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LIC Housing Finance Ltd.

BSE: 500253 Sector: Financials
NSE: LICHSGFIN ISIN Code: INE115A01026
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NSE 15:58 | 17 Oct 670.10 10.55
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OPEN 659.95
PREVIOUS CLOSE 658.30
VOLUME 99957
52-Week high 794.10
52-Week low 470.00
P/E 16.95
Mkt Cap.(Rs cr) 33,789
Buy Price 0.00
Buy Qty 0.00
Sell Price 669.55
Sell Qty 179.00
OPEN 659.95
CLOSE 658.30
VOLUME 99957
52-Week high 794.10
52-Week low 470.00
P/E 16.95
Mkt Cap.(Rs cr) 33,789
Buy Price 0.00
Buy Qty 0.00
Sell Price 669.55
Sell Qty 179.00

LIC Housing Finance Ltd. (LICHSGFIN) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

LIC HOUSING FINANCE LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of LIC HOUSING FINANCELIMITED (hereinafter referred to as "the Company") which comprise the BalanceSheet as at March 31 2017 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in sub-section 5of the section 134 of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under sub-section 11 ofSection 143 of the Act.

We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India specified under sub-section 10 of Section 143of the Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312017 its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section 11 of Section 143 of theAct we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by sub-section 3 of Section 143 of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

(b) In our opinion and to the best of our information and according to the explanationsgiven to us proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books.

(c) 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.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 201 7 from being appointed as a director in terms of subsection 2 ofSection 164 of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B" to this report. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 27(2) to the standalonefinancial statements;

ii. Provision has been made in the financial statements as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts including derivative contracts; and

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in its standalone financialstatements as to its holdings as well as dealing in Specified Bank Notes during the periodfrom November 08 2016 to December 30 2016. Based on our audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of account maintained by the Company and as produced to us by the Management - ReferNote 27(31) to the standalone financial statements.

For SHAH GUPTA & CO. For CHOKSHI & CHOKSHI LLP
Chartered Accountants Chartered Accountants
FRN 109574W FRN 101872W/W100045
Vipul K. Choksi Vineet Saxena
Partner Partner
M.No.037606 M.No.100770
Place: Mumbai
Dated: April 25 2017

Annexure Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us the fixed assets were physically verified during the year bythe Management in accordance with a regular programme of verification which in ouropinion provides for physical verification of all the fixed assets at reasonableintervals. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanation given to us and the records examine byus and based on the examination of the registered sale deed/ transfer deed /conveyancedeed provided to us we report that the title deeds comprising all the immovableproperties of land and acquired buildings which are freehold are held in the name of theCompany as at the balance sheet date.

(ii) The nature of the Company's business is such that it is not required to hold anyinventories and hence the reporting under paragraph 3 (ii) of the order is notapplicable to the Company.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act. The Company has complied with the provisions ofSection 186 of the Act in respect of investments made or loans or guarantee or securityprovided to the parties covered under Section 186.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 of the Act to the extentapplicable to the Housing Finance Company and the Housing Finance Companies (NHB)Directions 2010 (as amended) with regard to the deposits accepted from the public. Wehave been informed that no Order has been passed by the Company Law Board or NationalCompany Law Tribunal or the Reserve Bank of India or any court or any other Tribunal.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under sub-section 1 of section 148 of the Actfor the products / services of the Company.

(vii) (a) According to the information and explanations given

to us and the records of the company examined by us in our opinion the Company isregular in depositing with the appropriate authorities undisputed statutory dues includingprovident fund employees' state insurance income tax sales- tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory duesapplicable to it. According to information and explanations given to us no undisputedamounts payable were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added tax whichhave not been deposited with the appropriate authorities on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks Government and dues to debenture holders.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of debt instruments and term loans have been applied by the Companyduring the year for the purpose for which they were raised other than temporarydeployment pending application of proceeds. Apart from money raised by way of debtinstruments the Company has neither raised any moneys by way of initial public offer /further public offer nor were such proceeds pending to be applied during the currentyear.

(x) According to the information and explanations given to us and best of ourknowledge no material fraud by the Company or on the Company by its officers or employeeshas been noticed or reported during the year.

(xi) Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given to us we report that the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) ofthe Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underparagraph 3 (xiv) of the Order is not applicable to the Company.

(xv) Based upon our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements in our opinion and according to the informationand explanations given to us the Company has not entered into any non-cash transactionswith directors or persons connected with directors. Accordingly reporting under paragraph3(xv) of the Order is not applicable.

(xvi) In The Company is not required to be registered under section 45-IA Reserve Bankof India Act 1934.

For SHAH GUPTA & CO. For CHOKSHI & CHOKSHI LLP
Chartered Accountants Chartered Accountants
FRN 109574W FRN 101872W/W100045
Vipul K. Choksi Vineet Saxena
Partner Partner
M.No.037606 M.No.100770
Place: Mumbai
Dated: April 25 2017

Report on the Internal Financial Controls under clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of LIC HousingFinance Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(" the Guidance Note") issued by the Institute of Chartered Accountants of India("the ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by the ICAI and specifiedunder sub-section 10 of Section 143 of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our 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 internal financial controls system overfinancial 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. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company 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 March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India.

