We have audited the accompanying Standalone Financial
Statements of LIC Housing Finance Limited (hereinafter
referred to as "the Company”), which comprise the Standalone
Balance Sheet as at March 31, 2025, the Standalone Statement
of Profit and Loss (including Other Comprehensive Income),
the Standalone Statement of Changes in Equity and Standalone
Cash Flow Statement for the year then ended, and notes to
the Standalone 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 Standalone
Financial Statements give the information required by the
Companies Act, 2013, as amended (hereinafter referred to as
"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 from time to
time (hereinafter referred to as "Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31, 2025, its profit including other
comprehensive income, changes in equity and its cash flows for
the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the Standalone Financial Statements
in accordance with the Standards on Auditing ("the SAs”)
specified under sub-section (10) of section 143 of the Act.
Our responsibilities under those SAs are further described in
the Auditors' Responsibilities for the Audit of the Standalone
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 ("the ICAI”)
together with the ethical requirements that are relevant to
our audit of the Standalone Financial Statements under the
provisions of the Act and the Rules there under, 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 we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the
Standalone Financial Statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Standalone Financial Statements for the financial year ended
March 31, 2025. These matters were addressed in the context
of our audit of the Standalone Financial Statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided
in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report
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Key Audit Matters
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Auditors’ Response
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Expected Credit Loss - Impairment of carrying value of loans
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We performed audit procedures set out below.
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and advances.
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• We understood and assessed the Company's accounting
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Assessment of impairment loss allowance on Expected Credit
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policies for impairment of financial assets and their
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loss (ECL) on Loans (Refer Note 35.4.2.4 of the financial
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compliance with Ind AS 109 and the governance framework
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statements)
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approved by the Board of Directors pursuant to Reserve
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Under Ind AS 109, Expected Credit Loss (ECL) is required to be
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Bank of India guidelines.
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determined for recognising impairment loss on financial assets
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• • We evaluated the design and operating effectiveness
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which are stated at amortised cost i.e., the loan portfolio of the
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of controls across the processes relevant to ECL, including
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Company. The calculation of impairment loss or ECL is based on
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the management judgements and estimates, related
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significant management judgement which includes estimation
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assumptions including factors that affect the PD, LGD and
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of probability-weighted loss on financial instruments over their
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EAD and the Company's process on timely recognition of
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life and considers the reasonable and supportable information
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impairment in the loan portfolios which included assessing
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about historical default and loss ratios, current conditions and,
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the accuracy of the system generated reports on defaults
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to the extent possible, forward-looking analysis which could
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and ageing.
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impact the credit quality of the Company's loans and advances.
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• We tested the completeness of loans and advances
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The significant areas in the calculation of ECL where management
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included in the Expected Credit Loss calculations as of
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estimates and judgements are required as under:
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March 31, 2025, by reconciling it with the balances as per
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Key Audit Matters
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Auditors’ Response
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looking analysis which could impact the credit quality of the
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loan balance register and loan commitment report as on that
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Company's loans and advances.
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date..
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Judgements about credit risk characteristics, taking into account
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• We tested assets in stage 1, 2 and 3 on sample basis to
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class of borrowers, credit risk ratings, date of initial recognition,
remaining term to maturity, property valuations, time taken for
recovery of stressed loans, industry scenario and other relevant
factors for collective evaluation of impairment under various
stages of ECL.
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verify that they were allocated to the appropriate stage.
Assessed the criteria for staging of loans based on their
past-due status to check compliance with requirement of
Ind AS 109. Tested a sample of performing (stage 1) loans
to assess whether any SICR or loss indicators were present
requiring them to be classified under higher stages.
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1. Loan staging criteria.
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• Tested samples to ascertain the completeness and
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2. Calculation of probability of default and loss given default.
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accuracy of the input data used for determining the PD and
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3. Consideration of probability weighted scenarios and forward
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LGD rates and agreed the data with underlying books of
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looking macro-economic factors impacting credit quality of
receivables.
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accounts and records.
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4. For Project loans, assessment based on a borrower's financial
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• We performed an overall assessment of the ECL provision
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performance, solvency, liquidity, industry outlook etc.
The Company has also recorded a management overlay as part
of its ECL. Management overlay is based on various uncertain
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levels at each stage including management's assessment
and provision on account of Company's portfolio, risk
profile, credit risk management practices.
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variables, which could result in actual credit loss being different
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• Management's controls over authorization and calculation
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than that being estimated.
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of management overlays.
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In view of the high degree of management's judgement
involved in estimation of ECL and the overall significance of
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• Assessed disclosures included in the standalone financial
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the impairment loss allowance to the standalone financial
statements, it is considered as a key audit matter.
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statements in respect of expected credit losses.
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IT Systems and controls
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With the assistance of IT specialist, we have obtained-
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The Company is dependent on its Information Technology ("IT”)
systems due to the significant number of transactions that are
processed daily across such multiple and discrete IT systems.
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(a) an understanding of the Company's information processing
systems, IT General Controls and automated IT controls for
applications, databases and operating systems relevant to
our audit.
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Also, IT application controls are critical to ensure that changes
to applications and underlying data are made in an appropriate
manner and under controlled environments. Any gaps in the
IT control environment could result in a material misstatement
of the financial accounting and reporting records. Appropriate
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(b) Also, obtained an understanding of the changes that were
made to the IT applications during the audit period;
(c) Also, performed following procedures:
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controls contribute to mitigating the risk of potential fraud or
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(i) tested the IT General Controls around user access
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errors as a result of changes to applications and data.
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management, changes to IT environment and
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On account of the pervasive use of its IT systems, the testing of
the general computer controls of the IT systems used in financial
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segregation of duties around program maintenance
and security administration relating to key financial
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reporting was considered to be a Key Audit Matter.
