star housing finance ltd share price Auditors report


To the Members of

STAR HOUSING FINANCE LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Star Housing Finance Limited (the "Company"), which comprise the Balance Sheet as at March 31,2022, and the Statement of Profit arvd Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting p>olicies and other explanatory information.

In our opinion and to the best of our information arvd according to theexplanations 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 viev/ in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) 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 31,2022, and its profit, total comprehensive income, its cash flowsandthechangesin equity for the yearendedonthat date. Basisfor Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act (SAs). Our re^x>nsibilities under those Standards are further described in the Auditors Responsibility for the Ajdit 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 ICAIs Code of Ethics V/e believe that the audit evidence obtained by us is sufficient and appropriate to providea basis for our audit opinion on the financial statements.

Emphasis of Matter

We draw attention to Note 35 to 36 to the financial Statement which describes the extent to which the COVID-19 pandemic will impact the companys operations and Its finar>cial metrics including the expected credit loss on financial assets v/hich are dependent on uncertain future developmentSw Ouropinion is not modified in respect of this matter.

Key Audit Matter

Key audit matter is the matter that. In our professional judgment, was of most significance in our audit of the financial statements of the current period. The matter was 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 the matter. V7e have determined the matter described below to be the key audit matter to be communicated in our report.

Impairment of loans Principal audit procedures performed
significant judgement by the management. The most significant judgements are: Profile specific to the borrowers.
• Timely identification and classification of the impaired loans, including classification of assets to stage 1,2, or 3 using criteria in accordance with Ind AS 109 which also include considering the impact of Reis regulatory circulars, We evaluated the design and operating effectiveness of controls across the processes relevant to ECL, including the judgements and estimates.
V/e tested the completeness of loans and advances included In the Expected Credit Loss calculations as of March 31. 2022 by reconciling it with the balances as per loan balance register and loancommitmentreportasonthatdate.
• The segmentation of financial assets when their ECL is assessed on a collective basis.
* Determination of probability of defaults (PD) and loss given defaults (LGD) based on the default history of loans, subsequent recoveries made and other relevant factorsand We tested assets in stage 1,2 and 3 on sample basis to verify that they were allocated to the appropriate stage. Tested samples to ascertain the completeness and accuracy of the input data used for determining the PD and LGD rates and agreed the data with underlying books of accounts and records.
• Assessment of qualitative factors having an impact on the credit risk.
There are disclosures made in financial statements for ECL especially in relation to judgements and estimates by the Management in determination of the ECL. Refer note 3.6 and note 8 to the financial statements. For samples of exposure, we tested the appropriateness of determining EAD, PD and LGD.
For exposure determined to be individually impaired, we tested samples of loans and advances and examined managements estimate of future cash flows, assessed their reasonableness and checked the resultant provision calculations.
We performed an overall assessment of the ECL provision levels at each stage including managements assessment and provision on account of Companys portfolio, risk profile, credit risk management practices. We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 in relation to ECL especially in relation to judgements used in estimation of ECL provision.

Information Other than the Financial Statements and Auditors Report Thereon

• The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis and Directors Report (the Reports") but does rvot include financial statements and our auditors report thereon. The reports are expected to be made available to us after the date of this auditor report.

• Our opinion on the financial statements does not cover the other irrformation 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 f inarKial statementsor our knowledge obtained during the course of our auditor otherwise appears to be materially misstated.

When we read the Other lnformatk>n,if we conclude that thereisa material misstatement therein, v/earerequiredtocommunicate the matter to those charged with governance as required under SA 720 (Revised) The Auditors responsibilities Relating to Other Information.

Managements Responsibilities for the Financial Statements

The Companys Board of Directors is 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 f inarKial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also irKludes 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 accountingolicies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, at ereoperatingeffectively orensuring 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, management is responsible for assessing theCompan/sability to continue as a going concern, disclosing, as applicable, matters related to going concern and usmg the going concern basis of accountir^ unless managemerrt either intends to liquidate the Company ortocease operations, or has no realisticatternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors 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 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 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 reasonablybe expected toinfluence the economicdecisk>nsof users taken on the basisof these financial statements.

