Piramal Capital & Housing Finance Ltd Auditor Reports

To the Members of Piramal Capital & Housing Finance Limited Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of Piramal Capital & Housing Finance Limited (‘the Company?), which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.

2. 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 (‘the Act?) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS?) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, the relevant circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time (RBI Guidelines?) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor?s 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 (‘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 thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Principal Business Criteria

4. We draw attention to note 53 (b) to the accompanying standalone financial statements, which describes that the Board of Directors has approved conversion of the Company from a Housing Finance Company (HFC) to Non-Banking Financial Company-Investment and Credit Company (NBFC-ICC) in its meeting held on 8 May 2024, consequent to the Company not meeting the regulatory requirement prescribed under paragraph

5.3 of Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 (‘RBI Directions?) with respect to the Principal Business Criteria (‘PBC?) for HFCs. The Company expects to submit the conversion application to the RBI along with necessary documents as required under the said RBI Directions in near future.

Our opinion is not modified in respect of this matter.

Emphasis of Matter - Business Combination - Presentation of specified financial assets

5. We draw attention to Note 42B to the accompanying standalone financial statements which states that the Company has disclosed Rs. 312,188 lakhs as fair value adjustment under Other non-financial liabilities? in line with the presentation prescribed in the National Company Law Tribunal (‘NCLT?) order dated 7 June 2021 in respect of assets and liabilities acquired by the Company through the Corporate Insolvency Resolution Process of Dewan Housing Finance Corporation Limited (‘DHFL?), which is different from the presentation requirements of Ind AS 32, Financial Instruments Presentation, that requires such fair value adjustments to be netted off with the gross book value of corresponding assets.

Key Audit Matters

6. Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. 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.

7. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
Expected Credit Loss allowance on financial assets
Refer note 2(iv) for material accounting policy information and note 47.4 for financial disclosures in the accompanying financial statements.	Our audit focused on assessing the appropriateness of the models used including management?s judgment and estimates used in the expected credit loss assessment through procedures that included, but were not limited to, the following:
As at 31 March 2024, the Company has reported gross loan assets of Rs. 5,479,483 lakhs against which an impairment loss allowance of Rs. 636,892 lakhs has been recognised based on the Expected Credit Loss (“ECL”) approach as laid down under Ind AS 109 - Financial Instruments? (Ind AS 109). The estimation of ECL on financial assets is complex and involves significant management judgement and estimates, including the following:
	• Considered the Companys accounting policies for expected credit loss of financial assets and assessed compliance of the policies in terms of Ind AS 109.
	• Understood management?s processes, systems and controls implemented in relation to ECL allowance process. Evaluated the design and tested the operating effectiveness of key internal financial controls over such process.
• Models used to estimate ECL are inherently judgmental with high estimation uncertainty which involves determining Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD).	• Assessed the governance framework over validation and implementation as per approval from Board of Directors.
	• Obtained an understanding of the models adopted by the Company including the key inputs and assumptions. Since modelling assumptions and parameters are based on historical as well as external data, we assessed whether the same were relevant and representative of current circumstances.
• Completeness and accuracy of the data from internal and external sources used in the models.
• Ind AS 109 requires the Company to measure ECLs on a forward-looking basis reflecting future economic conditions. Significant management judgement is applied in determining the economic scenario used and probability weights applied to them.
	• Assessed the critical assumptions and input data used in the estimation of expected credit loss for specific key credit risk parameters, such as the classification of loan assets into stages as described in the accounting policy, Exposure at default (EAD), probability of default (PD) or loss given default (LGD);
• Qualitative adjustments are made by the Management to the results obtained from ECL models to address any identified
impairment or emerging trends as well as risks not captured by models. These adjustments are inherently subjective and significant management judgement is involved in estimating these amounts.	• On sample basis tested the completeness and accuracy of the input data used for determining the PD and LGD rates and agreed the data with the underlying books of accounts and records;
• In respect of purchased or originated credit impaired financial assets, cumulative changes, at the portfolio level, in lifetime expected credit losses since initial recognition are recognised as a loss allowance. Significant management judgement is applied to assess such changes.	• Evaluated whether the methodology applied by the Company is compliant with the requirements of the relevant accounting standards and confirmed that the calculations are performed in accordance with the approved methodology, including mathematical accuracy of the workings;
The disclosures prescribed under Ind AS 107 and RBI directives is also an area of focus for the management and auditors. Considering the significance of ECL to the overall financial statements and the degree of management?s estimates and judgments involved in this matter that requires significant auditor attention, we have considered expected credit loss allowance on financial assets to be a key audit matter.	• Assessed the appropriateness and adequacy of the related presentation and disclosures made in the accompanying financial statements in accordance with the applicable accounting standards and related RBI circulars and guidelines.
Information Technology (IT) systems and controls impacting financial reporting
The IT environment of the Company is complex and involves a number of independent and interdependent IT systems used in the operations of the Company for processing and recording a large volume of transactions. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Company.	Our audit procedures with respect to this matter included, but were not limited to the following:
	In assessing the controls over the IT systems of the Company, we involved our technology specialists to obtain an understanding of the IT environment, IT infrastructure and IT systems.
	We evaluated and tested relevant IT general controls and IT application controls of the ‘inscope? IT systems identified as relevant for our audit of the standalone financial statements and financial reporting process of the Company.
Appropriate IT general controls and IT application controls are required to ensure that such IT systems are able to process the data as required, completely, accurately, and consistently for reliable financial reporting.
	On such “in-scope” IT systems, we have tested key IT general controls with respect to the following domains:
We have identified certain key IT systems (‘inscope? IT systems) which have an impact on the financial reporting process and the related control testing as a key audit matter because of the high level of automation, significant number of systems being used by the Company for processing financial transactions, the complexity of the IT architecture and its impact on the financial records and financial reporting process of the Company.
	a. User access management which includes user access provisioning, deprovisioning, access review, password management, sensitive access rights and segregation of duties to ensure that privilege access to applications, operating system and databases in the production environment were granted only to authorized personnel.
	b. Program change management which includes controls on moving program changes to production environment as per defined procedures and with relevant segregation of environments.
	c. Other areas that were assessed under the IT control environment included backup management, incident management, batch processing and interfaces.
	We also evaluated the design and tested the operating effectiveness of key IT application controls within key business processes, which included testing automated calculations, automated accounting procedures, system interfaces, system reconciliation controls and key system generated reports, as applicable.
	Where control deficiencies were identified, we tested compensating controls or performed alternative audit procedures, where necessary.
Recoverability of Deferred Tax Assets
Refer note 2(xii) for material accounting policy information and note 10 for financial disclosures in the accompanying financial statements.	Our audit on recoverability of deferred tax assets included, but was not limited to, the following procedures:
	• Obtained an understanding of the management?s process and evaluated the design and tested the operating effectiveness of internal controls with respect to recognition and assessment of recoverability of the deferred tax assets; • Evaluated the appropriateness of the
As at 31 March 2024, the Company has recognised deferred tax assets of Rs. 252,711 lakhs on unadjusted tax losses and tax credits.
The deferred tax assets have been recognised on the basis of the Company?s assessment of availability of sufficient future taxable profits to utilise such unadjusted tax losses and tax credits within the time period allowed under the Income Tax Act, 1961, which is based on forecast of business projections. Such financial projections are inherently subjective and depend on various factors including future market and economic conditions, which involve significant management judgement and estimation. Any change in aforesaid assumptions could have a material impact on the carrying value of the deferred tax assets.
	accounting policy adopted by the Company in respect of recognition of deferred tax assets in accordance with Ind AS 12, Income Tax;
	• Assessed the reasonableness of the period of projections used in the deferred tax asset recoverability assessment in accordance with the time period allowed under the applicable tax laws with respect to utilisation of the said tax losses against future taxable profits;
	• Obtained the business projections of future taxable profits estimated by the management and critically reviewed the key assumptions used therein, including future growth rates and relevant economic and industry estimates, based on our understanding of the business and market factors;
Owing to the materiality of the balances, complexities and significant estimates and judgements involved as described above, we have considered recoverability of deferred tax assets to be a key audit matter.
The above matter is also considered to be fundamental to the understanding of the users of the financial statements.	• Traced the financial projections to approved business plans and assessed efficacy of management?s process for financial projections basis past business performance;
	• Tested the arithmetical accuracy of the computation of future taxable profits including assessed the impact of estimation uncertainty basis the sensitivity analysis performed by the management on the projections; and
	• Assessed the appropriateness and adequacy of the disclosures included in the accompanying financial statements in accordance with the applicable accounting standards.