For SHAH GUPTA & CO. For CHOKSHI & CHOKSHI LLP
Chartered Accountants Chartered Accountants
FRN 109574W FRN 101872W/W100045
Vipul K. Choksi Vineet Saxena
Partner Partner
M.No. 037606 M.No.100770
Place: Mumbai
Dated: April 25 2017

TO THE BOARD OF DIRECTORS OF LIC HOUSING FINANCE LIMITED

Report on Compliance with the Housing Finance Companies (NHB) Directions 2010

Pursuant to the Paragraph 2 of the Housing Finance Companies - Auditor's Report(National Housing Bank) Directions 2016 ("the Auditor's Report Directions") wehave examined the matters specified in the Paragraph 3 of these Directions in respect ofLIC Housing Finance Ltd. ("the Company") for the year ended March 312017.

Management's Responsibility

The Management of the Company is responsible for compliance with the extant HousingFinance Companies (NHB) Directions 2010 ("the Directions") on an ongoing basisand reporting non-compliance if any to the regulatory authority Board of the companyand its Audit committee. This responsibility also includes (a) creation and maintenance ofproper accounting and other records (b) the design implementation and maintenance ofadequate internal procedures / systems / processes / controls relevant to the creation andmaintenance of the aforesaid records. Further this responsibility includes ensuring thatthe relevant records provided to us for our examination are correct and complete.

Auditors' Responsibility

Our responsibility is to report on the matters specified in Paragraph 3 of theAuditor's Report Directions based on our audit.

We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI) specified under sub-section 10 ofSection 143 of the Companies Act 2013. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether there are any identified non-compliances.

An audit involves performing procedures to obtain audit evidence about the compliancewith the Directions. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the information and recordswhether due to fraud or error. In making those risk assessments the auditor considersinternal controls relevant to the Company's compliance with the Directions in order todesign audit procedures that are appropriate in the circumstances. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ourconclusion.

We conducted our examination in accordance with the Guidance Note on Reports orCertificates for Special Purposes ("the Guidance Note") issued by the ICAI. TheGuidance Note requires that we comply with the ethical requirements of the Code of Ethicsissued by the ICAI.

We have complied with the relevant applicable requirements of the Standard on QualityControl (SQC) -1 Quality Control for Firms that Perform Audits and Reviews of HistoricalFinancial Information and Other Assurance and Related Services Engagements.

Conclusion

Based on the examination of the books of account and relevant records of the Companyand audit procedures and such checks as considered appropriate by us and taking intoconsideration the information & explanations provided to us by the Company officialswe report that:

1. The Company had applied for registration as required under Section 29A of theNational Housing Bank Act 1987 ("the Act") and has been granted the certificateof registration dated 31st July 2001.

2. The Company has complied with the Net Owned Fund (NOF) requirements as prescribedunder section 29A of the Act.

3. The Company has complied with Section 29C of the Act.

4. Public deposits accepted by the Company together with other borrowings are withinadmissible limits.

5. There are no deposits in excess of the admissible limits.

6. The Company has obtained minimum investment grade credit rating from an approvedcredit rating agency for the purpose of accepting/holding public deposits.

7. The credit rating (i.e. FAAA/Stable) for deposits reaffirmed by the credit ratingagency viz. CRISIL on April 12016 is in force. The rating agency has not specified anylimits for accepting/holding public deposit as per their letter dated April 12016.

8. The Company has not defaulted in paying to its depositors the interest and/orprincipal amounts of deposits after such interest and/or principal became due during theyear.

9. Total borrowings of the Company i.e. deposits inclusive of public deposits togetherwith the amounts referred to in sub-clauses (iii) to (vii) of sub-section (bb) of Section45 I of the Reserve Bank of India Act 1934 and loans or other assistance from theNational Housing Bank are within the limit prescribed in the Directions.

10. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us we report that the Company has complied with the prudential norms on incomerecognition accounting standards asset classification loan-to-value ratio provisioningrequirements disclosure

in balance sheet investment in real estate exposure to capital market and engagementof brokers and concentration of credit/investments as specified in the Directions.

11. The capital adequacy ratio as disclosed in the Schedule II return submitted to theNational Housing Bank in terms of the Directions has been correctly determined and suchratio is in compliance with the minimum capital to risk weighted asset ratio (CRAR)prescribed therein.

12. The Company has furnished to the National Housing Bank within the stipulated periodthe Schedule II return as specified in the Directions.

13. The Company has complied with the liquidity requirements as specified under Section29B of the Act and the requirements as specified in paragraphs 14 and 15 of theDirections and has kept the securities with the designated bank.

14. The Company has furnished to the National Housing Bank within the stipulated periodthe Schedule III return on Statutory Liquid Assets as specified in the Directions.

15. The Company has complied with the requirements contained in the Directions in thecase of opening of new branches /offices or in the case of closure of existingbranches/offices.

16. The Company has complied with the provisions contained in paragraph 38 and 38ADirections.

17. The Company has not violated any of the provisions contained under restriction onacceptance of public deposits period of public deposits Joint public depositparticulars to be specified in application form soliciting public deposits ceiling on therate of interest and brokerage and interest on overdue public deposits renewal of publicdeposits before maturity as provided in Directions.

Restriction of use

This report has been issued pursuant to the requirement as per Paragraph 2 of theAuditor's Report Directions. It should not be used by any other person or for any otherpurpose. Accordingly we do not accept or assume any liability or any duty of care for anyother purpose or to any other party to whom our report is shown or into whose hands it maycome without our prior consent in writing.

For SHAH GUPTA & CO. For CHOKSHI & CHOKSHI LLP
Chartered Accountants Chartered Accountants
FRN 109574W FRN 101872W/W100045
Vipul K. Choksi Vineet Saxena
Partner Partner
M.No.037606 M.No.100770
Place: Mumbai
Dated: April 25 2017