As part of an audit in accordance with SAs, ^ve exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the riste 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 basts for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher thwn for one resultir>g from error, as fraud mayinvolvecollusion.forgery,jntentionalomiss*ons.misr^resentations,or theoverrideof internal control.

• Obtain an understanding of interr^al financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(l) of the Act we are also responsible forexpressing our opinion on whether the Company has adequateintert^al financial controlssystemln 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 management

• Evaluate the appropriateness and reasonableness of disclosures made by the Board of Directors in terms of the requirements specified under the Listing Regulations.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditiorvs that may cast significant doubt on the Companys ability 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 finarveial statements or, if such dtsclosurss 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 causetheCompanytoceasetocontinueasa going concern.

• Evaluate theoverall presentation, structure andcontentof theFinancial Results, including thedisclosures, and whether theFinandal Results representtheunderlying transactions and events in a manner thatachievesfairpresentation.

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 krvswledgeable user of the financial statements may be influerveed. We consider quantitative materialityand qualitative factors in

i. plannir>gthescopeofourauditworkandinevaluatingtheresuttsofourwork;and

ii. toevaluate theeffect ofany identified misstatomontsin the finarv:ialstatomcnts.

We communicate with those charged V/ith governance regarding, among other matters, the planned scope and liming of the audit and significantaudit findings, irvciuding anysignificantdeficienctes in internal control thatwe identify during our audit.

We also provide those chargedwithgovernancewithastatementthatwe have complied with relevant ethical requirement regarding indopondonce, and to communicatev/.ththemallrclatior?hipsand other matters that may reasonably be thought to bearon ourindependence, andwhereapplicable, 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 of the current period 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 v/hon. 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 beexpectedtooutweighthepublic interest benefits of suchcommunication.

Other Matters

Thefinancial statements asat and for the year ended March 31,2021, have been audited by the predecessor auditor. The report of the predecessor auditor on the comparative financialstatements dated May 22nd,2021 expressed an unmodified opinion.

Our opinion on the financial statements and our report on Other Legal and Regulatory Requirements below is not modified In respect ofthismatter.

Report on Other Legal and Regulatory Requirements

1. Asrequired by Section 143(3) of the Act. basedon our audit wereport that:

a) We have sought and obtairved all the information and oxplanatiorts which to the best of our knowledge and belief v/ere necessary for the purposes of ou r a udit.

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 FlowsandStatenventofChangesinEquftydeaKwithbythisReportareinagreementwith the relevant books of account

d) Inour opinion, the aforesaid financial statements comply with the Ind AS specifiedur>der Section 133of the Act.

e) On the basIsof thev/rittenrepresentationsrecelvedfromthedirectorsasandtakenonrecordbytheBoardof Directors, noneof thedirectorsisdisqualifiedasonMarch31,2022frombeingappointedasadirectorintermsof Section 164(2) of the Act.

^ Withrespectto the adequacyof theintemalfinancialcontroteoverfinancialreportingof theCompany and the operating

effectivenessofsuchcontrols, refer to our separate Report in"AnnexureA".Ourreport?<pressesanunmodified opinion on the adequacy and operatingeffectivenessof theCompanysinternal financial controlsover financial reporting.

g) With respect to the other matters to be included ir^ the Auditors Report in accordance with the requirements of section 97(16) of the Act as amended, in our opinion and to the best of our inf ormation and according to the explanations given to uSk the remuneration has been paid by the Company to its directors during the year Is In accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors Report in accordance wtth RuleTI 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. TheCompanydoesnothaveanypendinglitigat)onsasatyear-end>vhichwouldimpactitsfinancial position.

i*L The Company did not have any long-term contracts including derivafive contracts as at the year-end for vrhich there were any

material foreseeable losses.

ill. There werenoamountswhichwererequiredtobetrarisfetTedto the Investor Educationand Protection Fund by theCompany.

iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the notes of accountSi. no funds (which are material either irvjividually or in aggregate) have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the Company to or in any other person(s) or ent;ty(ies), includir>g foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest ir> other persons or entities identified in any manner whatsoever by or on behalf of the Company CUttimate Beneficiartes") or provide any guarantee, security or the like on behalf of theUltimate Beneficiaries. Refer note45tothefinarKialstatements.