Information other than the Financial Statements and Auditor?s Report thereon

8. The Company?s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor?s report thereon. The Annual Report 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 will 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 the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

9. The accompanying standalone financial statements have been approved by the Company?s Board of Directors. The Company?s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, the relevant circulars, guidelines and directions issued by the Reserve Bank of India (RBI) from time to time (RBI Guidelines?) and other 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the financial statements, the Board of Directors is 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

11. The Board of Directors are also responsible for overseeing the Company?s financial reporting process. Auditor?s Responsibilities for the Audit of the Standalone Financial Statements

12. 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 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

13. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism 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 control;

• Obtain an understanding of internal control 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 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 management;

• 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; and

• 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.

14. 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.

15. 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.

16. 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 of the current period 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

17. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

18. 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 the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

19. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act read with the (Companies Accounting Standards) Rules 2015, the relevant circulars, guidelines and directions issued by the Reserve bank of India (RBI) from time to time (RBI guidelines?), except to the extent, as mentioned in note 42B, effect given in accordance with the accounting treatment prescribed in resolution plan approved by the National Company Law Tribunal vide their order dated 7 June 2021 as is more fully described in the said note;

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 31 March 2024 from being appointed as a director in terms of section 164(2) of the Act;

f) The adverse remark relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 19(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2024 and the operating effectiveness of such controls, refer to our separate report in Annexure B wherein we have expressed an unmodified opinion; and

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, as detailed in note 39(a) to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2024;

ii. The Company, as detailed in note 48 to the standalone financial statements, has made provision as at 31 March 2024, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024;

iv

a. The management has represented that, to the best of its knowledge and belief, as disclosed in note 56 (vii) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (‘the 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 (‘the Ultimate Beneficiaries?) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 56 (viii) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the 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; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2024.</p>

vi. Based on our examination which included test checks, except for instances mentioned below, the Company, in respect of financial year commencing on 1 April 2023, have used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, other than the consequential impact of the exception given below:

Nature of exception noted	Details of Exception
Instances of accounting software for maintaining books of account for which the feature of recording audit trail (edit log) facility was not operated throughout the year for all relevant transactions recorded in the software.	The audit trail feature was not enabled at the database level for ten accounting software to log any direct data changes, used for maintenance of all accounting records by the Company.
Instances of accounting software maintained by a third party where we are unable to comment on the audit trail feature	The accounting software used for maintenance of customer documentation of the Company is operated by a third-party service provider.
	1. In the absence of Independent Service Auditor?s Assurance Report on the Description of Controls, their Design and Operating Effectiveness (Type 2 report?) for the month April 2023 and for the period 1 Nov 2023 to 31 March 2024, we are unable to comment on whether audit trail feature at the database level of the said software was enabled and operated for the said period.
	2. For the period 1 May 2023 to 31 October 2023 the ‘Independent Service Auditors Assurance Report on the Description of Controls, their Design and Operating Effectiveness? (Type 2 report? issued in accordance with ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information) does not provide sufficient audit evidence on audit trail (edit logs) for any direct changes made at the database level. Accordingly, we are unable to comment on whether audit trail feature with respect to the database of the said software was operated throughout the year.

Annexure A referred to in paragraph 18 of the Independent Auditor?s Report of even date to the members of Piramal Capital & Housing Finance Limited on the standalone financial statements for the year ended 31 March 2024

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and right-of-use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The property, plant and equipment and right-of-use assets, have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of physical verification programme adopted by the Company, is reasonable having regard to the size of the Company and the nature of its assets.

(c) The title deeds of all the immovable properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in Note 12 to the standalone financial statements, are held in the name of the Company.

(d) The Company has not revalued its property, plant and equipment including right-of-use assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended) and rules made thereunder.

(ii) (a) The Company does not hold any inventory. Accordingly, reporting under clause 3(ii)(a) of the Order is not applicable to the Company.

(b) As disclosed in Note 15 to the standalone financial statements, the Company has been sanctioned a working capital limit in excess of Rs. 5 crores by banks and financial institutions based on the security of current assets. The quarterly statements, in respect of the working capital limits have been filed by the Company with such banks and financial institutions and such statements are in agreement with the books of account of the Company for the respective periods, which were subject to audit/review.

(iii) (a) The Company is a Housing Finance Company and its principal business is to give loans.

Accordingly, reporting under clause 3(iii)(a) of the Order is not applicable to the Company.

(b) In our opinion, and according to the information and explanations given to us, the investments made, guarantees provided, security given and terms and conditions of the grant of all loans and advances in the nature of loans and guarantees provided are, prima facie, not prejudicial to the interest of the Company.

