To the Members of HDFC Bank Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of HDFC BANKLIMITED ("the Bank") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The Bank's Board of Directors is responsible for the matters stated in Section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Bank in accordance with the provisions ofSection 29 of the Banking Regulation Act 1949 accounting principles generally acceptedin India including the Accounting Standards prescribed under Section 133 of the Act inso far as applicable to banks and the guidelines issued by the Reserve Bank of India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Bank and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial controls relevant to the Bank'spreparation of the standalone financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Bank's Directors and evaluatingthe overall presentation of the standalone financial statements. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Banking Regulation Act 1949 and the Act in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Bank as at 31st March 2017 and its profit and its cash flowsfor the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act and Section 30 of the Banking RegulationAct 1949 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 bestof our knowledge and belief were necessary for the purposes of our audit and found them tobe satisfactory.
b) In our opinion the transactions of the Bank which have come to our notice have beenwithin the powers of the Bank.
c) As explained in paragraph 2 below the financial accounting systems of the Bank arecentralised and therefore accounting returns are not required to be submitted by theBranches.
d) In our opinion proper books of account as required by law have been kept by theBank so far as it appears from our examination of those books.
e) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
f) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under Section 133 of the Act as applicable.
g) On the basis of the written representations received from the directors as at 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as at 31st March 2017 from being appointed as a director in terms of Section164(2) of the Act.
h) With respect to the adequacy of the internal financial controls over financialreporting of the Bank and the operating effectiveness of such controls refer to ourseparate report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Bank's internal financial controls overfinancial reporting.
i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Bank has disclosed the impact of pending litigations on its financial positionin its standalone financial statements; ii. The Bank has made provision as required underthe applicable law or accounting standards for material foreseeable losses if any onlong-term contracts including derivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Bank.
2. We report that during the course of our audit we performed select relevantprocedures at 85 branches. Since the Bank considers its key operations to be automatedwith the key applications largely integrated to the core banking systems it does notrequire its branches to submit any financial returns. Accordingly our audit is carriedout centrally at the Head Office and Central Processing Units based on the necessaryrecords and data required for the purposes of the audit being made available to us.
For Deloitte Haskins & Sells
Chartered Accountants (Firm's Registration No. 117365W)
Porus B. Pardiwalla
(Membership No. 40005)
Mumbai April 21 2017
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph1.h under Report on Other Legal and Regulatory Requirements' section of theauditor's report of even date) Report on the Internal Financial Controls Over FinancialReporting 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 HDFCBANK LIMITED ("the Bank") as at 31st March 2017 in conjunction with ouraudit of the standalone financial statements of the Bank for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Bank's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Bank considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Bank's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013 the Banking Regulation Act 1949 and the guidelines issued by theReserve Bank of India.
Our responsibility is to express an opinion on the Bank's internal financial controlsover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting were established and maintained and if such controls operatedeffectively in all material respects.
An audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Bank's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles and other applicable regulations. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Bank has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2017 based on the internal controlover financial reporting criteria established by the Bank considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For Deloitte Haskins & Sells |
| ||Chartered Accountants |
| ||(Firm's Registration No. 117365W) |
| ||Porus B. Pardiwalla |
| ||Partner |
|Mumbai ||(Membership No. 40005) |
|April 21 2017 || |