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accounting and reporting processes.
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(ii) Tested the Company's periodic review of access rights.
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We also tested requests of changes to systems for
approval and authorization; and
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(iii) Tested the automated controls like interfaces,
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configurations and information generated by the
entity's information processing systems for loans,
borrowings, deposits, interest income, interest expense
and other significant financial statement items.
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INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITORS’ REPORT
THEREON
The Company's Board of Directors are responsible for the
preparation of the other information. The other information
comprises the information included in the Annual Report but
does not include the Standalone Financial Statements and our
auditors' report thereon. The other information is expected to
be made available to us after the date of this auditors' report.
Our opinion on the Standalone 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 Standalone Financial
Statements, our responsibility is to read the other information
identified above when it becomes available and, in doing
so, consider whether such other information is materially
inconsistent with the Standalone Financial Statements or our
knowledge obtained in the audit, or otherwise appears to be
materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact.
RESPONSIBILITIES OF MANAGEMENT AND THOSE
CHARGED WITH GOVERNANCE FOR THE STANDALONE
FINANCIAL STATEMENTS.
The Company's Board of Directors are responsible for the
matters stated in sub-section (5) of Section 134 of the Act
with respect to the preparation of these Standalone Financial
Statements that give a true and fair view of the financial position,
financial performance, other comprehensive income, changes in
equity and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section
133 of the Act. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions
of the Act for safeguarding of 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 Standalone Financial Statements that give
a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the Standalone Financial Statements, Management
and Board of Directors are responsible for assessing the
Company'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 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.
AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF
THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the Standalone 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 Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
Standalone Financial Statements.
As part of an audit in accordance with Standards on Auditing,
we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
i. I dentify and assess the risks of material misstatement of
the Standalone 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.
ii. Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under the
section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has
adequate internal financial controls system with reference
to Standalone Financial Statement in place and the
operating effectiveness of such controls.
iii. Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by the Management.
iv. Conclude on the appropriateness of Management's 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 ability of the Company 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 Standalone
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 Company to cease to continue as a going concern.
v. Evaluate the overall presentation, structure and content
of the Standalone Financial Statements, including the
disclosures, and whether the Standalone Financial
Statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone
Financial Statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably
knowledgeable user of the Standalone Financial Statements
may be influenced. We consider quantitative materiality and
qualitative factors (i) in 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 Standalone
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, 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 Standalone Financial Statements
of the financial year ended March 31, 2025 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 the Companies (Auditor's Report) Order,
2020 ("the Order”) issued by the Central Government
of India in terms of sub-section (11) of Section 143 of the
Act, we give in "Annexure A”, a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. 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 were necessary for the purposes of our audit;
b. I n our opinion proper books of account as required
by law have been kept by the Company so far as
appears from our examination of those books except
for the matters stated in paragraph 2(i)(vi) below on
reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014
c. The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss (including Other
Comprehensive Income), the Standalone Cash Flow
Statement and Standalone Statement of Changes
in Equity dealt with by this Report are in agreement
with the books of account;
d. In our opinion, the aforesaid Standalone Financial
Statements comply with the Indian Accounting
Standards specified under Section 133 of the Act;
e. On the basis of written representations received
from the directors as on March 31, 2025 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;
f. The modifications relating to the maintenance of
accounts and other matters connected therewith are
as stated in the paragraph 2(b) above on reporting
under Section 143(3)(b) of the Act and paragraph
2(i)(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financial
controls with reference to Standalone Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate
report in "Annexure B”;
h. With respect to the other matters to be included
in the Auditor's 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 remuneration paid by the Company to its
directors during the year is in accordance with the
provisions of Section 197 of the Act.
i. 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, 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
pending litigations on its financial position
in its Standalone Financial Statements -
Refer Note No. 38(a) to the Standalone
Financial Statements.
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor, Education and Protection Fund
by the Company.
iv. a. The Management has represented that,
to the best of its knowledge and belief,
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 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, whether, directly or indirectly lend or
invest in other persons or entities identified
in any manner whatsoever by or on behalf
of the Company ("Ultimate Beneficiaries”)
or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
Company have proposed final dividend 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 of dividend.
b. The Management has represented that
to the best of its knowledge or belief, no
funds have been received by the Company
from any person(s) or entity(ies), including
foreign entities ("Funding Parties”), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, whether, 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 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
(i) and (ii) of Rule 11(e) as provided under
sub-clause (a) and (b) above contain any
material misstatement.
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. As stated
in Note No. 44 to the Standalone financial
statements, the Board of Directors of the
vi. Based on our examination which included
test checks, the Company has used various
accounting software for maintaining its
books of account, which have the feature of
recording audit trail (edit log) facility and the
same has operated throughout the year for all
relevant transactions recorded in the respective
software at application and database level
except for three accounting software where
audit trail feature at database level was enabled
during the first quarter of the financial year
and for one accounting software audit trail
feature at database level was enabled from
13th February 2025.
Further, for the periods where audit trail (edit log) facility was
enabled and operated throughout the year for the respective
accounting software, we did not come across any instance of
the audit trail feature being tampered with.
The Company has preserved the audit trail in compliance with
statutory requirements for record retention since the audit trail
was enabled for the respective software.
For SGCO & Co. LLP For Khandelwal Jain & Co.
Chartered Accountants Chartered Accountants
Firm Registration Number: 112081W/W100184 Firm Registration Number: 105 049W
Suresh Murarka S. S. Shah
Partner Partner
Membership Number: 044739 Membership Number: 033632
UDIN: 25044739BMLAKY4188 UDIN: 25033632BMMJUM4943
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