(c) The Company is a Housing Finance Company (‘HFC?), registered under provisions of the National Housing Bank Act, 1987 and rules made thereunder and is regulated by various regulations, circulars and norms issued by the Reserve Bank of India including Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances. In respect of loans and advances in the nature of loans granted by the Company, we report that the schedule of repayment of principal and payment of interest has been stipulated and the repayments/receipts of principal and interest are regular except for instances as below:

Particulars - Days past due	Total amount due (INR in Lakhs)	No. of Cases
1-29 days	328,229	65,846
30-59 days	98,956	20,858
60-89 days	54,484	13,824
90 or more days	71,713	27,368
Purchased or Originated Credit Impaired	102,135	32,752
Total	655,517	160,648

Above figures are net of Fair Value adjustments on account of business combination (refer note no. 42B to the financial statements). Further, the above table does not include loans which are classified as fair value through profit or loss.

(d) According to the information and explanations given to us, the total amount which is overdue for 90 days or more in respect of loans and advances in the nature of loans given in the course of the business operations of the Company aggregates to Rs. 71,713 lakhs as at 31 March 2024 in respect of 27,368 number of loans. Further, reasonable steps as per the policies and procedures of the Company have been taken for recovery of such principal and interest amounts overdue.

(e) The Company is a Housing Finance Company and its principal business is to give loans. Accordingly, reporting under clause 3(iii)(e) of the Order is not applicable to the Company.

(f) The Company has not granted any loans or advances in the nature of loans, which are repayable on demand or without specifying any terms or period of repayment.

(iv) The Company is a Housing Finance Company and engaged in the business of financing. Accordingly,

the provision of Section 185 is not applicable to the Company. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of sections 186(1) of the Act in respect of loans and investments made. The other provisions of Section 186 are not applicable to the Company.

(v) In our opinion, and according to the information and explanations given to us, the Company has

not accepted any deposits or there are no amounts which have been deemed to be deposits within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Company?s products/ services / business activities. Accordingly, reporting under clause 3(vi) of the Order is not applicable.

(vii) (a) In our opinion, and according to the information and explanations given to us, the Company is

regular in depositing undisputed statutory dues including goods and services tax, provident fund, employees? state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities, though there have been slight delays in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

According to the information and explanations given to us, there are no statutory dues referred in subclause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute	Nature of dues	Gross Amount (Rs. In Lakhs)	Amount paid under Protest (Rs. In Lakhs)	Period to which the amount relates	Forum where dispute is pending	Remarks, if any
The Income Tax Act, 1961	Income tax	24	-	AY 2014-15	Income Tax Appellate Tribunal
The Income Tax Act, 1961	Income tax	2,723	-	AY 2017-18	Assessing Officer
The Income Tax Act, 1961	Income tax	6,218	-	AY 2018-19	Assessing Officer
The Income Tax Act, 1961	TDS	5,534	435	AY 2017-18	Income Tax Appellate Tribunal
The Income Tax Act. 1961	TDS	511	40	AY 2018-19	Income Tax Appellate Tribunal
The Income Tax Act, 1961	TDS	510	40	AY 2019-20	Income Tax Appellate Tribunal
The Income Tax Act, 1961	TDS	1,268	100	AY 2020-21	Income Tax Appellate Tribunal
The Income Tax Act, 1961	Income tax	1,238		AY 2021-22	Bombay High Court
The Income Tax Act, 1961	Income tax	5,627		AY 2022-23	Assessing Officer
Goods and Service Tax Act, 2017	Variance in RCM liability and Input tax credit	22	-	FY 2017-18	Adjudicating officer
Goods and Service Tax Act, 2017	GST Chandigarh	3,026	-	FY 2017-18	Punjab & Haryana High Court
Goods and Service Tax Act, 2017	GST - Assam	8	-	FY 2017-18	Adjudicating officer
Goods and Service Tax Act, 2017	GST Puducherry	17	-	FY 2018-19	Adjudicating officer
Goods and Service Tax Act, 2017	GST Maharashtra	3,787	-	FY 2013-14 to June 2017	Bombay High Court
Goods and Service Tax Act, 2017	GST Maharashtra	10	-	July 2017 to March 2018	Adjudicating officer
Goods and Service Tax Act, 2017	GST - Gujarat	94	-	FY 2017-18 and FY 2018-19	Adjudicating officer

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been previously recorded in the books of accounts.