(b) The Management has represented, that to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are materia! either individually or intheaggregate) have been received bytheCompany 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, directly or Indirectfy, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of theFunding Party (Ultimate Beneficiaries") or provide anyguarantee,security or the likeon behalf of the Ultimate Beneficiaries. Refer note45tothefinancial statements.

(c) Based on the audit procedures that has been 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 (a) and (b) above, contain any material mis-statement.

V. The company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

 

Z As required by the Companies (Auditors Report) Order, 2020 (the ‘Order") issued by the Central Government In terms of Section 143(11) oftf^eAct, we give in "Anr^exureB"astatementonthemattersspecifiedlnparagraphs3and4of theorder.

For: Nyatl Mundra& Co.

Chartered Accountants

FRN:008513C

Sd/-

CAAkash Jain

Partner

Membership No. :079052

UDIN: 22079052AHHLPR8858

Place: Udaipur

Date: 18.04.2022

Report on Internal Financial Controls Over Financial Reporting

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1(f) under Report on Other Legal and Regulatory Requirements section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")

We have audited the internal financial controls over financial reporting of STAR HOUSING FINANCE LIMITED (the "Cornpany") as of March 31,2022 in conjunction with our audit of thefinancial statements of the Companyforthe year ended onthat date. ManagementsResponsibility for Internal Financial Controls

The Companys management Is responsible for establishing and maintaining internal financial controls based on the internal control over financial rep>orting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Rnancial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note ). These responsibilities include the design. imp>lementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its 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 thetimety preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibilrty is to express an opinion on the Companys internal financial controls over financial reportir>g based on our audit. We conducted our audit in accordance with the GuidanceNoteand the standards on Auditing prescribed under Section 143(10) of the Act. to the extent applicable to an audit of internal financial controls. 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 controlsover financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit irwolves performir>g procedures to obtain audit evidence about the adequacy of the internal firiancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal finarKialcontrolsoverfir^rKial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing arKi evaluating the design and operating effectiveness of Internal control based on the assessed risk. The procedure selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companysintemalfinancialcontrotesystemoverfinanciaireporting.

Meaning of Internal Financial Controls Over Financial Reportir>g

A Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting includes those p>olicies and procedures that(1) pertain to the maintenanceof records that in reasonable detail, accurately and feirty reflect the trarsactionsanddispositions of the assets of ihe company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance v/ith 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 urtauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitatlorts of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the p>ossibility of collusion or

improper management override of a>ntrois, material misstatements due to error or fraud may occur and rrot be detected. Also, projections of any evaluation of the interna! financial controls over financial reporting to future periods are subject to the risk that the interrial financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has^ in all material respects^ an adequate internal financial controls system over financial reporting and such internal financial controls over financial reportir>g were operating effectively as at March 31,2022, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note.

For: Nyati Mundra & Co.

Chartered Accountants

FRN:008513C

Sd/-

CA Akash Jain Partner

Membership No. :079052

UDIN: 22079052AHHLPR8858

Place: Udaipur

Date: 18.04.2022

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements section of our report of even date)

(I) Accordirvg to the information and explanations given to us, in respect of Property, Plant and Equipment & Intangible Assets.

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment The Company has maintained proper records showing full particulars of intangible assets.

b) The Company has a program of verificalion of Property, Plant and Equipment, so to cover all the items in a phased periodical manner vrhkh, in our opinion. Is reasonable having regardtoWie size of the Company and the r^ature of its assets. /Vxording to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) Based upon the audit procedure performed and according to the records of the Company, the title deeds of all the imrTKJvable properties are held in the name of the Company.

d) TheCompany hasnotrevalued any of its Property, PlantandEquipmentincluding Right of Use Assetsand intangible assets during the year.

e) No prococdir^gs have boon initiated durir>g the year or are ponding against tho Company as at March 31,2022 for holding any benami properly under the Benami Transactions (Prohibition) Act 1988 (as amended In 2016 ) and rules made thereunder.

