or has no realistic alternative but to do so.
Those charged with governance are also responsible for overseeing the company’s financial reporting process.
6. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are freefrom 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 SAswill always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
7. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud 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 controls relevant to the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible forexpressing our opinion on whether the company has adequate internal financial controls system with reference to thestandalone 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 relateddisclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significantdoubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, weare required to draw attention in our auditor’s report to the related disclosures in the Standalone Financial Statementsor, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtainedup to the date of our auditor’s report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including thedisclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in amanner that achieves fair presentation.
Materiality is the magnitude of misstatement in the standalone financial statement that, individually or in aggregate, makesit probable that the economic decision of the reasonably knowledgeable user of the Standalone Financial Statements maybe influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and inevaluating the result of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit 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 requirementsregarding independence, and to communicate with them all relationships and other matters that may reasonably be thoughtto 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 mostsignificance in the audit of the Standalone Financial Statements of the financial year ended March 31, 2025 and are thereforekey audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefitsof such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
8. As required by Companies (Auditor’s Report) Order 2020 (“the Order”) issued by Central Government of India in terms ofsub section (11) of Section 143 of the Companies Act 2013, we give in “Annexure I” a statement on the matters specified inparagraph 3 and 4 of the Order.
9. 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 werenecessary 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 fromour examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement ofChanges in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books ofaccount.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS)specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by theBoard of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director interms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements ofthe Company and the operating effectiveness of such control, refer to our separate Report in “Annexure II”.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section197 (16) of the Act, as amended, in our opinion and to the best of our information and according to the explanationsgiven to us, the remuneration paid by the Company to its directors, including sitting fees paid to directors, during theyear is in accordance with the provisions of section 197 read with Schedule V of the Act.
(h) 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 theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone FinancialStatements - Refer Note 41 to the Standalone Financial Statements.
ii. The Company did not have any long term contracts including derivatives for which there were any materialforeseeable losses.
iii. There has been no delays in transferring amounts required to be transferred to the Investor Education & ProtectionFund by the Company.
iv. (a) The management has represented that, to the best of it’s knowledge and belief, as disclosed in the notes to
the accounts (refer note 45 (x) (i) to the Standalone Financial Statements), no funds have been advancedor loaned or invested (either from borrowed funds or share 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 (“Intermediaries”),with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly orindirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalfof the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of theUltimate Beneficiaries;
(b) The management has represented, that, to the best of it’s knowledge and belief, as disclosed in the notesto the accounts (refer note 45 (x)(ii) to the Standalone Financial Statements), no funds have been receivedby the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with theunderstanding, whether recorded in writing or otherwise, that the company shall, whether, directly orindirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of theUltimate Beneficiaries;
(c) Based on such audit procedures that were 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 (a)and (b) contain any material mis-statement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year
is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. Asstated in note 42 the Standalone Financial Statements, the Board of Directors of the Company have proposed finaldividend for the year, which is subject to the approval of the members at the ensuing Annual General Meeting.The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration ofdividend.
vi. On the basis of information and explanations given to us and based on our examination which included test
checks, the company has used an accounting software for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevanttransactions recorded in the software. Further, during the course of our audit we did not come across anyinstance of audit trail feature being tampered with and the audit trail has been preserved by the company as perthe statutory requirements for record retention.
For and on behalf of
Chandabhoy & Jassoobhoy
Chartered AccountantsFirm Registration No. 101647W
Partner
(Membership No.: 049289)UDIN: 25049289BMKVTT6247
Date: May 16, 2025Place:Mumbai