(ix) (a) According to the information and explanations given to us, the Company has not defaulted in

repayment of its loans or borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaj^tf^Jl⁵^^ bank or financial institution or government or any government aXrtharity-

(c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained, though idle/surplus funds which were not required for immediate utilisation have been invested in readily realisable liquid investments.

(d) In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the Company, funds raised by the Company on short term basis have, prima facie, not been utilised for long term purposes.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) (a) The Company has not raised any money by way of initial public offer or further public offer (including

debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company has been noticed or reported during the period covered by our audit except 60 cases of loans fraud aggregating to Rs 1,815 lakhs as mentioned in note 62.7 to the accompanying standalone financial statements.

(b) According to the information and explanations given to us including the representation made to us by the management of the Company, no report under sub-section 12 of section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014, with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us, the Company has received whistle blower complaints during the year, which have been considered by us while determining the nature, timing and extent of audit procedures.

(xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions entered into by the Company, with the related parties are in compliance with section 188 of the Act. The details of such related party transactions have been disclosed in the standalone financial statements etc., as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system which is commensurate with the size and nature of its business as required under the provisions of section 138 of the Act.

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any noncash transactions with its di rectors-erpersons connected ‘irfectors and accordingly, reporting

under clause 3(xv) of the Order wiflr^&p^i^ compIiancrfdM&Mbe-pons of section 192 of the Act are not applicable to the Company/ * (or/ j I

(xvi) (a) The Company is a Housing Finance Company having a valid Certificate of Registration under Sectioi

29A of the NHB Act, 1987 and is not required to be registered under section 45-IA of the Reserve Ban of India Act, 1934 in terms of exemption granted under Master Direction - Exemptions from thi provisions of RBI Act, 1934 dated 25 August 2016 (as amended). Accordingly, reporting under clause 3(xvi)(a) and (b) of the Order are not applicable to the Company. Also refer Note 53 (b) to the standalone financial statements.

(b) According to the information and explanations given to us, the Company is not a Core Investmer Company (CIC) as defined in the regulations made by the RBI. Accordingly, reporting under clause 3(xvi)(c) of the Order is not applicable to the Company.

(c) Based on the information and explanations given to us and as represented by the management of the Company, the Group (as defined in Core Investment Companies (Reserve Bank) Directions, 2016 has only one CIC as part of the Group.

(xvii) The Company has incurred cash losses amounting to Rs. 85,940 lakhs in the current financial year bi had not incurred cash losses in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting unde clause 3(xviii) of the Order is not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageim and expected dates of realisation of financial assets and payment of financial liabilities, other informatioi in the standalone financial statements, our knowledge of the plans of the Board of Directors am management and based on our examination of the evidence supporting the assumptions, nothing ha come to our attention, which causes us to believe that any material uncertainty exists as on the date c the audit report indicating that Company is not capable of meeting its liabilities existing at the date c balance sheet as and when they fall due within a period of one year from the balance sheet date. We however, state that this is not an assurance as to the future viability of the company. We further stati that our reporting is based on the facts up to the date of the audit report and we neither give an guarantee nor any assurance that all liabilities falling due within a period of one year from the balanci sheet date, will get discharged by the company as and when they fall due.

(xx) According to the information and explanations given to us, the Company does not have any unsper amounts towards Corporate Social Responsibility in respect of any ongoing or other than ongoim project as at the end of the financial year. Accordingly, reporting under clause 3(xx) of the Order is nc applicable to the Company.

(xxi) The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financie statements of the Company. Accordingly, no comment has been included in respect of said clause unde this report.

For Walker Chandiok & Co LLP For T R Chadha & Co LLP

Chartered Accountants Chartered Accountants

Firms Registration No:001076N/N500013 Firms Registratiopr^/No:006711N/N500028

Annexure B

Independent Auditor?s Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act?)

1. In conjunction with our audit of the standalone financial statements of Piramal Capital & Housing Finance Limited (the Company?) as at and for the year ended 31 March 2024, we have audited the internal financial controls with reference to financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Company?s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note?) issued by the Institute of Chartered Accountants of India (‘ICAI?). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company?s business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor?s Responsibility for the Audit of the Internal Financial Controls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor?s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company?s internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such controls were operating effectively as at 31 March 2024, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP	For T R Chadha & Co LLP
Chartered Accountants	Chartered Accountants
Firm?s Registration No:001076N/N500013	Firm?s Registration No:006711N/N500028

Place: Mumbai Date: 8 May 2024