(ii) a) The ompanydocsnothaveanyinventoryandhence,roportingundcrclausc3(ii)(a)of theOrdorisnotapplicablo.

b) According to the information and explanations given to us, the Company has not been sanctioned working capital limits in excess of Rs 5 crores, in aggregate, at any points of time during the year, from bante on the basis of security of current assets hence, reporting under clause 3 (ii)(b)of the Order is not applicable.

(iii) During the year, the Company has made investments in and granted loans or advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnershipsoranyotherparties. TheCompany has not provided any guarantee orsecuritytoany other entity durir>g the year.Withrespecttosuchinvestmentsandloansand advances:

a) TheCompanysprincipalbusinessistogiveloans,andhencereportingunderclause3(iii)(a)of theOrderisnotapplicable.

b) The investments made and the terms and conditions of the grant of all theloar? and advances In the natureof loarw, during thoyear are, in our opinion, primafacie,notpre]udicial to the Compan/s interest.

c) In respect of loans and advances in the r>ature of loans (together referred to as loan assets), the schedule of repayment of principal and payment of interest has been stipulated. Note 3.6 to the Financial Statements explains the Companys accounting policy relating to impairment of fiivtndai assets which include loans assets. In accordance with that policy, loan assets with balances as at March 31,2022, aggregating 311.46 Lacs were categorised as credit impaired (‘Stage 3) and 1910.27 lacs were categorised as those where the credit risk has increased significantly since initial recognition ("Stage 2). Disclosures in respect of such loans have been provided in Note 6.1 to the Financial Statements. Having regard to the nature of the Companys business and the volume of information irrvolved. it is not practicable to provide an itemized list of loan assetswheredelinquenciesintherepaymentof principal and interesthave been identified.

d) The total amount overdue for more than ninety days, in respect of loans and advances in the r>ature of loar?, as at the year end is 98.37 Lacs. Reasonable steps are been taken by the Company for recovery of the principal and interest as stated in the applicable Regulations and loan agreements

e) TheCompanysprincipalbusinessistogiveloans,andhencereportingunderctause3(iii)(e)of theOrderisnotappl(cable.

f) According toinformation andexplanationsgiven to usand based on the audit proceduresperformed.theCompany has not granted any loans or advances in the nature of loanseitt>er repayable on demand or without specifying any terms or period of mpayment during the year. Hence, reporting under clause 3(iii)(f) is not applicable.

(iv) According toinformation andexplanationgiven tous, theCompany hasnotadvancedloansor made investmentsinor provided guaranteesorsecuritytopartiescoveredbysection 185and 186of theActHencereportingunderparagrap>h 3(iv) of the Order is r>ot applicable.

(v) According to the information and explanations given to us. the Company has not accepted any deposits or amounts which aredeemedto bedepositsduringthe yearandryoorderinthisrespecthasbeenpassedbytheCompanyLawBoardorNational Company Law Tribunal or the Reserve Bank of Irwdia or any Court or any other Tribunals in regard to the Company. Hervce, reporting under ciause3(v) of theOrder is not applicable.

(vi) According to the information and explanations given to us^ the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act in respect of the services rendered by the Company. Hence, reporting under clause 3(vi) of the Order Is not applicable.

(vit) Accordingtotheinformationandexplanationsgiventous.inrespectofstatutorydues:

a) Undisputed statutory dues, irKluding Goods arKl Service tax (GST). Provident Fund, Employees State lr>surance. Income- tax, cess and other material statutory dues applicable to the Company have generally been regularly deposited by it with the appropriate authorities.

b) There were no undiluted amounts payable in respect of GST, Provident Fund, Employees State Insurance, Income-tax, cess and other material statutory dues in arrears as at March 31,2022 for a period of more than six months from the date they became payable.

c) There were rK> dues referred in sub clause (a) above which have not been deposited on account of disputes as at March 31.

2022.

(viii) According to the information and explar%ations given to us. no transactions relating to previously unrecorded income were surrendered ordisdosed asincorr>einthetaxassessa>entsunderthelncomeTdxActl961durIr>g the year.

