We have audited the accompanying financial statements of Sahara Housingfina Corporation Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2024 the Statement of Profit and Loss (including Other Comprehensive Income), the Statement
of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to the financial statements including a
summary of significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").
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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2024 and its profit, total comprehensive income, cash flows and the changes in equity 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 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
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 opinion.
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 for the year ended March 31, 2024. 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 matter described below to be the key audit matter to be communicated in our report.
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Key audit matter
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How the matter was addressed in our audit
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Impairment of loans (Expected Credit Loss)
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Ind AS 109, Financial Instruments (Ind AS 109) requires the
Company to provide for impairment of its financial assets using
the expected credit loss ('ECL') approach involving an estimation
of probability of loss on such financial assets, considering
reasonable and supportable information about past events,
current conditions and forecasts of future economic conditions
which could impact the credit quality of the Company's financial
assets.
Expected credit loss cannot be measured precisely but can
only be estimated through use of statistics. The estimation of
impairment loss allowance on financial instruments involves
significant judgement and estimates and applying appropriate
measurement principles.
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Our audit focused on assessing the appropriateness of
management's judgment and estimates used in the expected
credit losses through the following procedures, but were not
limited to, the following procedures:
- Examined the Board Policy approving methodologies for
computation of ECL that addresses policies and procedures
for assessing and measuring credit risk on the lending
exposures of the Company in accordance with the requirements
of Ind AS 109.
- The parameters and assumptions used and their rationale
have been documented. Also, obtained the policy on
moratorium and restructuring of loans approved by the Board
of Directors pursuant to the RBI circulars/guidelines and
ensured such policy is in compliant with the requirements of
the RBI circulars/guidelines.
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The expected credit loss is calculated using the estimated
percentage of each of the stages of loan portfolio as per
management judgments and assumptions after approved in
the board.
Significant management judgment and assumptions involved
in measuring ECL is required with respect to:
• determining the criteria for a significant increase in credit
risk
• factoring in future economic assumptions
• past experience and forecast data on customer behaviour
on repayments
• techniques used to determine probability of default, loss
given default and exposure at default.
Considering the significance of the above matter to the
financial statements and since the matter required our
significant attention to test the calculation of expected
credit losses, we have identified this as a key audit matter
for current year audit.
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- Evaluated the design and operating effectiveness of controls
across the processes relevant to ECL, including the judgements
and estimates. These controls, among others, included controls
over the allocation of assets into stages including management's
monitoring of stage effectiveness, model monitoring including
the need for post model adjustments, and completeness of
the underlying data used in the models, credit monitoring,
passing ofjournal entries and preparing disclosures.
- Tested the completeness of loans and advances included
in the Expected Credit Loss calculations as of March 31, 2024
by reconciling it with the balances as per loan balance register.
- Obtained an understanding of the modelling techniques
adopted by the Company including the key inputs and
assumptions.
Assessed the appropriateness and adequacy of the related
presentation and disclosures in the accompanying financial
statements in accordance with the applicable accounting
standards and related RBI circulars and Resolution Framework.
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Non-Integrated Information Systems with Branches
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The company have limited loan portfolio which has been
maintain by Branches and reporting to Head office on Monthly
Basis.
Each Branch kept its records on its own record maintenance
systems which is not integrated with the Head office. Each
collections received from customer has properly maintain in
there systems and reported periodically to the Head office.
The company have Information technology (IT) systems at its
head office to keep Customer wise loan portfolio but it doesn't
integrate Branches, all the inputs from the branches are
received by reporting systems and are maintain in Head office.
There is chances of data communication transit differences
in the branches with head office and create delayed/error in
transferring information.
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Our Audit observation on the key audit matter relating to non¬
integration of IT systems with the branches is as follows:
a) In our audit procedure we are directly communicate with
the respective branch manager and confirm the information
provided by them are recorded correctly.
b) We ensure that there should be regular periodical reporting
from the branches has been taken by respective head
office by responsible officer and query raised by head
office has been resolved on time basis.
c) We Ensure that the data maintain in the information system
by head office has been updated as per the information
provided by branches and verified it by following audit
procedure.
We also evaluated the design and tested the operating
effectiveness of key automated controls within various operating
processes. Where deficiencies were identified, tested
compensating controls or performed alternative procedures.
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Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors are responsible for preparation of the other information. The other information comprises the
information included in the Board's Report and its annexures, but does not include the 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.
Our opinion on the financial statements does not cover the other information 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.
When we read the other information, if we conclude that there is material misstatement therein, 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 at this moment.
Management's Responsibility for the Financial Statements
The Company's Board of Directors are 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 including other comprehensive
income, cash flows and changes in equity of the Company in accordance with the Ind As and the 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 the assets of the Company 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, the Board of Directors are responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable to the Company, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but
to do so.
The Board of Directors are also responsible for overseeing the Company'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 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 financial
statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism 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 controls.
• Obtain an understanding of internal financial controls 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 with reference to the 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 Board of Directors.
• Conclude on the appropriateness of Board of Directors' 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 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.
• 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 financial statements 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 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 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 to the Company, 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 for the financial year ended March 31, 2024 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.
Report on Other Legal and Regulatory Requirements
1. 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 Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable to the Company.
2. As required by Section 143(3) of the Act, 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, 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;
c) the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows
and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards (Ind AS) specified under
Section 133 of the Act, as applicable to the Company;
e) 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, 2024 from being appointed as a director in terms of Section 164(2) of the
Act;
f) with respect to the adequacy of the internal financial controls with reference to these financial statements and the operating
effectiveness of such controls, refer to our separate Report in Annexure "B" to this report;
g) with respect to the other matters to be included in the Auditor's Report under 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 Managerial Remuneration
paid by the Company during the year 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 the explanations
given to us:
i. The Company has disclosed the impact of the pending litigations on its financial position in the financial statements -
Refer Note 36.1 to the financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable
losses if any, on long term contracts. The Company did not have any derivative contracts.
iii. There was no amount outstanding as at March 31,2024 which was required to be transferred to the Investor Education
and Protection Fund by the Company.
iv. Based on such audit procedures that we have considered reasonable and appropriate in the circumstances, nothing
has come to our notice that has caused us to believe that any funds have been advanced or loaned or invested by
the company in any "Intermediaries", with the understanding, that the Intermediary shall, lend or invest on behalf of
the company or provide any guarantee or security on its behalf. Also no funds have been received by the company
from any entities ("Funding Parties"), with the understanding that the company shall lend or invest in other entities on
behalf of the funding party.
v. The Company has not declared or paid any dividend for/during the year.
vi. The company is in the process of installing Audit Trail feature in the new software, Consequently, we are unable to
comment on above compliances during the year.
For B.M. CHATURVEDI & Co.
Chartered Accountants
ICAI FRN: 114317W
(Anmol Sonawane)
Partner
Place : Mumbai ICAI MN. 603614
Date : May 29, 2024 UDIN :24603614BKGTVN1465
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