(x) According to the information and explanations given to us, inrespect of borrowings:

a) The Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year.

b) TheCompanyhasnotbeendeclaredwilffuldefaulterbyanybankorfinancialinstitutionorgovernmentorany government authority.

c) In our opinion, term loans availed by theCompany were, applied by the Company during the yearfor the purposesfor which theloanswereobtained.otherthan temporary deployment pendingapplication in respect of term loans raised towardsthe end of the year.

d) On an overall ?omination of the financial statements of the Company, funds raised on short term basis have, prima facie, not been usedduring the yearfor long-term purposes by the Company.

8) The Company did not have any subsidiary or associate or joint venture during the year and hence, reporting under clause 3(ix)(e) of the Order is not a pplicable.

f) TheCompanydoesnothaveanysubsidiaryorassociateorjointventureandhencereportingonclause3(ix)(f)of theOrder isnotapplicable.

(x) (a) The Company hasnot raised moneysbyyray of initial public offerorfurther public offer (including debt instrun>ents) during

the year and hence reporting under clause 3(x)(a) of the Order is not applicable, b) According to the information and explanationsgiven to us^ company has made preferential allotment of9,08,729shares of

Rs 10 at a premium of Rs 79 as approved in its Board meeting held on 18th Nov 2021. In our opinion requirements of the section 42 and section 62 of the Companies Act. 2013havebeen complied with and thefunds raised have been used for the purposes for which the funds were raised.

(xi) (a) According to the information arvd explanations given to us, no fraud by the Company and rvo material fraud on the Company

has been noticed or reported during the year.

b) No report under section 143(12) of the Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit

and Auditors) Rules, 2014 withtheCentralGovernment duringthe yearanduptothedateof this report. c)As represented tousbythe Management there were no/vhistleblowercomplaints received by theCompany during the year.

(xii) TheCompanyisnotaNidhiCompanyand hence, reportirvg underclause 3(xii)of the Order isnotapplicable.

(xiii) According to the informationand explanationsgiven to us, theCompany isincompliancewith Section 188and 177of theAct, here

applicable, for all transactions with the related parties and the details of related party transactior? have been disclosed in the financial statements, etc. asrequired by the applicable accounting standards.

(xiv) (a) In our opinion, the Company has an adequate Internal audit system commensurate with the size and the nature of its

business.

b) We have considered, the internal audit reports issued to the Company during the year and covering the p>eriod upto March

31,2022.

(xv) Accordirvg to the information and explar>ations given to us, during the year, the Company has not entered into any rron-cash transactions with itsdirectors or persons connected with him and hence, provisions ofsectionl92 of ffic Act are rvotapplicable.

(xvi) TheComp>anyis notrequiredtobe registered undersecfonAS-IAof theReserve Bank of India Act 1934. Hence, reporting under clauses3(xvi)a,bandcof theOrderisnotapplicable. The Group does not have any CIC as part of the group ar>d accordirvgly reporting under clause <xvi) (d) of the Order is not applicable.

(xvii) TheCompanyhasr?ot incurred cash fosses during the financial year covered by ouraudit and theimmediatelypreceding financial year.

(xviii) There has been no resignation of the statutory auditors of the Company. Hence, reporting under clause 3(xviii) of the Order is not applicable.

(xx) On the basisof thefir^ncial ratios, ageing and expected datesof realization of financial assetsand payment of financial liabilities. Asset Liabiitty Maturity (ALM) pattern, other information accompanying the fir^ancial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, whic^t causes us to believe that any material uncertainty exists as on the date of the audit report ir>dicating that the Company is not capable of meeting its liabilities ex sting at the date of balance sheet as and when they fall due withina period of one yearfrom the balance sheet date. We, however, state thatthis is not an assurance as to the future viability of the Company. We further state that our reporting Is based on the facts up to the date of the audit report arvd we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company asand when they fall due.

(xx) The Company has fully spent the required amount towards Corporate Social Responsibility (CSR) and there Is no unspent CSR amount for the year requirirvg a transfer to a Fund specified In Schedule Vil to the Act or special account in compliance with the provision of section 135(6)of the said Act. Accordingly, reporting under clause 3(xx)of the Order is not applicable.

(xxi) According to the information and explanations given to us, the Company does not have subsidiary, associate and joint venture. A?:ordingly, reporting under clause 3(xxi)of the Order is not applicable.

For; Nyati Mundra & Co.

Chartered Accountants

FRN:008513C

Sd/-

CA Akash Jain

Partner

Membership No. :079052

UDIN: 22079052AHHLPR8858

Place: Udaipur

Date: 18.04.2022

TO

THE BOARD OF DIRECTORS

STAR HOUSING FINANCE LIMITED

Independent Auditors Additional Report for the year ended, pursuant to the requirements of the Master Direction - Non-

Banking Finance Company- Housing Finance Company (Reserve Bank) Directions,2021.

1. This report has been issued in accordance v/ith the requirements of the Master Directiwi - Non- Banking finance Company • Housing Finanee Company (Reserve Bank)Directions,2021.

2. We have audited the accompanying audited Ind-AS financial statements of Star Housing Fir\ance Company ("the Company) which comprise the Balance Sheet as at 31st March 2022, the Statement of Profit and loss including Other Compreher?sive Income, theStatement of Changes in Equity and the Statement of Cash Flosvs for the year then ended and notes to the Ind-AS financial statementsincludingasummaryofsignificantaccountingpoticiesand other explanatory information and have issuedan unquallfiedopinionvideourAuditreportdatedlBthAprir 2022.

InadditiontothesaidreportmadeunderSection 143of theCompaniesAct 2013(theAcf)onthelr>d AS financial statements of the Company for the year ended 31st March 2022 ar>d as required by the requirements of Master Direction - Non- Banking finance Company - Housing Finance Company (Reserve Bank) Directions, 2021., and Informatiotyexplanations and representation received from the management, we report on the matters specified in paragraphs 70 of Chapter XII of the said Directions.

Management and those Charged with Governances Responsibility for the Financial Statements

3. The Companys Board of Directors is responsible forthe matters stated in Section 134(5) of the Companies Act, 2013 (The Act) with respect to the preparation of these IrxJ ASfinancialstatements thatgivea true arxJ fair view of the financial position, financial performance(including other Comprehensive Income), charvges in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) 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 the safeguarding the assetsof theCompanyandforpreventing anddetectingfraudsandotherirregularities;selectionandapplicationof appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintervanceofadequateintemaifinancialcontrote. that wereoperating effectively for ensuring the accuracy and completeness of tho accounting records, relevanttothoproparation andpresentationof the financial statomentsthatgive a true and fair view and are free from material misstatement, whether due to fraud or error In preparing the financial statements, management is responsible for assessing the Companysability to continue as a going concern, disclosing, asapplicable, matters related to going concemandusingthegoingconcernbasisofaccountingunlessmanagementeitherlntendstoliquidate the Company or to cease operations, or has norealisticalternativebut to do so.

4. The Management of the Company is also responsible for Compliance with the National Housing Bank Act1987 (The NHB Act), Master Direction - Non- Banking finance Company - Housing Finance Company (Reserve Bank) Directions, 2021, and other circulars and directions issued by the NHB there under and for providing all the required information to the NHB. Further, the Company is responsible for complianceofRBI circular or guidelines, wherever applicable.

Auditors Responsibility

5. Pursuant to the requirements of the Auditors Report Directions, it is our responsibility to provide reasonable assurance on the matters specified in para 70 of the Directions, to the extent applicable to the Company, on the basis of our audit of the financial statements of the Company for the year ended 31st March 2022 and examination of books of account arvd other records maintained by theCompany for the year then ended.

6. Vie conducted our examination in respect of this certificate in accordance with the Guidance Note on Reportsor Certificates for Special Purposes ("the Guidance Note ") issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of theCode of Ethics issued by thelnstituteof Chartered Accountants of India.

7 We have complied v/Ith the relevant applicable requirements of the Standard on Quality Control (SOC) I Quality Control for Firms that Perform Audits and Reviews of Historical Rnancial Information, and Other Assurance and Related and Related

Services Engagements, issued by ICAl.

8 Opinion;

Based on our auditof the financial statements forthe year ended 31st March 2022 and examination asabove, evidences obtained and the information and explanations, along with the representatiorts provided by the Management, we report that

A: Applicable to all Housing Finance companies:

1 The company has obtained a Certificate of Registration No. 12.0080.09 from National Housing Bank (CoR not valid for acc^tance of public deposit). According to the information and explanations given to us^ the housing company is complying with the principal BusinessCriteria as defined in para 4.1.17of the master- direction- Non Banking Finance company- Housing Finance company (Reserve Bank) Directions2021.

2 According to the information and explanations given to us, the company is meeting the required Net Owned Fund (NOF) requirement as prescribed under section 29A of the National Housir>g Bank Act, 1987 during the period under audit and as on 31stMarch2022. Durirvgthe year.thehousingfinancecompany asnotissuedpaid-uppreferenceshareswhichare compulsorily convertible into equity.

3 According to the information nd explanations iven to us. thecompanyhascompliedwithsection29C of theNational Housing Bank Act1987by creating a reserve fund in which 20 percent of its net profit has been transferred during the financial year ended 31st March 2022.

4 According to the information arvd explanations given to us and as per the audit eviderKes gathered during the audit, the Companys total borrowings as on March 31,2022 amounting to Rs.78.48Crs is less than 12 times of NOF.

5 According to the informationand explanationsgiven to usandaspertheauditevidencesgatheredduring the audit.the company hascompliedwiththeprudentialnormsonincomerecognition,accountingstandards,assetcl3ssification,loan-tovalue ratio, provisk>ningrequirements,disclosureinbdlancesheetinvestmentinrealestate.exposuretocdpttaimarlcetandengdgement of brokers, and concentration of credit/investments as specified in the Master Direction - Non- Banking finance Company - Housing Rna nee Company (Reserve Bank) Directions, 2021. However, we drawyourattentionto;

a) The company has granted moratorium to the eligible borrowers as per the RBI circular on Covid-19 Regulatory package dated 17.04.2020 and 23.05.2020 whereby Term Loan EMis payable from 01.03.2020 to 31.08.2020 have been deferred and the Loan tenure has been extended by the respective period. As on 31-March-2022outstandir>g of those accounts is 21.29 Crore and total no. of that account is286out of 1271 live customer

6 According to the information and explanations given to us, the capital adequacy ratio as disclosed In the half yearly statutory return and revised return filed thereafter, submitted to National Housing Bank has been correctly determined by the company and such ratio is in compliance wrththeminimumcapitaltorisk weighted asset ratio (CRAR).

7 According to the information and explanations given to us, the Company during the half financial year ended 30thSep 2021 has furnished to the NHB the half yearly Statutory Return within the stipulated period. Further half yearly NHB Statutory Return for the period end as on 31-March-2022 yet to be submitted because it is not falling due as on the date of the Audit report.

8 According to the information and explanations given to us. the Schedule-Ill Return on statutory liquid assets is notapplicable to the company as its norvdeposit taking compa ny

9 According to the informationand explanationsgiven to us, the company has not opened any new branch during the FY-21-22

10 According to the information and explanations given to us. the company has not given any loan against security of shares (Para 3.13 of the Directions), not given any loan against security of single product- gold jewellery, not given any loan againstHFCs own shares (Para 18 of the Directions).

11 According to the information and explanations given to us. the Board of Directors of the company have passed a resolution for non-acceptance of any public deposit dated 07th April2021.

12 According to the information and explanations given to us, ihe company has not accepted any public deposits during the financial yearertded.

6; Applicable to Housing Finance companies aco^ting/holding public deposits:

13 According to the information and explanations given to us, the Company has Certificate of Registration as Housing Finance Company and not accepting/holding public deposits. Accordingly Paragraph 70.2.1 to 70.2.7 of Master Direction - Non- Banking finance Compary - Housing Finance Company (Reserve Bank) Directions, 2021, are not applicable to the company for the financial year ended 31st March 2022.

For; NyatiMundra&Co.

Chartered Accountants Firm Registration No.008153C

Sd/-

Akash Jain

Partner

M.No.079052

UDIN:22079052AHHLPR8858

Place; Udaipur

Date:18.04.2022.